El Paso Independent
School District
2014-2015 Internal Audit Plan
Board of Managers Approved
! ! ! Page!1!of!2! Introduction* ! According!to!the!International!Standards!for!the!Professional!Practice!of!Internal!Auditing!(Standards)!and! the!Internal!Audit!Charter!(CFC!local),!the!Director!of!Internal!Audit!“…must!establish!a!riskBbased!audit! plan!to!determine!the!priorities!of!the!internal!audit!activity….”!The!audit!plan!establishes!the!framework! for!the!activity!of!the!El!Paso!Independent!School!District’s!(EPISD)!Internal!Audit!Department!(IAD).! ! ! The!audit!plan!should!be!dynamic!and!flexible!to!ensure!Internal!Audit!can!be!responsive!to!changes!from! unforeseen! issues! and! events! during! the! year.! According! to! Standard! 2010! Planning,! the! Internal! Audit! Director! “…must! review! and! adjust! the! plan,! as! necessary,! in! response! to! changes! in! the! organization’s! business,!risks,!operations,!programs,!systems,!and!controls.”!Any!significant!changes!required!of!the!plan! will!be!presented!to!the!Board!for!approval.!! ! Scope*and*Objectives* ! The!audit!plan!covers!the!period!of!September!1,!2014!to!June!30,!2015.!Project!objectives!proposed!in!the! plan! are! in! general! terms.! The! specific! objective! of! each! audit! project! is! determined! by! the! detailed! assessment!of!relative!risks!for!the!project!at!the!time!the!project!is!initiated.!
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The! objective! of! IAD! is! to! assist! the! Board,! Superintendent,! and! staff! in! the! effective! discharge! of! their! duties!and!responsibilities!by!furnishing!them!with!objective!analysis,!appraisals,!and!recommendations.!! !
Responsibilities* !
The! IAD! Director! is! responsible! for! preparing! the! annual! audit! plan! and! submitting! it! to! the! Board! for! review!and!approval.!Periodic!updates!relating!to!project!status,!schedules!and!significant!interim!changes! will!also!be!communicated!and!submitted!for!approval,!if!necessary.!
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The*Role*of*Internal*Audit* !
The! IAD! provides! independent,! objective! assurance! and! consulting! services! designed! to! add! value! and! improve! the! District’s! operations.! It! helps! the! District! accomplish! its! objectives! by! bringing! a! systematic! and! disciplined! approach! to! evaluate! and! improve! the! effectiveness! of! risk! management,! control,! and! governance!processes.!!
Risk*and*Fraud*Risk*Assessment*Process* *
The! Risk! and! Fraud! Risk! Assessments! serve! as! the! primary! tools! used! by! Internal! Audit! to! develop! the! annual!audit!plan!since!they!will!help!us!identify!and!prioritize!the!potential!areas!of!high!risk,!so!that!focus! is!placed!on!the!auditable!units!of!greatest!significance.!!
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The!Risk!Assessment!process!consists!of!seeking!feedback!from!all!District!data/process!owners!in!order! to:! (1)! identify! the! audit! universe,! (2)! measure! the! risk! associated! with! each! auditable! unit! in! the! Audit! Universe,!(3)!compile!and!analyze!the!results,!and!(4)!initiate!discussions!with!department!heads!on!how! these! risks! should! be! addressed.! The! “Audit! Universe”! is! made! up! of! the! key! processes! or! functional! activities!that!are!deemed!to!be!auditable!units!of!the!District.!!
2014B2015!Internal!Audit!Plan!! ! ! Page!2!of!2!!
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For!the!2013!risk!assessment,!risk!associated!with!the!auditable!units!was!measured!using!a!scale!of!1!to!5! for!five!key!risk!factors:!internal!controls,!financial!impact,!change!in!management/structure,!processes!or! priorities,!regulatory!compliance,!and!complexity!of!monitoring!activities.!! !To! perform! the! Fraud! Risk! Assessment! we! used! a! tool! developed! by! the! Association! for! Certified! Fraud! Examiners!(ACFE)!and!customized!it!to!fit!the!needs!of!the!District.!Fraud!examiners!use!the!ACFE’s!Fraud! Risk!Assessment!(FRA)!tool!to!identify!an!organization’s!vulnerabilities!to!fraud.!The!we!used!the!FRA!tool! to!develop!questionnaires!and!sent!these!to!employees!from!various!positions!and!locations!in!order!to!(i)! solicit!input!from!employees!to!gather!their!impressions!of!factors!that!contribute!to!fraud!risk,!(ii)!inquire! with! dataBprocess! owners! whether! controls! and! best! practices! are! in! place! in! the! various! areas! of! the! District,!and!(iii)!provide!evidence!of!a!proactive!environment!by!administration!to!bring!to!the!forefront! and! discuss! this! sensitive! subject.! Internal! Audit! evaluated! responses! to! the! FRA! tool! questionnaires! for! potential! risks! for! fraud! and! to! identify! areas! where! policies,! procedures,! or! internal! controls! could! be! strengthened.!
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Developing*the*Internal*Audit*Plan* !
In! developing! the! annual! riskBbased! audit! plan,! we! reviewed! highBrisk! areas! identified! during! the! 2014! Fraud!Risk!Assessment!and!2013!DistrictBwide!Risk!Assessment.!We!also!considered!auditable!activities!for! which!(i)!risks!were!discovered!during!the!performance!of!our!audits!or!(ii)!identified!by!management!as! an!area!of!concern.!!
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We!met!with!the!District’s!external!auditors!to!discuss!areas!of!concern!or!highBrisk!they!have!identified.! Consistent! with! our! audit! planning! process,! audit! approach,! and! industry! practices,! we! also! met! with! District!leadership!to!identify!potential!internal!audit!plan!projects.!!
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The!IAD!Interim!Director!reached!out!to!the!individual!Board!of!Managers!to!obtain!their!input!on!District! areas!of!concern!they!have!and!discuss!potential!audit!projects.!!
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Because! we! are! confronted! with! virtually! unlimited! potential! projects! with! limited! resources,! it! is! important!that!we!determine!the!staff!(chargeable)!hours!available!to!carry!out!the!plan.!The!audit!hours! available! were! calculated! by! multiplying! the! number! of! days! on! duty! times! eight! hours! per! fullBtime! equivalent.! After! deducting! the! estimated! hours! associated! with! sick/personal! leave,! staff! development,! and!administrative!tasks,!we!arrived!at!the!chargeable!hours!available!for!audit/project!purposes.!Please! refer!to!Attachment!C!for!the!calculation!of!chargeable!hours.!! ! Recommended*Audit*Plan*Activities* ! The!projects!included!in!the!audit!plan!were!those!identified!as!highBrisk,!identified!by!IAD!staff!as!high!risk! during!the!performance!of!our!work,!and!identified!by!the!Board!of!Managers!as!areas!of!interest/concern! during!the!Risk!Assessment.!In!addition!to!the!projects!selected!based!on!their!risk!status,!audit!hours!are! also! dedicated! to! followBup! reviews,! carryBforward! projects,! activities! required! or! recommended! as! best! practices!by!professional!Standards,!and!administrative!tasks!related!to!the!dayBtoBday!operations!of!the! department.!! ! The!list!of!proposed!projects,!with!scope!and!objectives,!is!included!as!Attachment!A.!The!projects!are!listed! in!alphabetical!order!and!are!followed!by!other!services!to!be!provided.!The!planned!timing!of!the!projects! and!services!by!quarter!with!hours!allocated!is!included!as!Attachment!B.!! !
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Pr oj ec t! Ob je ct iv e( s) ! Se le ct ion !C ri te ri a! ! ! Pr epa re d! by !the !Int er na l!A udi t!D epa rt m ent !! Pa ge !1 !of !4 ! Ap pr ov ed !b y! Bo ar d! of !M an ag er s! on !Au gu st !1 9, !2 01 4! 1! As se t!M an ag em en t! Con ve rs ion !H! Con su lt in g! Eng ag em ent ! Pr ov ide !c ons ul ti ng !s er vi ce s! re la te d! to !t he !a ss et !m ana ge m ent !c onv er si on! (t o! TEA M S) !t o! pr ov id e! as sur anc e! on! int er na l! co nt ro ls !t o! ad m ini st ra ti on! and !t he ! Bo ar d. !Au di to rs !c an !b ri ng !c on si de ra bl e! va lu e! to !a n! org an iz at io n! by !p ro vi di ng ! co ns ul ti ng !s er vi ce s! to !t he !I T !a nd !o rg an iza ti on al !a sp ect s! of !s ys te m !co nv er si on ! pr oj ec ts .! ! Id en ti fi ed a s hi gh -ri sk f or fr au d du ri ng th e 20 14 F ra ud Ri sk A ss es sm en t. ! 2! At te nd an ce !Au di ts ! Re vi ew ,!e va lu at e, !te st !th e! ac cu ra cy ,!a nd !d et er m in e! th e! ad eq ua cy !o f!a tt en da nc e! re co rd s! an d! st ud en t!a bse nc es! re po rt in g. !T he !sc op e! w ou ld !in cl ud e! el em en ta ry ,! mi dd le ,!a nd !h ig h! sc ho ol !c amp us es .!! ! Id en ti fi ed a s an a re a of co ncer n du ri ng o ur co ll ect io n an d rev iew o f Au st in HS a tt en da nc e re co rd s re qu es te d by a la w en fo rcem en t ag en cy . ! 3! Ca m pu s! Ac co un ti ng !Au di t!! Th e! obj ec ti ve !w ill !be !t o! id ent if y! and !a ud it !t he !a ct iv it ie s, !pe rf or m ed !by !C am pus ! Ac co un ti ng !s ta ff ,!t o! su pp or t! ca m pu s! pe rs on ne l! w it h! th e! pr oc es si ng ,!h an dl in g, ! ac cou nt in g, !an d! m on it or in g! of !C am pu s! an d! St ud ent !A ct iv it y! Fund! (A ct iv it y! Fu nd) !t ran sac ti on s. !I de nt if y! op por tu ni ti es !t o! im pr ove !i nt er nal !c on tr ol s! an d! mi ti ga te !r is ks .!! ! Pr oj ec t r ol le d fo rw ar d fr om th e 2 01 3-2014 pl an. Ca m pu s A ct iv it y F un ds w er e id en tif ie d a s h ig h-ri sk f or fr au d du ri ng th e 20 14 F ra ud Ri sk A ss es sm ent . ! 4! Ca m pu s! A ct iv it y! Fu nd! A udi ts ! Re vi ew !a nd !t es t! ca m pu s! an d! st ud en t! ac ti vi ty !f un d! tr an sa ct io ns !t o! de te rm in e! wh et he r! th ey !a re !p ro ce ss ed /r ec or de d! in !a cc or da nc e! wi th !f ed er al ,! st at e! an d! lo ca l! re qu ir em en ts .!! Th e F in an ci al A cc ou nt ab il it y S ys te m R es our ce G ui de s ta te s th at re sp on sib ility f or a ctiv ity f un ds in vo lv es in te rn al au dito rs w ho o fte n co nd uc t an nu al o r per io di c au di ts o f su ch f un ds as d eem ed ap pr op ri at e. ! !! Id en ti fi ed a s hi gh -ri sk f or fr au d du ri ng th e 20 14 F ra ud Ri sk A ss es sm en t. ! 5! Cr edi t!R ec over y! Au di t!F ol lo w Hup ! Ev al ua te ! th e! ad eq ua cy ,! ef fe ct iv ene ss ,! and ! ti m el ine ss ! of ! ac ti ons ! ta ke n! by ! ma na ge me nt !o n! re po rt ed !o bs er va ti on s! an d! re co mme nd at io ns !r el at ed !t o! th e! Cr edi t!R ec ov er y! A udi t!p er for m ed! du ri ng !the !2013 H2014! ye ar .!! ! Fol low Hup! A ud it ! 6! Fe de ral !E du ca ti on ! Pr og ra m !D at a! Au di t!a nd !F ol lo w H up! ! ! Th e! obj ec ti ve !w ill !be !t o! de te rm ine !t he !a de qua cy !o f! th e! int er na l! co nt ro ls !a nd ! th e! in te gr ity !o f!th e! fi na nc ia l!a nd !p er fo rm an ce !fe de ra l!e du ca ti on !p ro gr am !d ata .! (U SD E! re co m m en de d) ! Fol low Hup! A ud it !!
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Pr oj ec t! Ob je ct iv e( s) ! Se le ct ion !C ri te ri a! ! ! Pr epa re d! by !the !Int er na l!A udi t!D epa rt m ent !! Pa ge !2 !of !4 ! Ap pr ov ed !b y! Bo ar d! of !M an ag er s! on !Au gu st !1 9, !2 01 4! 7! For ei gn !Cr edi ts ! Au di t!F ol lo w Hup ! Ev al ua te ! th e! ad eq ua cy ,! ef fe ct iv ene ss ,! and ! ti m el ine ss ! of ! ac ti ons ! ta ke n! by ! ma na ge me nt !o n! re po rt ed !o bs er va ti on s! an d! re co mme nd at io ns !r el at ed !t o! th e! For ei gn !Cr edi ts !A udi t!p er for m ed! du ri ng! the !2013 H2014! ye ar .!! ! Fol low Hup! A ud it !! 8! Gr ad e! an d! Gr ad eH le vel !C ha ng es !A ud it ! Fol low Hup! ! Ev al ua te ! th e! ad eq ua cy ,! ef fe ct iv ene ss ,! and ! ti m el ine ss ! of ! ac ti ons ! ta ke n! by ! ma na ge me nt !o n! re po rt ed !o bs er va ti on s! an d! re co mme nd at io ns !r el at ed !t o! th e! Gr ad e! an d! Gr ad eH le ve l!C ha ng es !A ud it !p er fo rm ed !d ur in g! th e! 20 13 H2014! ye ar .!! ! Fol low Hup !Au di t!! 9! Hi ri ng !P ro ce ss ! Au di t!! ! Do cu m en t!a nd !a ss es s! th e! ad eq ua cy !a nd !e ff ec ti ve ne ss !o f!t he !h ir in g! pr oc es s! an d! re la te d! in te rn al !c on tro ls! th at !w ill !p ro vi de !re aso na bl e! assu ra nc e! th e! D ist ri ct ! em pl oys !th e! bes t!q ua lif ied !jo b! ap pl ic an ts !w hi le! co m pl yi ng !w it h! va ri ou s! fe de ral ,! st at e, !a nd !lo ca l!l aw s! an d! re gu la ti on s. !! !Ide
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! 10 ! Qu al it y! A ss ur an ce ! an d! Im pr ove m en t! Pr og ra m !H! De ve lo pm en t!a nd ! Im pl em en ta ti on ! De ve lo p! an d! im pl em en t!a !s tr on g! Q ua lit y! As su ra nc e! an d! Im pr ov em en t!p rogr am ! th at! in cl ud es ! de ve lo pi ng ! pr oc es se s, ! pr oc ed ur es ,! an d! po lic ie s! to ! en su re ! co m pl ia nce !w it h! pr of es si on al !s ta nd ar ds !a nd !lo ca l!p ol icy !r eq ui re m en ts .!! ! Qu al it y! as su ra nc e! is ! an ! im po rt an t! co m po ne nt ! in ! pr ov id in g! hi gh ! qu al it y! au di ti ng! se rvi ce s, ! en su ri ng! com pl ian ce! w it h! pr of es si on al ! st an da rd s, ! an d! pr epa ri ng !fo r! an! ex te rna l!q ua lit y! as sur anc e! re vi ew .! Re qu ir ed b y th e In te rn at io na l S ta nd ard s fo r th e P ro fe ss io na l P ra ctic e o f In te rn al A ud it in g (S ta nd ard s). ! 11 ! Ri sk !As se ss m en t! Id en ti fy ,! m ea su re ,! an d! pr io ri ti ze !r is ks !i n! th e! di str ic t! in !o rd er !to !(i )! br in g! aw ar en es s! of !t he !r is ks !in !t he !var iou s! ar eas !of !t he !d is tr ic t,! an d! (i i) !for m !a! bas is ! fo r! de te rm in in g! ho w !th es e! ris ks !s ho uld !b e! m an ag ed .!! ! Us ed to e st ab li sh th e ri sk -ba se d audi t pl ans r equi re d by the IIA St an da rd ). ! 12 ! St ud en t!H ig h! Fai lu re !R at e! A udi t! ! As su re !c om pl ia nc e! to !d is tr ic t! po lic y, !f ed er al !a nd !s ta te !l aw s! an d! pr og ra m ! fu nd in g! ex pe ct at io ns !in te nd ed !to !p re ve nt !s tu de nt s' !a ca de m ic !fa ilu re .!!Ide
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! 13 ! St ud en t/T eac he r! Cl as sr oom !R at ios ! Au di ts ! Pr ov ide !a ss ur anc e! to !t he !B oa rd! on! the !a cc ur ac y! of !s tude nt !t o! te ac he r! ra ti os ! (c la ss ! lo ad s)! pro vi de d! by ! ad m in is tra ti on .! T hi s! in cl ud es ! re vi ew in g! th e! da ta /m et hodol og y! us ed! by !a dm ini st ra ti on! to! ca lc ul at e! ra ti os !a nd! condu ct ing ! si te !v isi ts! to !v al id at e! th e! ra tio /t ea ch er !c la ss !lo ad s! da ta .!! !Ide
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Pr oj ec t! Ob je ct iv e( s) ! Se le ct ion !C ri te ri a! ! ! Pr epa re d! by !the !Int er na l!A udi t!D epa rt m ent !! Pa ge !3 !of !4 ! Ap pr ov ed !b y! Bo ar d! of !M an ag er s! on !Au gu st !1 9, !2 01 4! 14 ! TEA M S! Pa yr ol l! Au di t! As se ss !a nd !t es t! th e! ad eq ua cy !a nd !e ff ec ti ve ne ss !o f! th e! in te rn al !c on tr ol s! of !t he ! TEA M S! Pa yr ol l!s ys te m !a nd !c om pl ia nc e! w it h! D is tr ic t!p ol ic ie s! an d! pr oc edu re s. !! ! Pa yr ol l i ss ue s w er e id en tif ie d a s h ig h-ri sk d uri ng th e 2 01 3 R is k A ss es sm en t an d as an ar ea of co ncer n by ad m in is tr at io n. ! 15 ! TEA M S! U se r! A cc es s! Ma na ge me nt !A ud it ! Th e! obj ec ti ve !o f! th e! aud it !w as !t o! pr ov id e! as sur anc e! th at !c ont ro ls !a re !in !p la ce ! an d! w or ki ng! as !in te nd ed !t o! en su re !t hat !u se r! ac ce ss !ad m in is tr at ion !is !m an age d! an d! m on it or ed ,! in cl ud in g! con tr ol s! ove r! pr ivi le ge d! ac ce ss ! for ! th e! T E A M S! Hu m an !R es ou rc es !m od ul e. ! ! Id en ti fi ed a s hi gh -ri sk f or fr au d du ri ng th e 20 14 F ra ud Ri sk A ss es sm en t. ! ! Oth er !P ot en ti al !P ro je ct !R el at ed !A ct iv it ie s: ! Pr oj ec t! Ob je ct iv e( s) ! ! 16 ! Cor re ct iv e! A ct ion ! Pl ans !F ol lo w HUp ! Pe ri odi ca lly ,!a dm ini st ra ti ve !s ta ff !w ill !be !r eque st ed! to !c om m uni ca te !in! w ri ti ng !t he !s ta tus !o f! im pl em ent at io n! of ! co rr ect iv e! act io ns !( in !r es po ns e! to !a ud it! re po rts ). !!In te rn al !a ud it! re po rts !th e! sta tu s! of !p as t!d ue !c or re cti ve !a cti on ! pl ans !to !th e! B oa rd !o n! a! m ont hl y! ba si s. !! ! 17 ! Con su lt in g! Se rvi ce s! Con su lt in g! se rv ic es !m ay !in cl ude !p ar ti ci pa ti ng !in !v ar iou s! te am !m ee ti ng s, !w or kg rou ps ,!or !c om m it te es !w it hi n! the ! Di st ric t! to !s er ve !in !a n! ad vis or y! ca pa cit y! to !p ro vid e! m an ag em en t! w it h! te ch nic al !a ss is ta nc e! in !a !v ar ie ty !o f!a re as ,! an d! se rve !as !an !avai lab le !r es ou rc e! on !r is kH re la te d! issu es. !! ! A!si ng le !c on su lt in g! pr oj ec t!t ha t!i s! ex pe ct ed !to !e xc ee d! ei gh t!h ou rs !w ill !b e! ev al ua te d! to !de te rm ine !w he the r! it !c an! be !i nc lud ed !i n! th e! co nt ing enc y! ca te go ry !o r! w he th er !i t! ne ed s! to !be !s ubm it te d! to !t he !B oa rd !f or !r ev ie w !a nd ! ap pr oval .!! ! 18 ! Con ti ng en cy ! Ho ur s! ! Con ti ng en cy !hou rs !a re !n ee de d! to! en su re !t he !r is kH ba se d! aud it !pl an! is !f le xi bl e! and !r es po ns iv e! to !c ha ng e! fr om ! unf or es ee n! is sue s! and !e ve nt s! dur ing !th e! ye ar .!Th is !m ay !inc lud e: ! 1. !Fa ci lit at ing !e xt er na l!a udi ts !c ondu ct ed! by !e xt er na l!a udi tor s, !T E A ,!U SD E ,!or !ot he r! ag enc ie s, !! 2. !Coor di na ti ng !r equ es ts !for !inf or m at ion/ doc um ent at ion! fr om !e xt er na l!or !la w !e nf or ce m en t!a ge nci es ,!! 3. !Fol low Hup! on! co nc er ns !o f!h ig h! ri sk! or !int er na l!c ont ro ls !d ef ic ie nc ie s. ! ! 19 ! Et hi cs a nd Co m pl ia nc e Ho tl in e In a cc ord an ce w it h pro fe ss io na l st an da rd s an d re la te d pra ct ic e gu id es , In te rn al A ud it sh ou ld m ai nt ai n an a ct iv e ro le th at re la te s to b oth p ro m otin g an d as se ss in g eth ic s th ro ug ho ut th e D is tr ic t. T his r ole m ay in clu de h os tin g th e Di st ri ct ’s E th ic s an d C om pl ia nc e Ho tl in e an d co nd uc ti ng f ra ud in ve st ig at io ns .!
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Pr oj ec t! Ob je ct iv e( s) ! Se le ct ion !C ri te ri a! ! ! Pr epa re d! by !the !Int er na l!A udi t!D epa rt m ent !! Pa ge !4 !of !4 ! Ap pr ov ed !b y! Bo ar d! of !M an ag er s! on !Au gu st !1 9, !2 01 4! Et hi cs a nd Co m pl ia nc e Ho tl in e (c on ti nu ed ) ! Ho ur s ar e se t as id e fo r m on it or in g in cid en t re po rts r ec eiv ed th ro ug h th e E th ic s an d C om plia nc e H otlin e. M on ito rin g in clu de s re vie w in g, dis tr ib utin g, an d tr ac kin g th e sta tu s of c on ce rn s re po rte d th ro ug h th e ho tlin e an d fo rw ar de d to da ta /pr oc es s ow ne rs f or f ol low -up. M ont hl y st at us r epor ts a re p ro vi de d to th e B oa rd a nd S up eri nt en de nt . Ho ur s we re a ls o al lo ca te d fo r In te rn al Au di t st af f to ( i) f ol lo w -up on al le ga ti ons of a ll ege d fr aud or s igni fi ca nt non -co m pl ian ce an d (i i) a fr au d in ves ti gat io n, if d eem ed n eces sar y. ! ! Ad m in is tr at iv e! an d !P ro fe ss io n al! D ev elo p m en t! Pr oj ec t! Ob je ct iv e( s) ! ! 20 ! Ad m in is tr at iv e! De pa rt m en t! Du ti es !! Ad m in is tr at iv e! ac ti vi ti es !in cl ud es :! St rat egi cH le ve l! ac ti vi ti es !s uc h! as !d ev elo pi ng !t he !a nn ua l! au di t! pla n, !r ev ie w in g! st aff! co m pe te nc y! ne ed s, !a nd ! pl anni ng !fo r! st af f!d ev el opm ent !an d! hi ri ng. !! ! Op er at io na l! ac ti vi ti es !i nv ol vi ng !d es ig ni ng !s tr uc tu re s! an d! pr oc es se s! ai m ed !a ch ie vi ng !I nt er na l! A ud it !a ct iv it y! ob je ct ive s! an d! ove ral l!goal s! of !e ff ic ie nc y! an d! ef fe ct ive ne ss .!T hi s! in cl ude s! as si gn in g! au di tor s! to! sp ec if ic !p roj ec ts ! an d! al loc at in g/t ra ck in g! ti m e! fo r! en ga ge m en t! act iv it ie s. !T he !m an y! ta sk s! in vo lv ed !i n! le ad in g! In te rn al !A ud it !t o! in cl ud e! co m m un ic at io n! w it hin !t he !D is tr ic t! an d! w it h! ex te rn al !a ud it or s/ en tit ie s, !in te rv ie w in g! an d! hir in g! ne w ! st af f! m em be rs, !st af f! ap pra isa ls. !E nsu ri ng !I nt ern al !A ud it !s ta ff !f ol lo w !p ol ic ie s! an d! pr oc ed ur es ,!m on ito ri ng !th e! de pa rt m ent ’s !b udg et ,!a nd! pr oc es si ng !p ay rol l!a nd! pu rc ha se !or de rs .!! ! 21 ! Con ti nu in g! Pr of es si ona l! De ve lo pm en t! Pa rt ic ipa te !in! va ri ous !ins tr uc to rH le d! or !o nH lin e! co ur se s! in !s ub je ct s! di re ct ly !r ela te d! to !g ov er nm ent !a udi ti ng ,!t he ! In sti tu te !o f! In te rn al !A ud ito rs !g ui da nc e, !o r! sp ec if ic /u ni qu e! lo ca l! ed uc ati on !a ge nc y! re qu ir em en ts !i n! or de r! to ! au di tor ’s !p rof es si on al !p rof ic ie nc y! an d! m ee t!c on ti nu in g! pr of es si on al !e du cat ion !r eq ui re m en ts .!! ! Ho ur s! fo r! st af f! to !p ar ti ci pa te !a s! m em be rs !o f! pr of es si ona l! or ga ni za ti ons ,! inc lud ing !t he !l oc al !c ha pt er s! of !t he ! In sti tu te !o f!In te rn al !A ud ito rs !a nd !T ex as !A ss oc ia ti on !o f!S ch oo l!B us in es s! O ff ic ia ls .!! ! !Internal Audit Activities
3
3
3
3
Assurance Services
1,935
61%
Campus Activity Funds
378
Federal Education Program Data
Financial and Performance Review (roll
over from FY2014)
739
Student High Failure Rate Audit
380
Student/Teacher Classroom Ratios
Audit
397
TEAMS User Access Management
41
Consulting Services
60
2%
Asset Management Conversion -
Consulting Engagement
22
Consulting Services
38
Follow-up Services
91
3%
Corrective Action Plan Follow-up
60
Grade and Grade-level Changes Audit
Follow-up
31
Other Audit Services
350
11%
Contingency
184
Ethics and Compliance Hotline
124
Risk Assessment
42
Required/Recommended by Standards
466
15%
Continuing Professional Development
336
Quality Assurance and Improvement
Program - Development and
Implementation
130
Administrative Duties
278
9%
3
3
3
3
Total Hours Scheduled
3,180
100%
Quarter 1
Attachment)B)
Page)2)of)4)
Internal Audit Activities
3
Assurance Services
Attendance Audits
Campus Accounting Audit
Campus Activity Funds
Hiring Process
Student High Failure Rate Audit
Student/Teacher Classroom Ratios
Audit
TEAMS Payroll Audit
TEAMS User Access Management
Consulting Services
Consulting Services
Follow-up Services
Corrective Action Plan Follow-up
Foreign Credits Audit Follow-up
Grade and Grade-level Changes Audit
Follow-up
Other Audit Services
Contingency
Ethics and Compliance Hotline
Risk Assessment
Required/Recommended by Standards
Continuing Professional Development
Quality Assurance and Improvement
Program - Development and
Implementation
Administrative Duties
3
Total Hours Scheduled
3
3
3
1,942
54%
245
315
340
71
140
387
108
336
48
1%
48
360
10%
112
177
71
581
16%
224
201
156
148
4%
64
84
541
15%
3
3
3
3,620
100%
Quarter 2
Attachment)B)
Internal Audit Activities
3
Assurance Services
Attendance Audits
Campus Accounting Audit
Campus Activity Funds
Federal Education Program Data
Financial and Performance Review (roll
over from FY2014)
Hiring Process
Student/Teacher Classroom Ratios
Audit
TEAMS Payroll Audit
TEAMS User Access Management
Consulting Services
Consulting Services
Follow-up Services
Corrective Action Plan Follow-up
Credit Recovery Audit Follow-up
Federal Education Program Data
Financial and Performance Review
Follow-up
Other Audit Services
Contingency
Ethics and Compliance Hotline
Required/Recommended by Standards
Continuing Professional Development
Quality Assurance and Improvement
Program - Development and
Implementation
Administrative Duties
3
Total Hours Scheduled
3
3
3
2,588
65%
527
10
384
66
255
565
729
52
48
1%
48
208
5%
22
87
99
469
12%
248
221
173
4%
62
111
474
12%
3
3
3
3,960
100%
Quarter 3
Attachment)B)
Page)3)of)4)Internal Audit Activities
3
Assurance Services
Campus Activity Funds
Federal Education Program Data
Financial and Performance Review (roll
over from FY2014)
Hiring Process
Student/Teacher Classroom Ratios
Audit
TEAMS Payroll Audit
Consulting Services
Consulting Services
Follow-up Services
Corrective Action Plan Follow-up
Credit Recovery Audit Follow-up
Federal Education Program Data
Financial and Performance Review
Follow-up
Other Audit Services
Contingency
Ethics and Compliance Hotline
Required/Recommended by Standards
Continuing Professional Development
Quality Assurance and Improvement
Program - Development and
Implementation
Administrative Duties
3
Total Hours Scheduled
3
3
3
988
65%
155
179
114
353
187
16
1%
16
96
6%
4
32
60
156
10%
74
82
58
4%
6
52
198
13%
3
3
3
1,512
100%
Quarter 4
Attachment)B)
Page)4)of)4)Attachment)C)
The)audit)plan)covers)the)period)of)September)1,)2014)to)June)30,)2015.)) ) The)audit)hours)available)were)calculated)by)multiplying)the)number)of)days)on)duty)times)eight) hours)per)fullDtime)equivalent,)then)deducting)the)estimated)hours)associated)with)sick/personal) leave.)) )! Days!on!duty! Professional)staff:)191)days)(9/01/14–6/30/14))x)8)hours)=)1,528)x)6)=) )9,168) Professional)vacancies:)147)days)(11/01/14–6/30/14))x)8)hours)=)1,176)x)2)=) )2,352) Hourly)staff:)))186)days)(9/01/14–6/30/14))x)8)hours)=1,488)x)1)=) ) )1,488) Total)hours)=) )))))))) ) ) ) ))))))))))))))))))))))))))13,008) ) Estimated!Sick/personal!leave! Staff)(>)3)years):)104)hours)x)4)=) ) ) ) )))416) Staff)(<)3)years):)))64)hour)x)5)(includes)2)vacancies))=) ) ) )))320) Total)sick/personal)leave)=) ) ) ) ) )))736) ) Audit!hours!available!=! ! ! ! !!!!!!!!!!!!!!!!!!!!!!!!12,272!Audit)Budget)Hours))
Activities)in)the)plan)include:) )!!!!!!!!Type!of!Service ! ! !Hours !Percent !!
! Assurance) ) ) ) )7,453 ))))61%) ! Consulting) ) ) ))) ))))172 ))))))1%) ! FollowDup ) ) ))) ))))755 ))))))6%) ! Other)audit)services ) ) )1,556 )))))13%) ! Required/recommended)by)professional)standards ))))845 )))))))7%) ! Administrative)activities ) ) )1,491 )))))12% )) Total!hours!allocated!= ! ! !12,272 !!!100%!
Audit!!
Services!
81%!
Page)2)of)4)El Paso Independent
School District
Page 1 of 2
B
ACKGROUNDRisk is a measure of uncertainty in terms of impact and likelihood. Risk is defined as the
“possibility of suffering harm or loss” and it impacts the District’s ability to accomplish its
mission, goals and objectives. A Risk Assessment is recognized as the preferred process for
identifying, measuring, and prioritizing risks based on their likelihood of occurrence and the
magnitude of impact.
The Risk Assessment serves as the primary tool used by Internal Audit to develop the annual
Audit Plan since it will help us identify and prioritize the potential areas of high risk, so that
focus is placed on the auditable units of greatest significance.
S
COPE ANDO
BJECTIVESThe scope and objectives were to identify, measure, and prioritize risks in the District in order to
(i) bring awareness of the risks in the various areas of the District and (ii) initiate discussions on
how to address the identified risks.
M
ETHODOLOGYThe “Audit Universe” is made up of the key processes or functional activities that are deemed to
be auditable units of the District. The audit universe is developed by first identifying the
operational areas of the District and then identifying the key processes or functional activities
within said areas. The risk associated with the auditable units is measured using a scale of 1 to 5
for each of the following five key risk factors:
(1) Internal controls - This factor measures the quality of the internal controls such as policies,
procedures and monitoring activities to address security of assets, segregation of duties, proper
approvals/authorizations, verifications/reconciliations, accuracy of data, etc. This evaluates
whether controls are in place and working effectively. This factor measures the likelihood of
occurrence.
(2) Financial impact - This considers the overall dollar amount flowing through or committed to
the unit/process from all funding sources (e.g. expenditures, grant amount, revenues
collected/earned). This evaluates the impact of inappropriate activity from a financial
perspective. This factor measures the impact risk.
(3) Change in management/structure, processes or priorities - This evaluates the extent of
changes in the unit and the impact of these on operations. These may include: (i) changes in
administration and/or key employees; (ii) changes in the structure of the department/process; (iii)
new activities/programs; (iv) new business processes; or (v) changes in the District's
priorities/goals. This factor measures the likelihood of occurrence.
(4) Regulatory compliance - This evaluates the complexity and volume of compliance
regulations from outside entities. This includes any potential financial or non-financial penalties.
This factor measures the impact risk.
(5) Complexity of monitoring activities - This factor considers the locations/number of locations
where activities and the monitoring of these activities take place. This factor measures the
likelihood of occurrence.
Page 2 of 2
After we compiled and analyzed the results, auditable units were categorized based on the risk
scores. We measured the likelihood of the occurrence based on the total scores for factors 1, 3,
and 5 above as follows:
Risk Score of 12 to 15 = High Risk
Risk Score of 9 to 11= Medium Risk
Risk Score of 1 to 10 = Low Risk
We measured the risk impact based on the total scores for factors 2 and 4 (above) as follows:
Risk Score of 8 to 10 = High Risk
Risk Score of 6 to 7= Medium Risk
Risk Score of 1 to 5 = Low Risk
For auditable units with a risk score of high likelihood of occurrence and high to medium impact,
we inquired with the respective data owner(s) to determine how they would mitigate the risks for
these units.
S
UMMARYExhibit A provides the list of auditable units with a risk score of high likelihood and high to
medium impact and the manner in which the risk will be addressed. The complete results of the
Risk Assessment are presented in Exhibit B.
Exhibit A
Risk Score
Auditable Unit
Mitigating Risk by:
Page 1 of 2!
High Likelihood/ High Impact
Program Access (OCR) – CTE TEA conducted a review during the 2013 school year. The District is working on the Corrective Action Plan (CAP) to address findings identified. High Likelihood/
High Impact
Financial Services - GL to Payroll Journal Reconciliation
This entails administrative duties that should not be performed by IA staff. Data process owner will continue to monitor. IA staff will be available to provide consulting services such as testing controls in TEAMS.
High Likelihood/ High Impact
Federal Education Program Financial and Performance Data
A project was proposed for the 2013-2014 Internal Audit Plan. This project is part of the corrective action recommended in the USDE report.
High Likelihood/ Medium Impact
Advanced Academic Services GT Compliance Student Records - includes PEIMS data quality issues
IA project performed and data owner
implemented a CAP during the last two years. Data owner will continue to monitor risk and determine whether additional help is needed from IA for the 2014-2015 school year.
High Likelihood/ Medium Impact
GT Training Requirements & Records
IA project performed and data owner
implemented a CAP less than three years ago. Data owner will continue to monitor risk and determine whether additional help is needed from IA for the 2014-2015 school year. Note that this is an area that is tested by external auditors during the District’s annual financial and compliance audit.
High Likelihood/ Medium Impact
Pre-AP/AP Course & Examination Requirements
Data owner will monitor and revisit risk score during the next Risk Assessment.
High Likelihood/ Medium Impact
Special Populations - CTE LEP/SPED
TEA conducted a review during the 2013 school year. The District is working on the CAP to address findings identified.
High Likelihood/ Medium Impact
Grade and Grade-Level Changes
A project was proposed for the 2013-2014 Internal Audit Plan. This project is part of the corrective action recommended in the USDE report.
High Likelihood/ Medium Impact
Foreign Country Credits Process
A project was proposed for the 2013-2014 Internal Audit Plan. This project is part of the corrective action recommended in the USDE report.
High Likelihood/ Medium Impact
Student Leavers Review A project was proposed for the 2013-2014 Internal Audit Plan. This project is part of the corrective action recommended in the USDE report.
Exhibit A
Risk Score
Auditable Unit
Mitigating Risk by:
Page 2 of 2!
High Likelihood/ Medium Impact
Guidance Services Student Transcript Audits
Data owner requested assistance. Since IA has limited resources, this project will be considered when developing the 2014-2015 plan.
High Likelihood/ Medium Impact
Credit Recovery - Excessive Absences
A project was proposed for the 2013-2014 Internal Audit Plan
High Likelihood/ Medium Impact
Wage and Hour A project was proposed for the 2013-2014
