Here are five tips to consider when planning for your year-end close and preparing for the audit, while managing remote work teams.
A school district’s year-end close process is a critical step in having a successful audit. This year promises to be especially challenging, as districts confront the uncertainty of school closures, reduced staffing in the Business Office, remote workers and planning for the 2021 school year.
But it can and must be done. Here are five tips to consider when planning for your year-end close and preparing for the audit.
- Plan Ahead. A great way to start is to revisit your current year-end close process and checklist. Walking through prior year processes will help you anticipate new obstacles. Ask questions like:
- Are there reports that typically have been run at year end that may be delayed or we may have trouble generating?
- Are inventory counts going to be difficult at year end?
- Will there be an issue completing certain tasks if they involve other departments and/or working remotely?
- Are there steps that were manual or used hardcopies? Is there a way to perform the process electronically or obtain softcopies?
- Document changes to your review and approval processes in internal control process memorandums. If key processes such as payroll disbursements, cash disbursements, cash receipts, and journal entry preparation were performed remotely, parts of the process may have become more electronic, such as reviews and approvals. Make sure there is documentation on any new internal control processes as well as an audit trail that the process was followed.
- Consider financial impact of school closures on individual funds, such as the food service fund. Budget amendments or transfers may need to be approved by the Board before year end. During school closures, the food service fund may have continued to incur payroll costs to provide free meals but lost revenue because students did not purchase food.
- Organize supporting documentation associated with costs incurred due to the District’s response to COVID-19.These costs could include but are not limited to:
- providing internet hotspots
- technology resources
- at-home learning costs
- training educators on delivering effective virtual instruction
- training and development costs on sanitation
- Supplies to sanitize and clean facilities
- Meet with your auditor. Have a conversation about what a remote audit would look like. Several firms have performed audits remotely under the current circumstances and learned lessons along the way. The Prepared by Client (PBC) list is a good document to go through and see what you provided as a hardcopy in previous years that could be provided electronically this year. Most documentation that is obtained and tested onsite can be uploaded to a secure portal.
There’s no doubt about it. This year, your district’s year-end close and audit will be unlike any other. The more you can prepare ahead of time, the better off you will be when the audit rolls around. And remember, you are not alone. If you have questions or need assistance, don’t be afraid to turn to your district’s audit professionals.