Financial Audit Interview

ow is the external auditor selected?

Initially a request for qualifications can be made to determine which firm is most qualified to do the job.  Then a cost is agreed upon.  Districts are not allowed to use the bid process to select an audit, which would place the emphasis on cost. 

Each year our board approves the audit work with our existing auditor through the approval of an audit engagement letter from the auditor which states the scope of work and approximate cost for that year.  

H does the auditor conduct the audit?

The auditor gets an electronic file of our books/balances to use for the audit.  Any changes or adjustments she makes to our books based on their work are delivered to us as journal entries to apply to our finance system.

The auditor spends time at the district reviewing/testing payroll and accounts payable transactions.  They also interview staff and review policies, board minutes, grant funds, activity accounts and contracts.  There are also several supplementary schedules the auditor produces to go in the audit book.

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

The agenda item explains this pretty succinctly.

How are the results communicated?

The auditor prepares an annual audit book which is presented to the board at the meeting when the auditor makes their annual presentation to the board.  The board accepts the audit ( generally speaking). 

TEA receives a copy of the audit, as well as any number of our creditors past or present that request a copy. 

It is important to know that the district’s financial health and practices will be looked at closely. This will keep superintendents on their toes and practicing in a responsible and honest manner that will be beyond reproach.