1. PREPARING FOR AN AUDIT Presented by Chris Ray Partner - KPMG LLP Presented by Chris Ray Partner - KPMG LLP

2. 2 The Role of the Independent Auditor  Provide PBC List (see Chapter 9 for examples)  Financial statement audit  A-133 audit (higher and limited scope)  Communicate progress and any difficulties or issues encountered during the audit, including proposed management letter comments and single audit findings, to the KPMG Systemwide team (bi-weekly progress reports)  Meet deadlines set by campus and audit team

3. 3 Understanding the Role of the Campus  To have all requested schedules, including reporting package, PRIOR to beginning of fieldwork  Provide suitable workspace, including phone and internet connections  Designate campus contacts for F/S and A-133 audits  Meet deadlines set by campus and audit team

4. 4 Key Deadlines  Auxiliary organizations’ audited financial statements due to Chancellor’s Office (CO) – September 30, 2004  Campus reporting package (financial statement and A-133 audits, including FISAP) due to CO – October 25, 2004

5. 5 Planning Meeting  Team introductions  Current year activity and issues  Scope of audit  PBC list clarification  Confirmations  Key deadlines  Auxiliary organizations  Reporting package  Management’s discussion and analysis  Stand-alone financial statements  Confirm fieldwork timing

6. 6 Sample Schedules

7. 7 2004 A-133 Higher Scope Campuses  Long Beach  Northridge  Pomona  Sacramento  San Diego  San Francisco  Stanislaus

8. 8 KPMG Information Risk Management (IRM) Audit Team  Initial campus information technology (IT) questionnaire – drives planning and scoping efforts  Scope of work includes:  Updating our understanding of the IT environment  Financial aid system controls (at selected campuses)  Peoplesoft IT application controls for the Human Resources, Finance, and Student Administration modules  Key IT controls (i.e. 3-way match, chart of accounts, etc.)  Key user access and segregation of duties controls  Data conversion from legacy to Peoplesoft, if applicable

9. 9 IRM Testwork– Key Dates  June 11, 2004 – Campus to submit initial PBC requests to CO  July 2, 2004 – Campus to submit additional PBC requests, as applicable, to CO  Week of July 25, 2004 – Conference calls with campuses  August 2004 – On-site testwork at the following campuses:  Long Beach  Northridge  Pomona  San Diego

10. 10 Questions?