Taking the Fear Out of Your Audit
A guide to selecting your auditor and
preparing for your audit
Neal Renuart, CPA
Audit Partner
www.bkhmcpa.com
Disclaimer
No material in this presentation workshop is
intended to be nor should it be construed as
legal advice. If you have specific questions
pertaining to your school, please consult
your school’s attorney.
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Welcome/Agenda
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How to go about selecting your auditor
The importance of selecting a quality auditor
What is an audit?
The audit process
Auditor vs. management responsibilities
Reports issued after audit
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Finding a Firm to Bid on Your Audit
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Technical Assistance Paper – Auditor
Selection Process
Send out your RFP (Request for Proposal) to
at least 3 firms and keep proof that you
have sent it out (you do not have to get 3
bids back)
Start the process early – try and select
before the school year is over or even in the
spring
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Finding a Firm to Bid on Your Audit
(cont’d.)
Where to find firms to submit your RFP to:
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Florida Consortium of Public Charter Schools
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Florida Charter School Alliance
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Attend the charter school conference and
meet the firms who attend
Search the Florida Auditor General site and
review other school’s audit reports to see
who they used
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Importance of Selecting a Quality Auditor
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Sample RFP at the consortium website
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Important things to consider:
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You want someone that will be your partner and not just
your auditor that you see once a year
Ask about what your auditor does to help you become and
stay in compliance
How are they proactive in assisting their clients and
ultimately you
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Selecting Your Auditor
•Note that the Board
must vote on and
approve the new audit
firm.
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•Board members should
think about their fiduciary
duty to the school as a
Board member and
consider all relevant
facts, firm qualifications
and quality of the audit to
be received and not
focus solely on fees.
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What does an audit of a charter school entail?
An audit of a charter school is made up of two components:
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A financial audit
A compliance audit
A financial audit is the examination of financial statement information
for the purposes of expressing an opinion on the fairness with which
they present the school’s financial position and results of operations in
conformity with generally accepted accounting principles.
A financial audit provides reasonable assurance that the financial
statements are free of material misstatement.
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What does an audit of a charter school entail?
(cont’d.)
The compliance portion of a charter school audit ensures
that each charter school is meeting the requirements of
over 100 different Florida Statutes.
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These compliance requirements range from ensuring that
your student files contain the required ESE designation
supporting documents to Board members obtaining their
required training to submitting your school’s parent liaison
contact information in writing to each students’ parent or
guardian.
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Preparing for Your Audit
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Planning
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Interim field work
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Final field work
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Report creation and issuance
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Planning
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Client assistance/request list
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Advance preparation, meetings and discussions
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Designating a primary audit contact person
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Client Assistance List
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Be prepared! Pull all information requested before
the auditor arrives
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Make sure books and records are closed and final
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Provide information in electronic format, when
possible
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If you do not understand something the auditor
requests, just ask (again, before the auditor
arrives)
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Designated Audit Contact
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Designate one primary contact for auditor to
communicate with
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Put one person in charge of pulling client
assistance information
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Make the audit requests a priority and be
available for questions during the audit
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This makes it easier to get any audit issues
resolved timely
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Who Should be Involved?
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Board of Directors/Audit Committee
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Management/Administration
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Responsible for oversight
Responsible for day-to-day activities and proper financial
reporting
Accounting Staff
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Provide supporting documentation for audit
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Interim and Final Fieldwork
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Have school staff available during fieldwork to
answer questions and gather additional items
requested
The better prepared you are before they arrive,
the easier and smoother everything goes – it is
worth it to invest the time and effort up front
If you received/expended more than $500,000 in
federal funds/grants, you will need a special
additional audit commonly referred to as A-133
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Report Creation and Issuance
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Who should review and approve the draft of the
financial statements and compliance report?
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Discuss any audit adjustments and make sure they
are understood before agreeing to them
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Discuss any compliance findings
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Write your explanation or rebuttal letter
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Auditor’s Responsibilities
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To express an opinion on the financial statements
– and to report on compliance matters
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To provide reasonable assurance that the financial
statements are fairly presented
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To obtain an understanding of the client’s internal
controls sufficient enough to plan the audit
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Tests of controls are not required
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Management’s Responsibilities
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To make all management decisions
To establish and maintain internal controls for
monitoring activities, selection and application of
accounting principles and fair presentation of the
financial statements
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To meet compliance requirements throughout the
school year
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To design and implement controls to prevent and
detect fraud
Finalizing the Audit
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Drafts provided to the Board or management to
approve
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Management representation letter (MRL)
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Subsequent events representation
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Approval, signed MRL and subsequent events
update requirement before final audit can be
released
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Management Representation Letter
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Management’s acknowledgement of its
responsibility for the financial statements
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May contain specific representations unique to
each organization (for example, OMB A-133)
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Should be signed by persons primarily responsible
for financial reporting
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Reports Issued
Audit Report
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Supplementary Information
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Basic financial statements and notes
Management’s Discussion and Analysis
Other Required Supplementary Information (such as
budgetary comparison schedules)
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Report on Internal Control and Compliance
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Management Letter
SAS 114 – Required Communication to
Management
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Reports Issued
(cont’d.)
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SAS 114 – Required Communication to
Management
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If Applicable; Special A-133 Reporting
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Schedule of expenditures of federal awards
Report on compliance with major program(s)
Schedule of findings and questioned costs
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Resources
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RFP Sample
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TAP
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http://www.floridacharterschools.org/index.asp
Charter School Alliance
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http://www.floridacharterschools.org/public/charterschoollawandco
mpliance.asp
Florida Consortium of Public Charter Schools
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http://www.floridacharterschools.org/public/taps.asp
http://www.flcharteralliance.org
BKHM Charter School Website and Blog
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http://www.bkhmcpa.com
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Questions?
Contact Information:
Neal Renuart, CPA
1560 Orange Avenue, Suite 600
Winter Park, FL 32789
407-998-9000
Email: nrenuart@bkhmcpa.com
Website: www.bkhmcpa.com
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Thank You
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