Questions On Risk Assessment Requirements Essay
1. The transfer of funds may need attention from the auditor when assessing risks. The fact that major budget classifications of less than $10,000 can be made with the approval of the superintendent only is risky in nature because the superintendent could just have the opportunity to make and approve multiple fake budget items all under $10,000 since there is no oversight over him in this process. This provides a potential fraud risk. The auditor should also make sure that there is proper authorization for the transfers of funds.
In addition, the auditor should understand the process of management’s reporting of internal audit information and communication between the management and the City Council. The school administration was not required to share internal audit information with the City Council or City staff. This is one of the reasons that leads to VBSD financial crisis in 2003 because the management could just override, collude and hide financial problems from the City. Which is why by 2007, the internal audit committee is required to share internal audit information directly to the City’s internal audit and the audit committee, as well as the school board, and not so much with the superintendent.
VBSD received the school budget funding from the City, revenue from the state, and federal impact funds based on the number of military dependents in the school system. However, there is no proper oversight or monitoring of whether VBSD…