AUDIT PROCEDURE SCHOOL GENERATED FUNDS AND REVIEW AND INTERNAL CONTROLS

Transcription

1 AUDIT PROCEDURE SCHOOL GENERATED FUNDS AND REVIEW AND INTERNAL CONTROLS OBJECTIVE The overall objective of internal review is to assist administrators and support staff charged with financial responsibilities and ensuring proper financial procedures are in place. A secondary objective of internal reviewing is to safeguard the district s employees that are performing or monitoring financial transactions. Areas reviewed during an Internal Review: A. Cash, Receipts, and Bank Deposits B. Disbursements C. Canteen / Vending Machine / School Store D. Bank Reconciliations E. Accounting Records and Reports F. General Appearance of Office Area and records School Name: School Name Review conducted by: Name Date of Review: Date Page 1

2 A. CASH RECEIPTS AND BANK DEPOSITS To ensure that the accountability for funds is established before cash is misdirected or lost To ensure funds are adequately safeguarded and promptly deposited To ensure funds are accurately classified, summarized and recorded To ensure that all funds owing to the school/school district are identified, collected and recorded to the credit of the school Cash Security Guidelines: 1. The principal shall be responsible to see that all the monies collected in or for a school are receipted, recorded, accounted for and taken to the proper location for deposit without delay. Bank deposits must be made as often as required to avoid accumulating cash on schools premises. Per procedure & During school hours: a) Cash shall be kept in a cash register; locked drawer or lockable cash box and access must be restricted to individuals designated by the principal. b) Cash boxes shall be locked and kept out of sight in a secure place when not in visual custody of the person responsible for the money. Per procedure After normal school hours: a) Cash remaining in the school shall be locked in the vault or in as secure a location as possible within the school, b) Cash shall not be taken home by staff members, nor carried on staff members person for safekeeping. Per procedure All money collected shall be counted, recorded and turned over to the school office so that a formal record of all funds received can be prepared. In this way, any differences between the teachers and office s totals can be resolved immediately. Per procedure All monies collected by the school, while in the school or in transit to the bank for deposit, must be safeguarded and precautions taken at all times to avoid the threat of theft and harm to our employees. Per procedure All funds collected outside of the office are remitted to the school office. The staff when turning funds into the school office should have attached a sales summary form for that day. Pre-numbered receipts should be issued for all funds received in the school office. Staff should expect to get a receipt when funds are remitted to the school office. Page 2

3 continued Cash receipts should be reconciled to the bank deposit each time a deposit is made. Difference must be documented and signed off by both the principal and the individual preparing the deposit. Funds must not be taken home for safekeeping. Funds should be secured in the daytime when not attended to or kept overnight. Also, whenever possible, funds should be counted in a secured place and not readily observable by non-staff individuals. Access to the funds should be limited to the person responsible for them. Floats and petty cash funds should be recorded and responsibility for them assigned. Evidence that the principal has reviewed bank balances. A complete listing of all transactions for the school year is generated; transactions based on irregularity, employee and family member transactions, are preselected and verified for accuracy, documentation and Procedure adherence. Audit is not limited to these previously selected transactions, based on findings. B. DISBURSEMENTS To ensure that each disbursement of funds is based on an actual expenditure, accurately prepared and appropriately authorized. To ensure that each disbursement is accurately and promptly classified, summarized and recorded. To ensure that all disbursements are appropriately charged against school generated funds. To ensure disbursements to employees are minimal. All payments should be made by cheque or from a properly established petty cash fund. Cheques should be pre-numbered and require two signatures where one is the principal. All payments made must be properly substantiated with an unaltered supplier s invoice or receipt. The person, who has authority for the account being charged must authorize the payment in writing with an original signature. School generated funds are only to be used for the purpose they were collected. Payments made from the school-generated funds for District purchases are not allowed. A District PO must be issued for mini expenses. Employee expenditure reimbursements must be minimal. A complete listing of all transactions for the school year is generated; transactions based on irregularity, employee and family member transactions, are preselected and verified for accuracy, documentation and Procedure adherence. Audit is not limited to these previously selected transactions, based on findings. Page 3

4 C. CANTEEN / VENDING MACHINE / SCHOOL STORE / COSMO To ensure that all sales are recognized and accountability for funds is established before cash can be misdirected or lost. To ensure that funds are adequately safeguarded until turned into the school office. To ensure that the assets and inventories associated with the operation are appropriately controlled. To ensure that there is effective overall supervision and monitoring of the canteen / vending machine / school sales operations in order for the school administration to assess whether the anticipated profit margins are being achieved. D. BANK RECONCILIATIONS What we review during an internal review: The school should only have one bank account. Bank reconciliation s are prepared on a monthly basis Stale dated cheques are written off when they become stale dated Evidence that the principal has reviewed monthly bank reconciliations E. ACCOUNTING RECORDS AND REPORTS To ensure compliance to Generally Accepted Accounting Principles To ensure revenues and expenses are accurately classified, summarized and recorded To ensure assets and liabilities are accurately classified, summarized and recorded--- a detail of each account entry must be kept on file and according to records retention procedure 171 ASSETS: Bank o Ensure all transactions are recorded and bank reconciliations are completed on a monthly basis. Per procedure 511 o Stale dated cheques should be written off when they become stale dated o Interest and bank charges are recorded Page 4

5 o o Adjustments are authorized by the principal Bank reconciliation s are reviewed by principal continued LIABITIIES o Canteen accounts not to carry balance - all must be cleared by July 31 st. RETAINED EARNINGS o The sum of all accumulated Funds balances must equal the total retained earnings --- At Year End - year end procedure completed at CEC Office in AUGUST o The principal to review the monthly funds balance reports. TRANSFERS: o The amounts of transfers from other funds MUST equal the amount in transfer to other funds a copy of all transfers documents to be kept on file for review o The principal must approve all transfers REVENUES AND EXPENDITURES: o Ensure accuracy in recording and reporting all revenues. o Funds used for the purpose that they were collected for. o Disbursements based on actual expenditures. o Invoices and requisitions cross referenced with cheque number. o Invoice documentation or cheque requisition attached for all payments. o All expenditures are authorized / approved. o A complete listing of all transactions for the school year is generated; transactions based on irregularity, employee and family member transactions, are preselected and verified for accuracy, documentation and Procedure adherence. Audit is not limited to these previously selected transactions, based on findings. F. GENERAL APPEARANCE OF OFFICE AREA AND RECORDS What we review during an internal review: The general appearance of the office General appearance of files and records Areas are neat and tidy Safe is in order and organized School records organized and easy to find Items filed in appropriate and logical manner Page 5