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Office of Internal Compliance (OIC) Annual Report to the Board March 25, 2010 Presented By: Connie Brown Executive Director – Office of Internal Compliance Date: June 1, 2020

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Page 1: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Office of Internal Compliance (OIC)Annual Report to the Board

March 25, 2010Presented By: Connie BrownExecutive Director – Office of Internal Compliance

Date: June 1, 2020

Page 2: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

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Purpose:

• To provide an update on the current status of the OIC

SY2020 Audit Plan

Roadmap:

This presentation will provide:

• An overview on the status of the SY2020 Audit Plan

and follow up on recommendations

• A look at how OIC continues to add value

Administration’s Summary:

• OIC continues its focus on risk-based auditing and is

working collaboratively with APS leadership to

implement thoughtful, cost-effective recommendations

to manage and mitigate risks

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Organization Chart - Independence

Atlanta Board of Education

Audit Committee

Office of Internal Compliance Superintendent

The OIC Executive Director reports to the School Board through its Audit

Committee. This reporting structure provides the independence necessary for

objective appraisals of the district’s operations. To date, there have been no

instances where the department’s independence has been compromised.

Board Members

Leslie Grant, Chair

Erika Mitchell

Aretta Baldon

Community Advisors

Brian Hawkins

Leslie Ward

Earl Fagan, Jr.

Audit Committee Members

Page 4: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Annual Audit Plan

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• OIC Executive Director prepares and submits an

annual audit plan to the Audit Committee for review

and comment at the start of each school year

• Risk Assessment developed every three years

• Identify potential topics:

• Review the external auditor’s report

• Consider previous year’s audit findings

• Consider requests and suggestions from the Audit

Committee, Superintendent and CFO, and other

interested parties

• Determine feasibility of audit topics and the

availability of resources

Page 5: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

SY2020 - Status Update

5

23%

55%

18%

5%

Audit Plan Status4/30/2020

Not Started In Process Completed Cancelled

9%

64%

27%

Audit Plan Status6/30/2020

In Process Completed Cancelled

Page 6: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

SY2020 - Status Update

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Project Name

Status

4/30/2020

Status

6/30/2020

Miscellaneous Cash Activity Account Funds (MCAAF) Audits

Bejamin E. Mays HS In Process Completed

Booker T. Washington In Process Completed

Maynard H. Jackson In Process Completed

Mary Lin ES In Process Completed

Sutton MS In Process Completed

Morris Brandon ES In Process Completed

John Lewis Invictus Academy MS In Process Completed

School 8 Not Started Cancelled

School 9 Not Started Cancelled

School 10 Not Started Cancelled

School 11 Not Started Cancelled

School 12 Not Started Cancelled

Payroll Audit In Process In Process

Athletics Completed Completed

Transportation - Parts Vendor Oversight Cancelled Cancelled

Parking Lot Funds Process & Cash Management Review Completed Completed

P-Card Continuous Auditing (Quarterly) Completed Completed

Lawson ERP Upgrade Implementation Review In Process In Process

Entity-wide Risk Assessment In Process Completed

IT Risk Assessment Completed Completed

IT Audit - Vendor Management/Third-Party Review In Process Completed

IT Audit - Security and Vulnerability Review In Process Completed

Recurring Projects

Investigations Ongoing Ongoing

Audit Follow Up Ongoing Ongoing

Page 7: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Internal Compliance Project Summaries

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The following 5 slides detail summaries of our reports issued as of April 30, 2020. The

full reports and management responses are available on the OIC website at:

https://www.atlantapublicschools.us/Page/59000

Page 8: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Pay Parity (FY19-12)

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The audit was designed to achieve the following objectives:

• Determine if the Compensation Team has documented policies and procedures

for calculating salaries and wages

• Determine if the Compensation Team is accurately:

–calculating employee experience

–verifying job re-classifications

–applying the right step (via the Salary Step Schedule) based on employee

job, years of experience and pay grade

Auditor Conclusion: Pay Parity is performing effectively ensuring the same

salary is paid to employees working in the same job with the same pay

grade/years of experience, and ensuring these employees are placed on the correct

step per the applicable APS Salary Schedule.

There were no Findings noted for the Pay Parity audit; however, 4 observations

were noted as a byproduct of the Pay Parity audit.

Page 9: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Construction Risk & Controls Assessment (FY19-13)

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The audit was designed to achieve the following objective:

• Assess the risk and controls of the Construction Project Lifecycle to include

the following:

– Assessing the Construction Lifecycle

– Identifying risks and controls in the processes

– Testing a select group of internal controls

Auditor Conclusion: Overall, the Construction Project Life Cycle was managed

using industry best practices. Several areas were operating effectively, including

purchase requisitions and payment applications.

OIC made 5 recommendations; 4 opportunities for improvement and 1

opportunity for the managing of excess cash balances.

Page 10: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Parking Lot Funds & Cash Mgmt. (FY20-01)

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The audit was designed to achieve the following objectives:

• Document the process for fundraising, parking lot management, cash handling, and

accounting for funds

• Identify internal controls, assess the adequacy of those controls related to the risks,

and determine if opportunities for process improvement exist

Auditor Conclusion: Cash management processes and internal controls need to be

strengthened to make certain parking lot funds are properly tracked, accounted for and

safeguarded. Also, management oversight and monitoring of cash handling functions

need to be improved to make sure there is consistent recording of funds in SABO for

school and Accounting Department tracking purposes.

OIC identified 4 recommendations to assist the district in managing parking lot

fundraisers as a result of the audit.

Page 11: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Athletics (FY20-02)

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The audit was designed to achieve the following objectives:

• Gain an understanding of the key processes, risks, and controls within

Athletics as it relates to student athlete eligibility, health & safety, and

program management

• Determine if controls are in place and adequately designed to address

associated risks

• Evaluate the Athletics program processes and procedures to determine if

opportunities for improvements exist

Auditor Conclusion: Key areas within Athletics were identified where

improvements can and need to be made. There were areas identified where

efficiency and effectiveness of operations can be improved through the execution

of established policies and procedures, implementation of internal controls around

eligibility determinations, and record retention.

OIC made 9 recommendations to assist the district in managing the areas of focus

as a result of this audit.

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P-Card Continuous Audit (FY20-03)

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The audit was designed to achieve the following objectives:

• Determine if P-Card transactions were processed outside of the APS Purchasing Card

guidelines.

Auditor Conclusion: P-Card monitoring oversight needs to be strengthened to make

sure improper card usage does not go undetected.

OIC shared 5 recommendations to assist the district in managing and monitoring the P-

Card activity as a result of the audit. OIC used custom tableau scripts to extract and

analyze purchasing card data. OIC has offered to share tableau scripts with the P-Card

team for use in their oversight and monitoring efforts.

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Follow-up on Audit Recommendations

Recommendations from audits become meaningful only when management agrees and

implements corrective action plans to address risks and gaps in processes.

Total Audit Recommendations

Less:

Suspended MCAAF Audit (School Audits)

Recommendations

Corrective Action Plans Implemented

& Validated by OIC

Total Active Recommendations

As of April 30, 2020

258

(16)

(199)

43

Page 14: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Follow-up on Audit Recommendations

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**Corrective Action Plan (CAP)

Report # Report Report Date# of Recs (Per Report)

# of Open

Recs

CAP**

Implemented

Various Miscellaneous Cash Activity Account Fund (MCAAF) Audits SY2017 - SY2019 199 195 4

FY18-11 Transportation - Certification & Inspection Program December 18, 2018 11 8 3

FY18-19 IT General Controls Review September 7, 2018 9 0 9

FY19-08 Office of Innovation-Charter and Partner School Operations February 12, 2019 3 3 0

FY19-10 Procurement Sevices June 18, 2019 7 7 0

FY19-11 Infinite Campus Access Review March 21, 2019 2 2 0

FY19-12 Pay Parity July 29, 2019 4 4 0

FY19-13 Construction Projects Risk and Control Assessment July 31, 2019 5 5 0

FY19-14 Infinite Campus Monitoring Review March 21, 2019 2 2 0

FY19-15 Nutrition Vendor Management & Oversight April 9, 2019 3 3 0

FY20-01 Parking Lot Funds Process & Cash Management Review December 4, 2019 4 4 0

FY20-02 Athletics Audit March 9, 2020 9 9 0

Total 258 242 16

Page 15: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Ethics & Compliance Hotline (4/30/2020)

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• 69 cases reported via Ethics & Compliance Hotline

• 62 (90%) referred to Office Employee Relations (OER)

• 7 (10%) assigned to OIC

o Accounting/Audit Irregularities

o Conflicts of Interest

o Policy Issues

o Employee Relations

• 4 additional concerns received via the Board Office

• 3 of 11 OIC assigned cases closed

1-877-801-7754

www.tnwinc/atlantapublicschools

Page 16: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

OIC – An Excellent Investment

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➢ Multiple recommendations were presented

and accepted by management that will

lead to better efficiencies and effectiveness

of operations:

• Developed and offered to share data

analytic test scripts that would allow

for greater coverage and review of p-

card transactions in less time. (P-

Card Continuous Audit)

• Identified methods to account for,

track and record the amount of funds

collected during parking lot

fundraisers spaces

• Identified gaps in the execution of

key procedures designed to

effectively manage the district’s

Athletics Programs and safeguard

our student athletes. (Athletics)

➢ Identified an opportunity for leadership to

optimize earnings on invested funds. OIC

estimated that holding cash balances in

accounts with the highest rate of return

would have yielded approximately $600,000

in additional investment earnings.

(Construction Projects – Risk & Control

Assessment)

➢ Identified $103,000 in overstatements of

Guaranteed Maximum Price (GMP)

Calculation and Construction Manager Fees.

(Construction Projects – Risk & Control

Assessment)

➢ Researched and identified an alternative

option for collecting parking lot funds.

Alternative method would eliminate the use

of cash and minimize the potential for theft

of funds. (Parking Lot Funds Process & cash

Mgmt. Review)

Page 17: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Questions

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Page 18: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Contact Information

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Connie Brown, CPA, CIA, CRMA

Executive Director, Internal Compliance

130 Trinity Avenue, S.W.

Atlanta, GA 30303-3624

Office: 404-802-2732

Mobile: 404-408-4869

Fax: 404-802-1717

[email protected]

Page 19: Office of Internal Compliance (OIC)fil… · working collaboratively with APS leadership to implement thoughtful, cost-effective recommendations to manage and mitigate risks. 3 Organization

Contact Information (cont’d)

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https://www.atlantapublicschools.us/domain/1144