San Jacinto Community College District
Internal Audit Work Program
AUDIT NAME: Bank Reconciliations Audit
AUDIT PERIOD: January 1, 2011 – May 31, 2011
Program Based on Presumed or Anticipated Conditions
WP Ref
GENERAL:
Bank reconciliations are an integral tool for any
organization to completely and accurately track
activity in all major operating bank accounts.
Bank reconciliations are performed by comparing
existing accounting records (typically from the
Banner Financial System) with the records
presented on the original bank statements.
Sometimes, discrepancies between the records
might occur due to the timing differences when
the data is recorded in the accounting and in the
bank books. The purpose of bank reconciliations
is to check whether any discrepancies are due to
timing error, human error, or unauthorized
withdrawals (fraud).
OBJECTIVES:
1. Ensure that comprehensive procedures have
been established and documented addressing
the bank reconciliation process.
2. Ensure that bank reconciliations are prepared
for each monthly cycle and in a timely
manner.
3. Ensure that complete and accurate internal
accounting records are present and retained.
4. Ensure that proper segregation of duties exist,
with the preparer prohibited from signing any
checks, handling cash, conducting payables
activities, or access to edit records in the
Banner Financial System (general ledger).
5. Ensure that all discrepancies between
Date
San Jacinto Community College District
Internal Audit Work Program
AUDIT NAME: Bank Reconciliations Audit
AUDIT PERIOD: January 1, 2011 – May 31, 2011
Program Based on Presumed or Anticipated Conditions
WP Ref
accounting records (general ledger) and bank
statements are thoroughly explained, with
active steps being undertaken to resolve any
discrepancies.
6. Ensure that completed bank reconciliations are
reviewed and signed by an appropriate level of
management.
7. Ensure compliance with college record
retention guidelines for bank statements and
reconciliations.
PLANNING (Planning Section):
1. Prepare an engagement memo to announce the
audit.
2. Prepare Auditor’s Independence Statement.
3. Obtain an understanding of the auditee’s
operations through research and interviews.
Document the system of the area being
audited, this includes all significant day-to-day
operations and processes as it relates to
contract administration; verify the accuracy of
your understanding with auditee.
4. Perform a general overview of the internal
control environment and establish the scope of
the audit, document in general section above.
5. Ensure that management has considered
potential fraudulent activities by inquiring
with management about their knowledge of
Date
San Jacinto Community College District
Internal Audit Work Program
AUDIT NAME: Bank Reconciliations Audit
AUDIT PERIOD: January 1, 2011 – May 31, 2011
Program Based on Presumed or Anticipated Conditions
WP Ref
fraud opportunities within the department and
the steps taken to minimize these.
6. Develop appropriate audit tests to provide
assurance that management’s objectives are
being met, and that fraudulent activities have
not occurred. Document in audit work
program.
INITIAL AUDIT PROCEDURES (Section A):
1. General
a. Obtain the following, where applicable:
i) Policies and Procedures (P&P)
ii) Organizational Charts
iii) Prior Audit Reports
iv) External Auditor Management Reports
v) Regulatory Examination Reports
vi) Related Information Regarding Laws
and Regulations
b. Review all information above to ensure:
 Compliance with all relevant policies
and procedures;
 Proper segregation of duties exists (org
chart + system doc);
 Corrective action plans to address
noted deficiencies in prior examination
reports or by external auditors have
been implemented;
 Compliance with all relevant
regulatory laws and guidelines.
INFORMATION UTILIZED (Section B):
1. Forms Utilized [where applicable]
Date
San Jacinto Community College District
Internal Audit Work Program
AUDIT NAME: Bank Reconciliations Audit
AUDIT PERIOD: January 1, 2011 – May 31, 2011
Program Based on Presumed or Anticipated Conditions
WP Ref
a. Obtain copies of all forms used by the
department/within the area of the audit.
b. Evaluate for adequacy and effectiveness.
c. Review forms used and practices to ensure
that redundancies or inefficiencies do not
exist.
2. Generated Reports [where applicable]
a. Obtain copies or samples of all reports
generated for the audited function and
determine their use and distribution.
Include system reports and manual reports
if necessary. Ensure that the information
presented in these reports is tested or
analyzed at some point in the audit
program.
AUDIT TESTING (Section C):
1. Policies and Procedures
a. Request and review all policies and
procedures relating to the preparation of
bank reconciliations and ensure that these
documents accurately reflect the processes
and controls surrounding:
i. Staff responsibilities
ii. Bank reconciliation format
iii. Treatment of discrepancies
iv. Segregation of Duties
v. Review and approval
vi. Record retention
b. Document method utilized to ensure that
personnel responsible for the preparation
Date
San Jacinto Community College District
Internal Audit Work Program
AUDIT NAME: Bank Reconciliations Audit
AUDIT PERIOD: January 1, 2011 – May 31, 2011
Program Based on Presumed or Anticipated Conditions
WP Ref
of bank reconciliations are adequately
trained and knowledgeable of procedures.
c. Ensure procedures are in place for
notifying the bank when an authorized
signer’s employment is terminated.
d. Ensure procedures are in place for
instructing banks not to cash checks or
money orders drawn to the order of the
college.
e. Ensure procedures are in place for
instructing banks not to accept checks or
money orders drawn to the order of the
college for deposit in special accounts such
as payroll.
2. Bank Reconciliation Preparation
a. Obtain a listing of all operational SJCCD
bank accounts that have been open at least
six months.
b. Obtain the original bank statements for a
sample of six months between September
1, 2010 and June 30, 2011
c. Obtain the full bank reconciliations
performed for all sampled months.
i.
Determine that bank
reconciliations were performed
timely based on the date of the
Date
San Jacinto Community College District
Internal Audit Work Program
AUDIT NAME: Bank Reconciliations Audit
AUDIT PERIOD: January 1, 2011 – May 31, 2011
Program Based on Presumed or Anticipated Conditions
WP Ref
bank statements.
d. Ensure that the balance per the Banner
Financial System (general ledger) tallies
with the balance per the original bank
statement. Match all collections and
disbursements recorded against those of
the bank statement.
i. Note any discrepancies not
identified.
e. Review the nature of the reconciling items
and note actions taken/to be taken. Ensure
all discrepancies are adequately supported
by original records.
f. Determine that any bank adjustments (if
applicable) are properly documented.
g. Inquire as to whether there are any
dormant or unused bank accounts. If so,
inquire as to why these have not been
closed.
3. Segregation of Duties
a. Determine through interviews what job
functions the preparer of bank
reconciliations is responsible for.
i.
Note whether the preparer has
any access to checks, cash, or
payables.
b. Determine the Banner access levels of the
preparer(s).
i.
Note any access that enables the
preparer to edit in Banner.
Date
San Jacinto Community College District
Internal Audit Work Program
AUDIT NAME: Bank Reconciliations Audit
AUDIT PERIOD: January 1, 2011 – May 31, 2011
Program Based on Presumed or Anticipated Conditions
WP Ref
c. Inspect a sample of checks from the bank
statements and ensure that they are only
signed by authorized personnel.
d. Determine that completed bank
reconciliations are reviewed and approved
by an appropriate level of management.
i.
Document any exceptions.
e. Determine who is designated to perform
bank reconciliations in the absence of the
primary preparer.
4. Safeguarding of Checks/Assets
a. Is the supply of unused checks properly
safeguarded? Is access to these checks
limited to authorized personnel? Are these
authorized personnel separate from the
person who reconciles the bank
statements?
b. Is access to the check printing system
adequately controlled and includes only
personnel with a need for check printing as
part of their jobs.
c. Ensure that check signatures reflect the
proper individuals as dictated by policy.
5. Record Retention
a. Ensure that record retention procedures
surrounding bank reconciliations and bank
statements reflect state standards.
Date
San Jacinto Community College District
Internal Audit Work Program
AUDIT NAME: Bank Reconciliations Audit
AUDIT PERIOD: January 1, 2011 – May 31, 2011
Program Based on Presumed or Anticipated Conditions
WP Ref
REPORTING:
1. Document summaries of all audit findings as
soon as exceptions are noted.
2. Recommend to auditee any appropriate
adjustments, internal control or operational
recommendations as a result of the review.
3. Determine whether to include each audit
finding in final audit report based on the audit
disposition, the overall materiality to the audit
and the relative risk exposure.
4. Prepare the draft audit report for review by
auditee.
5. Distribute tentative and preliminary report to
VCFA for review.
6. Conduct closing conference with auditee and
obtain corrective action plan.
7. Compile final audit report.
8. Submit final report to distribution list.
POST AUDIT:
1. Organize all relevant workpapers in a clear
and logical and manner and cross reference
audit steps to their corresponding workpapers.
2. Compile and securely store audit CYA files
for reference if needed.
3. Update Audit Index with audit information.
Date
San Jacinto Community College District
Internal Audit Work Program
AUDIT NAME: Bank Reconciliations Audit
AUDIT PERIOD: January 1, 2011 – May 31, 2011
Program Based on Presumed or Anticipated Conditions
WP Ref
Auditor Signature: _ ___________________
Date: ____________________________________
Date