Audit Buzz Newsletter September 2024

Engagement and Office Updates

In this issue of the Audit Buzz, we provide an update on current engagements; discuss Delayed Deposits in the Knowledge Hive; highlight recent events; and introduce a new hire. 

Prior editions of Audit Buzz are archived here on Office of Auditor General's (OAG) website.

As always, we appreciate the cooperation and courtesies extended to our staff by Fairfax County Public Schools (FCPS) management and staff during all past, current, and future audit engagements.

Here is a challenge to test your audit knowledge, before we begin this issue:

Say What You See

*Hint: this is one word

Current Engagement Update

At the September 16 Audit Committee meeting, OAG presented the following agenda items:

• OAG FY25 Audit Committee Kick Off  - OAG provided an overview of the team, roles and responsibilities.  
• FY24 Grants Audit Report - OAG discussed the results of the one finding related to compliance with the grant process and one observation related to updating the Grants Regulations and Manual. 
• OAG Audit Follow-Up Status  - OAG presented the follow-up status of open audit recommendations as of July 31.
• FY24 Continuous Monitoring Results for Online Travel and MyTime - As a pilot, OAG utilized an analytical software, ACL, to analyze patterns and trends. We selected and tested transactions in the Online Travel System for nonlocal travel and MyTime for time and attendance.

Knowledge Hive

Delayed Deposits – An illustrative example of how an employee “borrowed” money from the employer.

At the OAG, we strive to protect the assets of FCPS.  One of the most liquid assets and could be subject to misuse, is cash.  We are going to study a situation at Bluebell HealthCare (a $1 billion public health care system), of how an employee scheme was revealed when an assistant ran out of time to repay the “borrowed” money.

Below are some of the facts of the scheme:

• An administrative assistant (AA) has been with Bluebell for 15 years, where she collected all revenue, prepared a deposit ticket, and delivered the deposit to the bank.
• The staff accountant (SA) had been assigned to reconcile the revenue collections and deposits. He happened to be a community group friend with the AA. Because the SA trusted the AA, he had not performed the reconciliation procedures correctly.
• An unusual pattern was observed, where there were no deposits received for over 10 days. The internal auditor noticed that (a) the deposits often lagged for 7 days (or more), and (b) the deposits were caught up right after payday and the lagging increased throughout the next payroll cycle.
• The internal auditor interviewed the AA. She confessed that she had borrowed the missing cash and was planning to return it as soon as she could.

Lessons Learned:

• Cash collection and reporting procedures should be segregated to ensure no one can commit and conceal a theft.
• Independent reconciliations and account verifications should be performed routinely.
• Transactions must be recorded correctly as to the amount and date of occurrence.

[Source: Institute of Internal Auditor magazine, February 2024 issue.]

At FCPS, we encourage families to use MySchoolBucks and etix (for athletic events) to remit any necessary payments for students.   Meanwhile, OAG will continue with our continuous monitoring audits at athletic events focusing on gate receipts, and business process audits at schools, to ensure proper safeguards are put into place, to protect our assets.

OAG Recent Events

OAG at 2024 Leadership Kickoff 

Esther Ko presenting at 2024 Leadership Kickoff

OAG presented to over 300 principals and school-based administrators in July at the 2024 Leadership Kickoff event. To compliment the Olympic theme, OAG took A Deep Dive into School Audits and Cases to discuss recent fraud, waste, and abuse cases that impacts administrators. OAG also took it to PARIS and shared the top themes and high-risk school audit findings from the past year: purchasing, activities with cash receipts, reconciliations, irregularities in payroll/timekeeping, sufficient documentation.

We appreciate FCPS management to allow this training event to happen, so that we can raise awareness amongst our school leaders.

Did you Know?

Welcome OAG New Hire

Tim Tishman, CPA, Auditor Information Technology Tim joined OAG as an Information Technology Auditor in September 2024. Prior to joining FCPS, Tim had 12 years of professional experience in CPA firms and private industry. As a technology consultant, Tim implemented new and cutting-edge Microsoft software. As an internal auditor, Tim conducted compliance and technology audits and as an external auditor, Tim conducted financial statement audits. During his free time, Tim enjoys spending time with his wife and playing soccer and hide and seek with his son. Tim is excited to bring a technology-forward mindset to FCPS. In the rapidly changing world of technology, Tim hopes to help in the protection of student and employee information.

Upcoming Events 

Next Audit Committee Meeting

The next Audit Committee meeting is scheduled for October 28 at 4:30 PM.  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)

Online Submission Form

[Answer: Hotline]

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