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Audit Buzz Newsletter
August 2020
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In this issue of Audit Buzz, we summarize the status of current engagements, highlight OAG's recent initiative to register FCPS with the National Registry of CPE Sponsors, revisit internal controls in Part 2 of the Knowledge Hive series on the subject, and lastly we offer you some information to keep you in the know, including a furry surprise in honor of a very special day.
As always, we appreciate the cooperation and courtesies extended to our staff by FCPS management and staff during all past, current, and future audit engagements.
Engagement and Office Updates
Current Engagement Update
- As previously mentioned, due to the COVID-19 pandemic we experienced delays in completing two FY 2020 performance audits, Construction Contract Management and Procurement and Contract Management. These two audits are in-progress and expected to be presented to the Audit Committee in the coming months. Be on the lookout for more information.
- OAG is currently performing the Local School Activity Funds (LSAF) audit for the year ended June 30, 2020. The purpose of this audit is to verify local school financials and year-end cash reporting are not materially misstated and to review selected revenue and expenditure transactions for compliance testing. To address the challenges presented by COVID-19, the LSAF audit will be completed 100% remote this year.
- OAG has also been serving as the project liaison for a comprehensive program review of FCPS’ special education. We are still in the process of evaluating proposals to identify the best qualified vendor for the review, which is slated to kick-off in Fall 2020. Be on the lookout for more updates in the future.
Continued Professional Education (CPE) Accreditation
OAG recently led an initiative to successfully register FCPS on the National Registry of CPE Sponsors! This means that going forward, FCPS can provide accredited continued professional education (CPE) to our employees. For those who are not familiar with the CPE requirements, similar to licensed teachers, many certifications held by both OAG and FCPS staff require continued education each year in order to maintain the certification status.
OAG is in the process of scheduling our first ever accredited CPE hours class, Fighting Fraud - Understanding the Mindset of Fraudsters. Enrollment will be open to FCPS employees via MyPDE.
Knowledge Hive
Last month in the Knowledge Hive, we introduced part 1 of a series on internal controls – Internal Controls: What are They? Need a recap - click here to view the July 2020 issue of Audit Buzz. Now that you’ve learned a little more about what internal controls are, we’ll take a look at why they are so important.
Internal Controls – Part 2: Why do we need them?
Internal controls are the actions taken by an organization to reduce the risk that desired outcomes are not met. Internal controls are the responsibility of an organization’s management. As independent auditors, OAG’s role is limited to assessing the system of internal control as it relates to audit objectives, and providing recommendations to address deficiencies. OAG has no role in the design, implementation, or execution of internal control.
FCPS faces a variety of risks daily basis. These risks can arise from sources both internal and external to the organization. As it relates to internal controls, risk is defined as the possibility that an event will occur and adversely affect the achievement of objectives. From this broad lens, the risks an organization face could be limitless, but as we’ll see, not all risks must be treated the same. One risk could be very likely to occur, but have only a minor impact. A different risk could be very unlikely to occur, but have an extremely significant impact. As mentioned, internal controls are actions taken to manage risk and increase the likelihood that objectives and goals are achieved. While risk cannot be completely eliminated, internal controls can be implemented to reduce the likelihood and/or severity of future events to a tolerable level.
Let’s look at a few statistics from the FCPS website to see how internal controls can help reduce risks associated with each:
- FCPS is the 10th largest school division in the U.S. with 198 schools and centers.
- The FCPS bus fleet is one of the largest bus fleets in the U.S., transporting more than 141,000 students on over 1,600 buses each day.
- FCPS, the third-largest employer in Virginia, has 24,165 full-time employees, of whom more than 93 percent are school-based and 6.6 percent nonschool-based.
FCPS has a significant quantity of both buildings and vehicles to manage. As a result, FCPS has a Department of Facilities and Transportation Services (FTS), whose mission is to provide facilities that are clean, safe, energy efficient, sustainable, comfortable, and conducive to efficient and effective educational and support activities; to provide safe and efficient student transportation; and to protect students, employees, grounds, and property. Offices within FTS perform activities such as inspections and scheduled maintenance to provide upkeep on buildings, grounds, vehicles, and other assets. FTS offices also provide 24-hour emergency communications, security patrols, response to calls for services, school inspections, and central monitoring of the Security and Fire Alarm System (SAFAS) for all FCPS facilities. These internal activities can help to reduce both the likelihood and/or severity of an adverse event.
FCPS also has over 24,000 full-time employees. Finding the right ones, helping them grow, and managing all of them can be quite tedious. The offices with the FCPS Department of Human Resources are tasked with recruiting, developing, recognizing, and retaining employees. In order to achieve these objectives, internal controls are in place to reduce risks such as hiring an unqualified candidate, or someone with a disqualifying criminal history. With all these employees, FCPS also has a Department of Financial Services who manages the financial side of the payroll process. Internal controls over the payroll process help ensure that employees are paid timely and in the correct amount.
While internal controls can be a complex topic, their importance can be seen by just looking at the organization from a 10,000 foot view. During an audit, OAG obtains an understanding of the specific control activities unique to an office or process to deliver audit results which are independent, relevant, and meaningful.
Did you Know?
National Dog Day
Today, August 26, is National Dog Day! And what better way to celebrate the occasion than a collage of the dogs of OAG!
Clockwise from the top-left corner: Kobe* (Danielle Moore, Auditor III), Osa (Chris Elliott, Auditor III), Lily (Joni White, Auditor II), Jackson and Rusty (Heidi Flannigan, EAA), and Toby Blue (Lorena Villarroel, Auditor I).
*A special remembrance for Kobe and Toby Blue, whose owners are spending their first National Dog Day since the passing of their furry best friends. Be sure to give your pooch a big hug and enjoy their company on this special day.
Regulation 4427 - Nonschool Employment
FCPS Regulation 4427 describes the limitations on employees' nonschool employment and provide guidelines to be followed when a supervisory employee employs another School Board employee.
This includes limitations such as accepting employment during regular work hours, or employment outside the hours and terms of his or her contract, that conflicts with the effective performance of contractual duties.
This regulation also includes limitations on accepting employment or performing work for an FCPS vendor under certain circumstances.
FCPS employees should be aware of nonschool employment limitations as described in this regulation.
Next Audit Committee Meeting
The next Audit Committee meeting is scheduled to occur virtually at 5:30 PM on September 23, 2020.
The agenda for the meeting will be available on BoardDocs prior to the meeting.
Fraud, Waste & Abuse Hotline:
(571) 423-1333 (anonymous voicemail)
InternalAudit@fcps.edu (email is not anonymous)
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