The Audit Experience Preparing for, engaging in and living to tell the tale Teena Atalig, Fiscal Specialist Chancellor’s Office September 21, 2017

Agenda Role of the Fiscal Accountability Unit Why do we need an audit? Elements of An Audit Finding Preparing for the audit CDAM Test 475

Role of Fiscal Accountability Publish the Contracted District Audit Manual Resolve audit findings Respond to whistleblower complaints submitted to the Chancellor’s Office Audits of various programs of the Chancellor’s Office

Role of Fiscal Accountability, cont. Review and monitor the fiscal condition of college districts. Acts as a liaison to external and other agencies regarding audits of community colleges. Participate in the Fiscal Standards Accountability Committee to establish guidelines for fiscal reporting.

Why do we need an audit? Education Code 84040 – requires annual audits of each community college district Title 5 -59108 requires the Chancellor’s Office to review the audit reports to assess district compliance Title 5-59110 allows a district to respond an refute audit findings before action is taken by the Chancellor’s Office to recover funds Title 5-59114 gives the Chancellor the authority to make the necessary apportionment adjustments

Elements of an Audit Finding Criteria Condition Questioned Cost Auditor’s Recommendation District Response (Corrective Action)

Bribable (there is not enough money in the coffee fund anyway) To Quote Paul Newman in Butch Cassidy and the Sundance Kid: “Who ARE those guys?” What Auditors are not: Bribable (there is not enough money in the coffee fund anyway) Susceptible to BS (unless it is their first rodeo) Hateful Trolls spawned specifically to reign complete and utter destruction on you and your program

Who ARE those guys?” Cont. What Auditors are: Professionals – Contracted by your district Experienced and ethically bound to respect student confidentiality Have various levels of Title 5 knowledge Human

What is our Goal? Not necessarily to win the war, rather, to avoid losing the battle Make the audit experience, if not enjoyable, at least tolerable for everyone Strive to influence that portion of the results that are susceptible to opinion Structure our strategy, our behavior and our energy on receiving the “Benefit of the Doubt”

We CAN influence how the “in doubt” is reported What does it take? Attitude Preparation Respect Resolve

Audit Etiquette Attitude Present a positive attitude towards the audit Indicate your desire for continuous improvement Respect Show confidence in the contractor’s ability to understand your program Treat the auditors as the professionals they are, and their right to be there Agree to disagree if at an impasse – they may be wrong, but disrespect will not change their minds Courtesy Get them Parking Passes Make them comfortable Good space/chairs/lighting Make it easy for them to find things Files/coffee Sincere communication

Audit Preparation Know the Audit Contractor Check with the Business office Discuss your needs Entrance/Exit Interviews Sample audit reports Timing of audit Communicate with the contractor Ask for entrance and exit interviews Ask to present program overview at entrance interview Determine dates and times for audit and schedule interviews Review their work Familiarize yourself with Contracted District Audit Manual Obtain previous audits by this contractor Look at the type of tests they used and numbers of files they reviewed See how they word the tests Get clues from their summations Conduct a self-test Use the Title 5 Self-Assessment Checklist as you think the contractor might

Compliance Issues Eligibility - Title 5 vs. 504 and the ADAA Your Self-Check and Ongoing Quality Control Should Target:  (Refer to Checklist)    Eligibility - Title 5 vs. 504 and the ADAA Understand the difference Documentation - Required Information and Assurance that you had an interactive meeting with the student Academic Accommodation Plan and Services

The Entrance Interview Expectations and Ground rules Establish times the auditors will be in your office Establish record review protocols (what to do with completed record, where to get student records in the morning, where to store student records at night) Program overviews, information, tours Offer a tour of your office Prepare a brief overview Review student record contents and location of documents Show where other records such as sign-in sheets or equipment checkout documents are kept Contact/logistics person always available

During the Audit Access Access is absolute and available at the established times Clarification If disputes arise regarding audit findings they should be discussed as early on as possible in the audit process, not in the exit interview. If the immediate contact person is not able to provide clarification know who can and how soon Selling your Policies & Procedures Have rationale for your processes ready If there is a reasonable explanation, provide it Do not try to BS a policy or a mistake

The Exit Interview Receiving Results: Try to make clarifications prior to the exit interview Unless there are obvious errors accept the results Giving a rationale vs. being defensive

475 - DISABLED STUDENT PROGRAMS AND SERVICES (DSPS) Background Disabled community college students are those with exceptional needs enrolled at a community college that, because of a verified disability, cannot benefit from general education classes, activities, and services without specific additional DSPS program support services. The purposes of these special programs and services are to integrate the disabled student into the general college program; provide educational intervention leading to vocational preparation, transfer, or general education; and increase independence or referral of the students to community resources most appropriate to their needs. These programs apply only when they facilitate the student's measurable progress towards his or her educational goals. Do not count potential students for DSPS funding that have not applied to or enrolled at the college.

475 - DISABLED STUDENT PROGRAMS AND SERVICES (DSPS) p.2 Background Disabled Student Programs and Services is a categorical aid program authorized under AB 77 (Chapter 275, Statutes of 1976) as amended by AB 2670 (Chapter 1407, Statutes of 1978), further modified by AB 8 (Chapter 282, Statutes of 1979), and SB 1053 (Chapter 796, Statutes of 1981) and amended by AB 746 (Chapter 829, Statutes of 1987). State allocations for the program are awarded on an excess-costs basis to meet the educational needs of students with verifiable disabilities. Community college districts shall submit student-count data annually to document eligible DSPS students served.

475 - DISABLED STUDENT PROGRAMS AND SERVICES (DSPS) p.3 Criteria 42 U.S.C. section 12101 Education Code Sections 14020.1, 66010.4, 66701,67300-67313, 70901, 71020.5, 84320-84328, and 84850 CCR, title 5, sections 56000-56076 (updates operative 10/17/2015), 59114, and 59116 Management Information Systems Data Mart – DSPS reports http://DSPS (includes allocations link)

475 - DISABLED STUDENT PROGRAMS AND SERVICES (DSPS) p.4 Compliance Requirement All criteria above can be tested by auditors. Auditors must be allowed to review student files for DSPS eligibility. (Code of Federal Regulations, Title 45, Section 164.502(b) “minimum necessary standard which is the minimum necessary disclosure to accomplish an intended purpose”)

475 - DISABLED STUDENT PROGRAMS AND SERVICES (DSPS) p.5 Suggested Audit Procedures 1. Test student files for eligibility, including enrollment. 2. Test expenditures for appropriate use of DSPS funds. CCR, Title 5, Sections: 56064 – Allowable Expenses 56066 – Comparable Services 56068 – Non – Allowable Expenses

475 - DISABLED STUDENT PROGRAMS AND SERVICES (DSPS) p.6 Some of the transactions testing within this state compliance test may affect the calculation of funding from the State, and must be performed using a statistically significant sample. Extrapolation of sample results to the full population of transactions is required. A stratified sample is required wherever it will assist the accuracy of the extrapolation. The Chancellor’s Office will calculate a dollar amount relating to each finding that may affect state funding. Extrapolation is required regardless of funding levels. Any findings from this test that may affect state funding, and do not report extrapolated information, will be rejected by the Chancellor’s Office and the audit report will be considered incomplete until amended.

475 - DISABLED STUDENT PROGRAMS AND SERVICES (DSPS) p.7 FTES and students served information is required to be reported as Credit, Noncredit, or Noncredit CDCP, and specifically for each Center and Campus. Include in your finding the source of your sample. For instance, did you test data found on the P1, P2, Annual, R1, or R2 report? If the identified discrepancy was corrected, was it corrected on the P1, P2, Annual, R1, or R2 report? Corrections sent to the Chancellor's Office on any report must be specifically identified as resulting from a specific audit finding to be considered resolved. If extrapolation of findings is not provided, the alternative is a 100% review of the transactions tested that resulted in the finding. This must be overseen by the CPA firm.

Audit Adjustments CCR, Title 5, Section 56072. Allocations; Reports; Audits; Adjustments – (c) Each district shall submit such enrollment and budget reports as the Chancellor may require. (d) The Chancellor’s Office shall provide for audits of DSPS programs to determine the accuracy of the reports required pursuant to subdivision (c ). (e) The Chancellor may, based on audit findings or enrollment/budget reports, adjust the allocation of any district to compensate for over or under-allocated amounts in the current fiscal year or any of the three preceding fiscal years.

Resources Chancellor’s Office Staff, DSPS Allocations and Reports: Linda Vann: lvann@cccco.edu Chancellor’s Office Fiscal Accountability: Tracy Britten: tbritten@cccco.edu DSPS Web Page: http://extranet.cccco.edu Chancellor’s Office Divisions DSPS Webinar archives and PowerPoint for CCCCO trainings: http://extranet.cccco.edu/Divisions/StudentServices/DSPS/TrainingConferences.aspx http://extranet.cccco.edu/