Audit Committee Internal Audit Work Plan Recommendation October 4, - - PowerPoint PPT Presentation

APS Internal Audit Department

Audit Committee Internal Audit Work Plan Recommendation

October 4, 2018 John Mickevice

Presentation Overview

• Overview of Internal Audit at APS
• Criteria Used to Select Possible Projects
• Projects Selected per Risk Assessment
• Follow-up on Prior Audits

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Overview of APS Internal Audit

What is Internal Audit?

• Independent appraisal activity for the review of
• perations as a service to the administration or Board.
• Managerial control that functions by measuring and

evaluating the effectiveness of other controls.

What is the purpose of Internal Audit?

• Provide operational, financial, and compliance audit

services to APS

• Advisor and resource to school leadership and School

Board on policy, internal controls and best practices in fiscal and business operations

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Overview of APS Internal Audit

Internal Audit reports to the Board through the Audit Committee. Audit Plan is developed …

• In Consultation with the Audit Committee;
• With Priorities based on

–Risk Assessment –Input from School Board and Staff.

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Criteria Used to Identify Possible Projects

• Discussions with APS Directors and Supervisors:

– identify exposures that may exist for APS, – identify controls that may mitigate these exposures, – evaluate the risk

• 60 APS process areas identified

– Each process area evaluated based on 5 factors:

• Quality and Stability of Control Environment
• Business Exposure
• Public and Political Sensitivity
• Compliance Requirements
• Data Processing and Management Reporting

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Project Selection

• Process areas were ranked into three priority groups.
• Most areas fall in the medium risk group.
• Areas ranked low risk, while important to APS, do

not warrant as close attention as the higher risk areas.

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Internal Audit Project Recommendations

• Compare new school construction costs in Arlington to

comparable school districts.

• Review Student Transportation required by IEP or Federal
• law. Analyze current costs and research opportunities to

increase resource efficiency and effectiveness.

• Review Financial Controls at the Schools over onsite

receipt collection, deposit processing and check disbursement.

• Activity Fees: Analyze fees required to participate in school

activities & identify all funding sources.

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Comparison of New Construction Costs

 O’Connor Construction Mgmt. Inc. was selected to provide independent comparison of APS new construction costs to comparable school districts.  Internal Audit works with APS staff to coordinate and communicate APS requirements and APS cost information needed by the vendor to complete this project.

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Student Transportation

• Review student transportation required by IEP and

Federal and State law.

• Outline process to determine optimal

transportation options.

• Analyze cost of fulfillment of current

requirements.

• Research opportunities to increase resource

efficiency and effectiveness.

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Financial Controls at the Schools

• Interview Principal and Treasurer at 10 selected schools to

develop understanding of receipt collection, deposit processing and check disbursement.

• Goal is to observe current procedures and outline any best

practices currently in place.

• Follow-up with management on planned actions to institute a

Best Practices Manual.

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Activity Fees

• Summarize all fees required to participate in

each school activity.

• Outline all sources of funding, both APS and

external, for each activity.

• Update information obtained in 2014.

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Follow-up on FY 2015 Audits

Payroll Processing and Controls

• Follow-up with management on planned

actions:

–Increased restrictions on electronic access to human resources and payroll data; –Implement a checks and balances process to ensure accurate payment adjustments;

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Follow-up on FY 2016 Audits

Financial Controls at the Schools

• Follow-up with management on planned

actions: –Document standard school treasurer financial functions in a Best Practices Manual; –Strengthen strategies for Treasurer vacancies and absences.

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Follow-up on FY 2017 Audits

Design & Construction Financial Controls  Follow-up on implementation of post

• ccupancy steps;

 Follow-up on documentation of financial and project management controls.

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Internal Audit Plan Approval

Next Step is Internal Audit Plan Approval Arlington School Board Action Item:

• ARLINGTON PUBLIC SCHOOLS Policy 10-4.01 –

Internal Audit requires that “subsequent to (Audit) Committee approval, the (internal audit) plan shall be submitted to the School Board for final approval…”

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Information Item – October 4, 2018 Board Meeting

Cost Study for Arlington Public Schools

• APS selected O’Connor Construction Management for

and independent comparison of construction costs specified comparable school districts.

• Report includes 30 schools’ cost data including

granular, line-by-line division cost data for 13 schools in Virginia, District of Columbia and Montgomery County.

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Cost Study for Arlington Public Schools

 APS construction costs are, on average, comparable to those in surrounding communities.  “Particular challenges - such as restrictive site constraints, lack of available..land, and a stringent community engagement process, to name a few - all add additional costs to APS’ construction projects.”

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Market Study for Arlington Public Schools

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Market Study for Arlington Public Schools

• 5% is advised for annual construction cost escalation.
• APS competes with both commercial and non-for-profit

construction developments.

• Construction labor shortages will impact the cost of new

construction projects.

• Cost of construction materials rose faster than the

price of completed buildings.

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Cost Study and Market Study for APS

Full reports of the Construction Cost and Market Studies for Arlington Public Schools are available on APS website: under School Board – Internal Audit tab

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