School's Out for Summer

By: Brian R. DuMond, CPA (May, 2012)

Remember the old classic rock song “School’s Out for Summer, School’s Out Forever”?  Well, unlike the song, school is not out forever for the Board of Education.   As a board member, the summer months offer an opportunity to prepare for the next school year.  So, what could a board member focus on when not enjoying the few sunny warm days our region has to offer? Well, if you ask that question of an auditor, the answer you may get is:  the Auditors!!  But why?  We offer the following thoughts and comments regarding working with your External Auditor.

Between the end of May and the end of September, most Boards will meet with their external auditor once or twice.  This is a critical time to gain an understanding of the auditor’s assessment of risk, tests they anticipate performing and their overall audit approach.  Board members should be prepared to discuss with the external auditor their audit process,   audit risks from the auditors’ perspective, and the planned audit approach. 

Questions could be asked such as:

  • Are there any new pronouncements that could affect the audit?
  • Who the audit team is going to be this year?  Is it the same as last year?   What affect will that have on the audit?
  • Is the external auditor reviewing the internal auditor’s reports? What impact will this have on the overall audit approach?    

It is also the time to express to the auditors any concerns or additional information you as a board member may have.  We offer the following for your consideration:

  • It is important for the auditor to know if any fraud occurred during the year and if a board member suspects or has heard rumors of fraud.
  • Communicating the results of audits performed by other auditors, whether positive or negative, will also assist the external auditor in tailoring their audit approach to best meet the needs of the district. Other auditors would typically include the internal auditor as well as any Federal and State auditors.
  • Discussions the board of education/audit committee has had with the internal auditor should also be shared with the External Auditor.  The Internal Auditor and External Auditor have different roles, but there is some overlap.  Any communications from the internal auditor would enhance the external audit process.
  • It is also important to discuss with the external auditor any changes in management and the board of education/audit committee’s concerns in regard to the change, if any.
  • If the board has any concerns regarding management that may affect the audit, it is important to communicate that to the auditor as well. 

In summary, when the Board and auditors work together, the result is an audit approach that has been designed to address the Board’s concerns and tailored to best meet the needs of the district.  So remember to enjoy the sunny days but on the rainy ones, keep in mind that school may be out for summer, but not forever.  Seize those opportunities to meet with your external auditor to get the most from your District’s audit.

As always, if you have any questions regarding this article, please do not hesitate to call Brian DuMond, Johanna Dorrance, Thomas Palmer, Shannon Nelson, or any member of the Dermody, Burke & Brown’s school district team.