5.4 Audits
Audit Process
As well as being subject to statutory audit by the staff of the Comptroller and Auditor General, Community and Comprehensive Schools are audited by the Internal Audit Unit of the DES.
Nature
Internal Auditing is defined as “an independent, objective assurance and consulting activity designed to add value and improve an organisation’s operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes”.
Scope and Responsibilities
In regard to its overall responsibilities, the Internal Audit Unit must ensure that the systems, procedures and controls operated are adequate, are being complied with and are capable of realising policy objectives in an economic, efficient and effective manner. The Unit is specifically responsible for:
Establishing that accounting records are maintained in an appropriate manner consistent with the production of accounts as required.
Reviewing the arrangements in place for economic and efficient use of resources, for avoiding waste.
Reviewing the arrangements in place for the effective achievement of established objectives (VFM – Value for Money).
Reviewing the reliability of the financial data that supports management decision-making.
Reviewing the arrangements and procedures in place for the safeguarding of assets.
Reviewing the control arrangements for the administration of EU Structural Funds in the DES and in the wider educational sector.
Contributing to the development of a Risk Management Programme for the DES and the other relevant organizations subject to audit by the Unit.
The Head of Internal Audit must ensure that all auditing procedures conform to the Standards for the Professional Practice of Internal Auditing and in discharging its responsibilities, the Unit reports to the Secretary General of the DES.
Audit Approach and Methodology
Principals and Boards of Management must have assurance that effective control systems are in place. Equally, the DES must have assurance that funds allocated to the schools are effectively monitored, controlled, utilised and accounted for. In that context, the Internal Audit Unit of the DES is anxious to promote effective corporate governance in the schools. Its primary objective is the promotion of good practice and VFM, in relation to all aspects of the internal control systems. For this reason focus is placed on the key managerial, operational and financial requirements.
ACCS presents an annual in-service programme for new Principals and Clerical Officers on the Administrative and Financial Guidelines.
The Internal Audit Unit performs its work in Community and Comprehensive Schools by using small audit teams. In undertaking assignments, it employs a combination of interviewing, fact-finding and recording techniques, combined with the systems based auditing methodology. The Audit process may include examination and evaluation of any or all matters that relate to the management and utilisation of resources allocated to a school.
The books and accounts of the Board of Management are open for inspection by officers of the DES, by officers of the Office of the Comptroller and Auditor General and by auditors appointed by, or on behalf of the European Commission (for certain EU funded programmes). All books, tenders, orders, receipts, invoices and other vouchers, requisitions, store records, bank statements, etc. should be retained by the Board for a period of seven years, or for a longer period in respect of EU funded programmes.
PAYE and PRSI records should be retained indefinitely.
Regular visits are made by officers of the DES to the school for the purposes of carrying out an audit. An audit of each school may be conducted once every two years. Random spot audits may also be carried out.
The audit, which is generally advised in advance, takes place over a number of days in the school. The audit process involves detailed examination of school accounts and records by the DES officials, assisted by school personnel having responsibility for all aspects of the management of school finances, including receipt of funds, authorisation of payments and custody of assets. Such personnel normally include the Principal, School Secretary/Clerical Officer, the Director of Adult Education and post-holders in the school.
During the actual audit process itself, recommendations are discussed and agreed with the Principal and other relevant staff.
A full presentation of the findings and recommendations is made to the Principal at the end of the audit and the necessary action recorded and agreed.
A draft audit report issues to the Principal following completion of the field work. The Principal should respond in writing within two weeks to:
confirm that the report is an accurate reflection of findings, conclusions and recommendations discussed,
or
to seek clarification/record disagreement on specific points.
The final report issues subsequently to the Board of Management. The Board is expected to respond to the DES within eight weeks of receipt of the report, outlining a time-scale for remedial action if such is required. If no meeting of the Board takes place within that time frame, then the response should reach the DES within a four-week period following the next ordinary meeting of the Board.
The DES, following consideration of the contents of the audit report, and the undertakings given by the Board, if any, takes appropriate action to ensure that weaknesses identified during the course of the audit are addressed.
Range of Accounts for Audit
Records and supporting documentation relating to all activities carried on by the school, including the following, may be examined.
The Adult Education programme and associated income and expenditure.
Income - its collection, receipting, counting, banking, etc.
Assets Register, disposal of obsolete Assets, stock control procedures.
School income from voluntary fund-raising.
School income from the operation of a school shop/s.
Enrolment - veracity of school records of enrolment.
Register of Assets
The Board of Management is obliged to establish and maintain an adequate system of control over all assets and tangible moveable property owned by the school and also an adequate system of control to ensure that class materials and other consumables are adequately protected against loss or misuse. (See Section 13 of the Administrative and Financial Guidelines).
Disposal of Obsolete Assets
The Board of Management should formulate a policy on the disposal of redundant, obsolete or worn out equipment. Receipts from such disposal should be identified and lodged to the School Fund. The Board should keep a full record of all items disposed of, regardless of value or income received.