Week 4 Assignment, Part 5

On Wednesday, May 2, I interviewed the district Chief Financial Officer. I specifically asked him the following questions. His responses follow each question.

How is the external auditor selected?

A Request For Proposal (RFP) is posted. When the window for RFP’s closes they are reviewed by the CFO and the two directors in the business office. They independently review the same RFP’s and score them with a common rubric. The scoring for each category is done on a likert scale. Once all of the RFP’s have been score by all three business directors the top three are chosen for further review. They are put in a comparison table so that all three RFP’s can be viewed side by side. The CFO and the two directors discuss the pros and cons for each RFP and then they make a recommendation to the Superintendent as to which RFP would meet the needs of the district.

How does the auditor conduct the audit?

Typically, they collect information from the business office in June/July. They usually request a sampling of various reports, purchase orders, and procedural documentation. They ask questions constantly, verify postings and check for accuracy of reporting.

What does the audit conclude about district financial procedures and actions?

Ultimately, the findings of the audit determine if the district has met the standard. If a district does not, the audit would list the deficient areas. The CFO showed me the unqualified report that the auditors present in the final summary of the audit in the report to the board.

How are the results communicated?

The results are communicated in a written report. The audit report is presented to an adopted by the board in December or January and it must be sent in to the state by the end of January.

Reflection:

The external audit is a quality control measure required of school districts. In theory it is a safeguard of tax payer dollars and encourages school districts, superintendents and school boards to be fiscally responsible with the funds that they are charged with managing. In my district we have not experienced financial difficulties or financial exceptions found in the external audit. As a matter of fact the district built a new elementary school (800 student capacity) without raising taxes. The funds were taken out of the fund balance and the building was paid for in cash. The fund balance is currently in good shape having more than the three months of operational funds available. External audits, sound business practices, and tough decisions by our school board have enabled our district to maintain a sound financial status. My CFO showed me on the TEA website where all school district audits are posted. They are not a secret but you do not know what you do not know until you know. It was interesting looking at other school district audits and comparing them to my district.