Accounting Procedures Handbook

6 AUDIT I. OVERVIEW WCBOE experiences various audits on an ongoing basis. These include but are not necessarily limited to: • Annual Audits of Financial Statements and Federal Awards • Audits of Student Activity Accounts (Refer to Board Policy – Audit of Student Activity Accounts) • OLA (Office of Legislative Audits) Local School System Audits • State Audits conducted Bi-Annually by the MSDE (Maryland State Department of Education) • Other Audits (including but not limited to): IAC (Interagency Committee on School Construction) Audits Medicaid Audits State Retirement Agency Audits The Board’s Audit Committee is responsible for the selection of the external independent audit firm. Upon selection of the audit firm, the Business Support Services Department is primarily responsible for the coordination and preparation for external audits performed by external auditors/ CPAs, state auditors, etc. as well as for other audits highlighted above. In addition, although the WCBOE does not currently have an official Internal Audit function, the Finance Department performs its own select auditing procedures on a periodic / ongoing basis (e.g. on a sampling basis, auditing schools’ medical assistance billing for internal reporting, etc.). For information regarding requirements for Annual Audits of Financial Statements and Federal Awards, refer to the following: • COMAR 13A.02.07 Title 13A State Board of Education Subtitle 02 Local School Administration Chapter 7 Annual Audits of Financial Statements and Federal Awards For related information refer to the Uniform Grants Guidance, 200CFR. In addition, Statement on Auditing Standards (SAS) 99, Consideration of Fraud in a Financial Statement Audit, issued by the Auditing Standards Board, includes enhanced requirements for the external auditors in considering fraud in the planning and performance of their audits. SAS 99 defines fraud as “an intentional act that results in a material misstatement in financial statements that are the subject of an audit” and identifies two types of intentional misstatements: • Misstatement arising from fraudulent financial reporting; and • Misstatements arising from misappropriation of assets. Management through its design, implementation and ongoing maintenance of a sound