Page 26 - The Edge - Fall 2020

AASBO VIRTUAL FORUM

BY DON HARRIS
Eugene Park Michael Vaughn Linda Virgil
Auditors Will Be Asking a Lot of New Questions

AASBO members can expect an array of additional Other internal control issues Park mentioned:
and unfamiliar questions from auditors relating to the
widespread impact of the COVID 19 pandemic. Was access to different modules provided to employees
to work remotely? Was access still limited to the
In a July 30 webinar, Eugene Park, CPA and partner functions necessary to complete the job? What security
with Heinfeld Meech, provided AASBO members with measures were put in place to protect district information,
a glimpse of what to expect from auditors, and Michael such as firewalls and antivirus, and have there been
Vaughn and Linda Virgil, both of Peoria Unified School changes in how the district maintains original source
District, told of their experiences in dealing with the documentation?
coronavirus.
Auditors will want to know if, starting in March,
Park pointed out that video technology has been around whether you believe there has been an increase in the
for a long time, and now its use has increased to “allow risk of fraud or misappropriations of assets or financial
for social distancing and reduce the need for face-to- reporting. “We want to see if there are any holes in your
face meetings.” Virtually all phases of audits are being anti-fraud structure,” Park said.
conducted via some form of technology, but Park
emphasized that the objective of audits remains the Something else to consider is whether the district
same. anticipates any significant changes to year-end close
out procedures, or any anticipated changes in inventory
He recommended evaluating and documenting changes procedures for capital assets. If you have buses that will
in internal controls, systems access, reviews, remote no longer be used, the value of that asset should be noted.
access, changes to user controls and the use of digital Did your district “re-purpose” employees during the
records. Be prepared for questions about the timeframe pandemic, such as bus drivers for custodial, instructional
from March 1 through June 30. assistant to administrative office, or librarians to public
safety data analysis? “If so, what was the mechanism
“How have the (school district’s) processes and controls used to track and reclassify the expenditures in the
for financial reporting changed during the pandemic?” general ledger?” Park said.
Park said. “It’s a catch-all question and a good way to
start the conversation. The most frequent change we Key controls that auditors want to look at include whether
found is that employees were able to work remotely.” the district issued refunds for any fees, payment of
services or other contributions, and how has the district
Related to that, did the district issue laptops, implement accounted for those refunds. Park said auditors also want
a rotation of days, and did some employees come in to to know how the Governing Board has remained active
process payroll? Responses to some questions likely and engaged in fulfilling its fiduciary responsibilities of
will lead to other questions. “Jog your memory,” he said. financial management oversight.
“Focus on key controls made during this timeframe.”
Regarding federally funded programs, Park said there
“There will be more questions than has been a heavier emphasis on providing meals during
the pandemic. Districts should determine the number of
usual because these are unusual meals serviced through the child nutrition program. “It
times.” -Eugene Park could be significant enough that the program could be a
higher risk program,” Park said.
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26 THE EDGE FALL 2020