Tom Josiah Consulting, LLC

Imagine your auditors have arrived on site and you are not ready. The accounts haven’t been reconciled, adjusting entries are still pending, and the general ledger is incomplete. In the meantime, your auditors are in the conference room waiting to get the information requested in the Planning Memo. More so, the PDE-2057 deadline is around the corner.  What can you do to avoid this situation for your next audit? Below are some tips to help you be proactive and properly plan for your audit:

• Make sure the general ledger subsidy accounts reconcile to the FAI system at June 30. Do not wait to get the subsidy audit confirmation to complete this process. The differences, if any, should be related to revenue accruals or deferrals. Record any subsidy deduction payments. Have available for your auditors an electronic copy of the subsidy audit confirmation as well as a general ledger detail of all subsidy accounts.
  
  
• Print out from the FAI system a detail of all new federal grants for the year showing the grant period and the grant award amount. This information will assist your auditors in preparing the Schedule of Expenditures of Federal Awards.
  
  
• Obtain copies of the monthly tax collection reports for all of your taxing jurisdictions and ensure that the amounts paid to your district as reflected in the reports agree to the general ledger postings. Have the monthly tax reports, tax duplicate, general ledger detail of the tax accounts, and lien filings available in your audit binder. Prepare tax reconciliation schedules for all your taxing jurisdictions as soon as you close out the tax year and have them ready for your auditors.
  
  
• Print a general ledger detail of the debt service payment accounts and ensure that the payments reconcile to the debt service schedules. Have available all debt service schedules related to any new debt issues. The reconciliation can be performed after you make the final debt payment for the year.
  
  
• Print out a detail of the 700 object code accounts for the non capital project funds and have available all invoices for expenditures equal to and above the capitalization threshold. For the capital project funds provide a general ledger detail of the fund and have the invoices available for your auditors.
  
  
• Prepare the audit confirmations and send them to the auditors immediately after year end.  Without confirmations auditors have to perform alternate procedures which may involve requesting for more documentation from you.
  
  
• Prior to fieldwork, provide your auditors with the beginning and ending check numbers for checks generated in the fiscal year. Ask your auditors to provide you with the list of generated check numbers so you may have the related invoices available prior to commencement of the audit.
  
  
• Ensure that the summer payroll for teachers who will receive their salaries through the summer have been properly posted as expenditures as of June 30, and are reflected as accrued salaries with the related benefits and withholdings.
  
  
• Identify invoices paid subsequent to year end that relate to the previous fiscal year, and ensure that they are posted as accounts payables at fiscal year end. Set aside these invoices so that they are readily available for your auditors to review.
  
  
• Identify receipts received subsequent to year end that relate to the previous fiscal year, and ensure that they are posted as accounts receivable at fiscal year end. Set aside these receipts so that they are readily available for your auditors.
  
  
• Communicate with human resources so they can calculate the sick leave and vacation balances for the personnel who have qualified to retire at June 30. Ensure that the GASB 45 actuarial valuation report is updated and available for the auditors.
  
  
• Print the Trial balance and review it for any misplaced significant debit or credit balances and unusual significant balances. Ensure that the fund balance on the trial balance reconciles to the prior year ending fund balance.

 Although the above tips are not all-inclusive, they will certainly help you plan better, eliminate delays in providing requested information, and perhaps result in some cost savings.

For questions or comments, please do not hesitate to contact me.