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Audit Buzz Newsletter
May 2022
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In this issue of Audit Buzz, we summarize the status of current engagements, spotlight a fraud scheme, bid rigging, in the Knowledge Hive, and highlight a recent peer review (i.e. "auditing the auditors") performed by Auditor General, Esther Ko. Stay up to date with Office of Auditor General (OAG) current and future work by subscribing to Audit Buzz.
Prior editions of Audit Buzz are archived here on OAG's website.
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
- The May 25 Audit Committee meeting was postponed. OAG plans to present on the following agenda items at the June 22 Audit Committee meeting (full agenda and meeting documents can be found on BoardDocs):
- Staff Update
- Auditor General Update
- Status of FY22 Internal Audit Engagements
- Status of FY22 Internal Inquiries
- FY22 Business Process Audits
- Department of Human Resources
- Bucknell Elementary School
- FY22 ESSER III Continuous Monitoring Results
- In addition to the ongoing Continuous Monitoring, both the Information Technology (IT) Platform Implementation and Hardware Acquisition & Management audit and Legal audit are in process.
- OAG continues to serve as the project liaison for a comprehensive program review of FCPS’ special education, which American Institutes for Research (AIR) was contracted to perform. AIR completed all data collection activities, including focus groups and classroom observations, per the approved scope of work. AIR is currently analyzing all the data collected. The final (Year 2) report will be presented to the School Board between September and November 2022.
Below is a high-level timeline of the review:
Knowledge Hive
Fraud Spotlight - Bid Rigging Scheme
The Association of Certified Fraud Examiners (ACFE) recently published report - Occupational Fraud 2022: A Report to the Nations. This detailed report highlights research on fraud throughout the world. Which tells us that fraud is a global problem, effecting every organization.
According to the 2022 ACFE A Report to the Nations, the most common occupational fraud scheme in government and public administration industry is corruption. In today's article, we will spotlight a corruption fraud scheme, bid rigging.
What is bid rigging? It is a form of fraud in which a contract is promised to one party even though, for the sake of appearance, several other parties also present a bid.
Bid rigging red flags
Knowledge of "red flags" can help detect improper conduct. If you suspect possible misconduct look for a pattern of red flags, rather than one red flag before drawing a conclusion.
Some of the most common "red flags" associated with bid rigging include:
- Identical bids from different vendors
- A winning bidder subcontracts parts of the award to one or more losing bidders
- Contract specifications or requirements are unnecessarily restrictive or requires expertise concentrated in one vendor
- Evidence of personal relationships between contracting staff and vendors
Employees should report suspected improper activities to OAG's hotline. The Fraud, Waste, and Abuse hotline information is found at the bottom of this article.
Did you Know?
Milwaukee Public Schools Peer Review
During the week of April 25, Esther Ko, Auditor General, was invited by the Association of Local Government Auditors, to conduct a peer review at the Milwaukee Public Schools (MPS) Office of Audit Services (i.e. auditing the auditors!). During this visit, Ms. Ko served as the team lead in assessing the compliance with Government Auditing Standards of this Wisconsin-based public schools internal audit office. MPS has about 70,000 students with about 160 schools. This peer review opportunity brought insight to further strengthen OAG audit processes.
Next Audit Committee Meeting
The next Audit Committee meeting is scheduled for June 22, 2022. Please refer to BoardDocs for meeting information once it becomes available.
Fraud, Waste, and Abuse Hotline:
(571) 423-1333 (anonymous voicemail)
InternalAudit@fcps.edu (email is not anonymous)
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