Audit Buzz Newsletter October 2024

Engagement and Office Updates

In this issue of the Audit Buzz, we provide an update on current engagements; discuss the fiscal year 2026 (FY26) Risk Assessment process; explain What is the Difference Between an Auditor and a Fraud Investigator in the Knowledge Hive; and offer a training opportunity for Fairfax County Public Schools (FCPS) employees.

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 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 four words

Current Engagement Update

At the October 28 Audit Committee meeting, OAG presented the following agenda items:

• FY24 Quarter 3 and Quarter 4 Continuous Monitoring Results  - OAG presented the results of the continuous monitoring procedures conducted for appropriated and non-appropriated transactions. Out of 204 sites in the sampling population, 112 sites had no exceptions noted; 49 sites had exceptions noted in three or fewer areas; one site had exceptions noted in four areas; one site had exceptions noted in six areas; and 41 sites did not have any transactions appear in the random transaction sampling. Exceptions were related to timely completion of procurement card and reconciliations, pre-approval of disbursements and procurement card transactions, timely payment, and sufficient documentation.
• FY24 Local School Activity Funds (LSAF) Audit - OAG presented the results of the LSAF Audit conducted at 202 sites with no finding and noted two observations. The first observation was related to noncompliance with regulations at 92 total sites regarding LSAF accounting procedures, cash disbursements, and cash receipts. The second observation identified risks related to the collection of cash receipts at schools and school-hosted events, which exist due to the manual nature of the current control activities. These observations did not have material effect on the FY 2024 Statement of Cash Receipts and Disbursements for FCPS as a division.
• FY25 Hollin Meadows Elementary School Business Process Audit (BPA) - OAG presented the results of one high, one moderate, and four low risk findings. The high risk finding is related to the dormant greenhouse equipment and the moderate risk finding noted improper payments to personnel. The four low risk findings include an untimely reconciliation of a Financial Management Reports (FMR), untimely payment to a vendor, cash disbursement made outside of the proper purchasing process, and purchases without sufficient documentation.  
• FY24 IT Systems Access Audit - OAG completed the IT Systems Access Audit.  The results of this audit are exempt from disclosure under the Virginia Code.  

OAG's Annual Risk Assessment and Audit Plan 

Every year, OAG conducts an independent risk assessment which considers the financial, operational, and reputational risks faced by FCPS. OAG develops its annual audit plan based upon the risk assessment results. Currently, OAG has begun the risk assessment process for the FY26 audit plan.

The risk assessment and annual audit plan prioritize areas by evaluating the associated risks. OAG then determines the FY26 audit plan with the top priorities. The proposed FY26 audit plan will first be discussed with the School Board Audit Committee around April/May, and then with the School Board in June/July.

Knowledge Hive

What is the difference between an auditor and a fraud investigator? 

The main difference between an auditor and a fraud investigator is that an auditor systematically examinations of ongoing processes or financial documents to ensure accuracy, compliance, effectiveness and efficiencies, while a fraud investigator thoroughly inquire into a specific matter to uncover facts and identify potential wrongdoing.

While auditors look for fraud, they may not be fraud investigators and not all fraud investigators are auditors. OAG is fortunate to have several auditors that are certified fraud examiners!  One of the responsibilities for certified fraud examiners, is to investigate fraud.  At OAG, we use our fraud, waste, and abuse hotline tips and perform preliminary inquiries to determine if evidence exist, then determine next steps.

Fraud investigators examine every transaction, this could be thousands of scrutinized transactions.  Investigators interrogate and dig.  In contrast, in auditing, we sample.  Sampling means that a few representative transactions are picked, and we pour over them.  Auditors are not designed to detect fraud.  Auditors’ responsibilities include the detection of material misstatements caused by fraud and is not direct to the detection of fraudulent activity per se. Auditors are required to consider the impact of fraud during the audit procedures.

Fun fact:  Fraud must be supported by criteria – meaning the law or statute has been violated.  Did you know that technically, you cannot call a fraud a fraud until a court of law calls it fraud?

Did You Know?

OAG Outreach and Education: Continuing Professional Education (CPE) Opportunity

OAG is registered with the National Association of State Boards of Accountancy (NASBA) and serves as the sponsor for the FCPS Continuing Professional Education (CPE) programs, dedicated to support FCPS employees with complimentary CPE credits required by various certification agencies.  OAG is pleased to offer a new NASBA training opportunity for FCPS employees to earn up to 3 CPE credits:

Course: Both Sides of an OAG Audit – Looking through the Lens of the Auditor and the Audit Client

Date: December 6, 2024

Time: 9:00 AM - 12:00 PM

Do you want to learn more about the audit process or how to prepare for an audit conducted by the Office of the Auditor General (OAG). OAG conducts performance audits in accordance with the annual audit plan approved by the School Board. These audits are conducted according to the generally accepted auditing standards (GAGAS) framework that provides guidance for performing high-quality audit work with competence, integrity, objectivity, and independence.

This training is designed for all FCPS employees and will focus on how OAG adheres to GAGAS and ensures audit independence throughout the audit process.  OAG will also delve into audits recently conducted including the FY22 Community Use Audit and the FY24 Food and Nutrition Audit. OAG has also invited staff from Community Use and Food and Nutrition Services to share an overview of their office and discuss the audit from their perspective.

FCPS employees may sign-up for the training on MyPDE.

Upcoming Events 

Next Audit Committee Meeting

The next Audit Committee meeting is scheduled for November 18 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: School Board Audit Committee]

Office of Auditor General Website | Audit Buzz Archive