By: Krista M. Gardner, CPA
Member of the Firm

As the end of the school year wraps up, audit time is on the horizon. I wanted to share some thoughts on audit preparation from the mind of an auditor:

One of the first things I always initiate with my audit clients is a pre-audit meeting or phone call. This meeting is one of the most important steps in having a successful audit. It’s a good time for us to discuss and set expectations and review any changes or differences from the prior year. 

Some of the more typical questions that I ask my clients include:

• Have you had a new debt issuance during the year?
• Are you currently in the process of refinancing some debt?
• Did you open any new accounts or switch financial institutions? 
• Have there been any new union agreements, changes in payroll, or significant changes in positions?
• Have you switched or changed any of the third-party service providers that you work with?
• Have you received any new grants?
• Have you received notification of any noncompliance or findings related to your grants?
• Were there any large capital projects?
• Were there any changes to the school's financial policies and procedures?
• Do you need any assistance with implementing new and upcoming accounting pronouncements?
• And of course, top of mind this year - how has COVID-19 impacted your school? For most schools, COVID-19 will have a significant impact on your upcoming audit, touching on multiple areas, including funding and related testing, controls and related processes, expenses, and operations.

But it’s not just about me asking the questions. The pre-audit meeting is also an excellent opportunity for me to answer questions from the client. So my clients will always hear me ask, “What concerns do you have?” The answer to that question will set the tone for the audit and spark conversations that can lead to new ideas or possibilities that benefit the audit process and your team's strength and operations. This is your time to speak up! As an auditor, I want my clients to voice their concerns now so that they can be addressed before they become an issue.

Now is the perfect time to tell us if there are controls you feel could use some tightening or if there are certain accounts or programs you aren’t sure about. The pre-audit meeting is also the time to talk through positions or responsibilities that have changed within the business office or among the grant management staff. If the Board of School Directors, other Management, or maybe even outside parties have asked for additional information or reporting, you'll want to communicate that to us too.

Communication with the auditors is critical, especially if you have any new staff who may be experiencing their first audit. In my experience, reviewing the audit process and timeframe are especially helpful in ensuring the staff are fully prepared. It’s a good idea to let them know that they may be asked to meet one-on-one with the auditors to review their daily processes and procedures. Believe me: staff that aren’t prepared to meet with us feel like they’ve been called to the Principal’s office. I promise - we try not to be scary!

As an auditor, I understand that audits are often considered a necessary evil that must be dealt with, but I always want my clients to know that above all, I am here as a resource and a tool in their tool belt. Never hesitate to bring up concerns, and always let us know if there is something that you are expecting from the audit that you have not seen. Our firm is always on the lookout for ways that we can provide ideas or suggestions for improvement – these could be related to strengthening controls or even cost-saving measures. At the end of the day, our goal is simple: we want to make the audit as meaningful as possible for our clients.

As always, we encourage our clients to reach out at any time. If you're not currently an audit client of SEK's, we would love to be added to your bid list. We look forward to helping you achieve your goals!