1. Certified Public Accountants and Consultants
Audit Preparation
MIKUNDA, COTTRELL & CO.
Certified Public Accountants and Consultants
3601 “C” Street, Suite 600
Anchorage, Alaska 99503
(907)

2. Items for Discussion Key procedures for keeping the books
Audit prep packages
Effects of the risk assessment auditing standards
Reports and documentation commonly requested by auditors
Key sources of information
New standards that will affect financial statement audits

3. Critical Year-End Procedures
Reconcile – it’s a matching thing
Balance sheet and footnote items
Does the beginning balance agree with the prior year financials?
Detail or ledger reports vs. general ledger
Grants
Expenditures in the GL vs. grant reports
Revenues and expenditures
Differences due to matching requirements, revenues based on student counts, overspent grant, etc.
Other revenues
Agree beginning fund balance to prior year financials
Add up the due to and due from accounts – net to zero
Add up transfers in and transfers out – net to zero
Watch the 70% rule – obtain a waiver if you don’t meet this

4. Audit Prep Packages Prepare binders to speed up the audit
Work on the prep package after year-end procedures
Prep package won’t take very long
Remember the risk assessments - not everything will be listed on the prep package

5. Audit Prep Packages, continued
Items to send your auditor before the audit:
Confirmations – send them ASAP
Trial balance – can be preliminary
Items your auditor really wants before the audit:
Federal and State Schedules
Ranges of numbers for random selection
Updated internal control documentation

6. Effects of the Risk Assessment Standards
From substantive approach to risk-based
Substantive testwork must be done after risk assessments
Planning required to assess risks

7. Single Audit Federal and State Schedules
$500,000 of Federal expenditures = Federal Single Audit
$500,000 of State Expenditures = State Single Audit
Current year expenditures for individual or clustered programs determine major programs
Guidance in A-133 and State Single Audit Guide for major program determinations
Watch out for American Recovery and Reinvestment Act awards – high risk

8. Reports and Documentation Commonly Requested
Balance sheet detail reports – what makes up the ending balance?
Bank reconciliations
Inventory
Accounts receivable
Fixed assets
Accounts payable
Accrued payroll
Accrued leave
Deferred revenue
Fund balance restrictions and reserves
Don’t forget the 10% rule

9. Reports and Documentation Commonly Requested, continued
Grant Items:
Grant analysis worksheets – must agree to Federal and State schedules
Grant awards
Grant expenditure reports
Other Items:
Bank statements for the whole year
Check register starting the day after year-end through the first day of the audit

10. The PERS Situation SB 125 effect on financial statements
Write-off of NPO
On-behalf for PERS and TRS and the GASB 24
Alaska school districts directed to record the full on-behalf in the operating fund
Allocate on-behalf expenditures to functions based on covered payroll – follow DEED guidance
Provide documentation to DEED

11. GASB 34 and Footnote Items
Schedules for the following must have beginning balance, additions, deletions, and ending balance by function:
Capital assets
Capital project funds - identify costs not capitalized and note the function they belong to
Depreciation by function
Capital leases
Debt
Accrued leave
Show hours and rates for beginning and ending balances

12. GASB 34 and Footnote Items, continued
Interfund activity
Self insurance
Contingencies
Subsequent Events
Review prior year financials for any other items
Provide information for any new disclosures

13. New Standards Effective this year: Coming soon: GASB 49 SAS 115

14. Resources
Websites:
Governmental Accounting Standards Board
Government Finance Officers Association
CFDA.gov
Office of Management and Budget
American Institute of Certified Public Accountants
Alaska Association of School Business Officials
State of Alaska Department of Education and
Early Development