1. Internal Audit Findings Finance Enhancing Processes Bookkeeper In-Service August 17, 2011 John Wallingford, Director of Financial Services Vivian McGettigan, Chief Internal Auditor

2. Outline 1.Update on Internal Control Advisory Council and/or Finance Guidance 2.Update on Audit Findings 3.How to Avoid Audit Findings 4.Activity Fund Audits 2

3. Focus Group Meetings Continue and Learning from Initial Audits Bookkeepers’ Feedback (Standardize Forms and Provide Guidance) Regulations/Policies Inconsistent with Practices: –Nightly Deposits ($25) evening events –Audits of Booster Clubs –Level Associate’s Approval of Meals –Full Accounting for Travel 3

4. ICAC or Finance Projects Nightly Deposits (Evening Events) Meals (Level Associate Approvals) Full Accounting (Standard Form and Guidance) PTA/Booster Club Guidance (Checklist for Bookkeeper Review) Expendable Property Management (logs & labels) Coaching Supplements Reconciliation Spreadsheet 4

5. Enhancing our Anti-Fraud Program “Unannounced” Audits Focus on Deterring Fraud 5

6. Summary Results of Current Audits Enhance Physical Security Over Cash: –Secure keys to Safe –Regular Nightly Deposits –Teachers Holding Cash in the Classroom overnight Enhance Password Protection: –Store Passwords Away from the Computer 6

7. Audit Results - Continued Enhance Management of Procurement Cards –Lack of Log –Frequent Late Submissions of Reconciliation –Meals Lacked Level Associate prior approvals –Lack of Supporting Documentation for Meals –Meals for Non-employees (spouses) –Lack of Full Accounting for Travel –Failure to Utilize Sales Tax Exemption –Use of School Activity Fund Cards for Site Based Charges –Tips in Excess of 15% 7

8. More Audit Results Enhance Management Over School Payroll –Lack of Professional Leave Requests –Use of Instructional Supplements to Pay Additional Coaching Supplements –Set-up of Temp Teachers Prior to HR’s approval –Authorization of Staff Roster resulting in paying a terminated employee –Lack of Principal’s approval for overtime. 8

9. Even More Audit Findings Enhance Security Over School Division Equipment: –Use of Release Forms – Equipment Removed from School –Update Inventory for Transferred Assets –Expendable Property Listing not Maintained –Lack of Management of Computer Equipment 9

10. Lack of Oversight Over Public Funds Responsibilities: –Legal –Ethical –Fiduciary (Spectrum of Opinions for Appropriate versus Non-appropriate) Reminder - All Purchases are Public Record 10

11. Lack of Oversight Over Public Funds Failure to Cancel Hotel Reservations Resulting in Charge to Procurement Card Numerous Expensive Restaurant Charges Contributing to Overspending the Budget Expensive Retreat Contributing to Overspending the Budget Gifts Purchased for Staff Using Public Funds Personal Items Purchased with Public Funds Internal Control Environment is Established Within Each School 11

12. Frequency of Findings 12

13. Frequency of Recommendations 13

14. Findings per School 14

15. Questions Vivian McGettigan, MBA, CPA, CIA, CPFO Chief Internal Auditor Prince William County Public Schools P.O. Box 389 Manassas, Va. 20108 703-791-8991 15 John M. Wallingford, MBA, CPFO Director of Financial Services Prince William County Public Schools P.O. Box 389 Manassas, Va. 20108 703-791-8753