EDLD 5342 Week 4 Part 5

How is the external auditor selected?

In GPISD, the first step to finding a financial auditor is to ensure that the professional chosen meets the following criteria:  TEC 44.008(a) requires a financial audit to be performed annually by a certified public accountant holding a permit from the Texas State Board of Public Accountancy” (TEA FAS guide, pg 4).  To begin the process, GPISD requests that all interested auditors first submit Request for Qualifications (RSQ).  Our district then requests letters of reference for candidates meeting the qualification criteria.  Candidates are then selected based on their ability to perform a quality external audit.   

How does the auditor conduct the audit?

TEA has three standards the auditor must adhere to:

1.          A person or persons having adequate technical training and proficiency as an auditor must perform the audit.

2.          In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors.

3.          Due professional care must be exercised in the performance of the audit and the preparation of the report (TEA FAS guide, pg  17-18).

Additionally, auditors must also follow the Government Auditing Standards as well as the Generally Accepted Accounting Principles.

The overreaching goal of the external auditing process is to describe the degree to which the district appropriately uses federal, state, and local funding.  This auditing process does not occur only at one point during the year.  It is a process which occurs continuously over the entire fiscal year.  The external auditor must provide the district with an unbiased opinion regarding where the district is spending funds appropriately and what needs to be fixed.  In meeting with the district CFO, I inquired about the general types of findings revealed in the external auditors report.  He stated that if items are found, the external auditor helps to remedy the issue by providing guidance and timelines for the resolution of the problem.    The district is then responsible for responding to the guidance. 

The auditors final report has the following components:

·   Audit procedures used

·   Items reviewed

·   Finding of audit

·   Future recommendations

This report is completed once the books are closed at the end of the fiscal year.  The report is then shared with the Board of Trustees and with TEA.  This process holds the district accountable for sound procedures when spending district funds and accounting for these expenditures.  This process works toward eliminating the misuse of district funds.