Week 4, Part 5

For this assignment, I interviewed my district’s Executive Director of Business Services and Director of Financial Services. Texas Education Code, as well as district policy, requires that an audit of the district’s financial statements be completed by independent certified public accountants each year.  My district selects the external auditor through the Request for Proposal process.  The awarded contract is for one year and is renewable for four additional years.  My district has used the same auditor for many years; however, a new audit team is requested every several years in order to get a different perspective.  According to the Executive Director of Business Services, it takes the audit team about two years to gain a thorough understanding of the district’s financial processes.  The cost of the annual audit is approximately $65,000. The external auditor conducts the audit in two stages.  First, the audit team does some interim work in the district for about 1 week, reviewing various files.  Then, the team returns to the district and spends about 2 weeks onsite reviewing financial statements prepared by the district.  The external auditors spend most of their time focusing on payroll, debt expenditures, capital projects and tax collection statements and files.  During their time in the district, the auditors spend a small amount of time on campuses reviewing campus activity funds. The external auditors’ main function is to verify that information in the Comprehensive Annual Financial Report (CAFR) is presented fairly and accurately by the district and in accordance with accepted government accounting standards.  The auditors issue an opinion letter that reports their findings to the Board of Trustees. The auditors’ findings are reported to the Board of Trustees for their approval during the November Board of Trustees meeting.   All information reported out in Board meetings is posted on the district Web site for public review. Data from the audit is reported to TEA through the TEASE (TEA Secure Environment) system in November and is also submitted to PEIMS in January.