Assignment 5
1. List the different type of audits that public school districts undertake and describe each.
(a) External Audits in general reviews the resources and operations of the school district. This type of audit is to ensure that there is compliance with the policies and provides a credible evaluation of the resources and operations. It is conducted by external certified auditors. There are 3 subcategories of audits that falls under external audits. The first being a financial compliance audit. A Comprehensive annual financial Report must be prepared by the school district using the Generally Accepted Accounting Principles (GAAP) to review the finance. In this report the auditors will ensure that the data contained in the report was …show more content…
Kickback to a vendor means that there is an inflation of payment that is made to the vendor in which there is some sort of bribe or negotiation made by the purchaser and the vendor. Goods and services can be subjected to the type of fraud by both involved parties. This type of fraud is sometimes hard to recognize as payment is made to a valid vendor and if the market value is not standard or known for certain types of services it can go undetected. An effective claims audit can monitor prices can prevent these types of frauds by ensuring that the district bills are warranted. In the case of the kickback fraud the claim auditor can prevent this by reviewing the purchases before the treasure makes the payment. This policy will allow to detect if there is an unusual inflation or even compare goods and services from multiple vendors before approving a purchase. The lack of a proper claim audit allows for loopholes for this type of common …show more content…
The lack of proper financial policy was one of the main reasons why superintendents and other personnel were able to conduct such an extensive scandal of finances. One such policy included the processing payment outside the normal cash flow where procedures were not put into place for proper accountability. These hand drawn warrants created a loophole to remove fund from the system in large amounts. Other inefficient policies include the approval of budget transfer that had no limit. The district failure to establish proper policies allowed for mismanagement of monies in regards to payroll, travel, petty cash and others. Without proper policies the money was left vulnerable. When there were financial polices many officials neglected their duties to monitor the cash flow and again created loopholes for misappropriations. This type of negligence was noted when the fraud was detected and the officials chose not to report it. As much as budget status reports were provided the board did not make any attempts to acquire these records hence allowing the scandal to continue for such a long time. Improper supervision and lack of accountability allowed for the embezzlement of
1. List the different type of audits that public school districts undertake and describe each.
(a) External Audits in general reviews the resources and operations of the school district. This type of audit is to ensure that there is compliance with the policies and provides a credible evaluation of the resources and operations. It is conducted by external certified auditors. There are 3 subcategories of audits that falls under external audits. The first being a financial compliance audit. A Comprehensive annual financial Report must be prepared by the school district using the Generally Accepted Accounting Principles (GAAP) to review the finance. In this report the auditors will ensure that the data contained in the report was …show more content…
Kickback to a vendor means that there is an inflation of payment that is made to the vendor in which there is some sort of bribe or negotiation made by the purchaser and the vendor. Goods and services can be subjected to the type of fraud by both involved parties. This type of fraud is sometimes hard to recognize as payment is made to a valid vendor and if the market value is not standard or known for certain types of services it can go undetected. An effective claims audit can monitor prices can prevent these types of frauds by ensuring that the district bills are warranted. In the case of the kickback fraud the claim auditor can prevent this by reviewing the purchases before the treasure makes the payment. This policy will allow to detect if there is an unusual inflation or even compare goods and services from multiple vendors before approving a purchase. The lack of a proper claim audit allows for loopholes for this type of common …show more content…
The lack of proper financial policy was one of the main reasons why superintendents and other personnel were able to conduct such an extensive scandal of finances. One such policy included the processing payment outside the normal cash flow where procedures were not put into place for proper accountability. These hand drawn warrants created a loophole to remove fund from the system in large amounts. Other inefficient policies include the approval of budget transfer that had no limit. The district failure to establish proper policies allowed for mismanagement of monies in regards to payroll, travel, petty cash and others. Without proper policies the money was left vulnerable. When there were financial polices many officials neglected their duties to monitor the cash flow and again created loopholes for misappropriations. This type of negligence was noted when the fraud was detected and the officials chose not to report it. As much as budget status reports were provided the board did not make any attempts to acquire these records hence allowing the scandal to continue for such a long time. Improper supervision and lack of accountability allowed for the embezzlement of