The School Board of Brevard County, Florida - Agenda
"Brevard Public School Audit Committee Overview. Explore the agenda set by The School Board of Brevard County, Florida for upcoming meetings and activities. Get insights and updates regarding educational matters in Brevard County."
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schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida Agenda I. Brevard Public School Audit Committee- Overview II. Audit Committee Members III. SBBC Financial Oversight IV. Reporting Structure V. BPS Audit Insight and Oversight VI. BPS Audit Procurement Process VII. BPS Internal Auditors VIII. BPS External Auditors IX. Internal Audit Implementation X. BPS Internal Audits XI FY 2022-23 Internal Audits Completed XII FY 2023-24 Internal Audits Completed XIII Corrective Actions & Remediation Status XIV 15-Year Look Back at Significant Audit Committee Activity XV 2023-24 Audit Committee Goals & Highlights XVI. Questions 1
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida I. Brevard Public School Audit Committee- Overview Audit Committees are utilized across the American Business and Public Sector Spectrum An Independent audit committee is defined by the Institute of Internal Auditors as: * A board-level committee made up of at least a majority of independent members * Responsible for providing oversight of management practices in key governance areas: Values and ethics. Governance structure. Risk management. Internal control framework. Audit activity. External assurance providers. Management action plans. Financial statements and public accountability reports. 2
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida I. Brevard Public School Audit Committee- Overview The Brevard Public School (BPS) Audit Committee was established in the late 1990 s The BPS Audit Committee s authorization to operate is provided via - School Board Policy 6700 Audit Committee and - School Board Policy 6705 Charter of Internal Audit The BPS Audit Committee Members: - Are community volunteers appointed (individually) by each School Board Member. - Have diverse backgrounds (Accounting, Legal, Senior Managers, Engineers, Project Leaders, Business Owners, etc.) - Are dedicated to improving Brevard Public Schools BPS Audit Committee has been and continues to be a Work-In-Progress (evolving through application of Continuous Improvement Methodology). The effectiveness of BPS is a direct reflection of the Appointing Authorities and the support provided by the entire BPS Leadership Team Kudos to Brevard Public School Board members in the selection of Audit Committee Members 3
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida II. Audit Committee Members Art Edwards, Chairman RetiredAerospace Corporate Safety Manager. Background includes Engineering, State of Florida Certified General Contractor, Project Management; Safety; Author Presently, Senior Partner in a Safety Consulting firm; President/CEO Edwards Media Group and writing a book chronicling African Americans at KSC; Committee member for over 15+ years. Nicole Colbert, Vice Chairman A Certified Public Accountant in the state of Florida, Mrs. Colbert worked in the audit division for EY and is now in private industry with a primary focus in construction/real estate development and financial advisory services. Committee member for 9 years. Don Lusk Priorexperience of 11 years as the Vice President of Operations for the Brevard Workforce Development Board, Inc. Presently a consultant with workforce boards around the country. Background includes Health & Human Services, Public Safety, Emergency Management and Community Service programs Committee member for 13 years. Jim Slate Accounting/Finance professional with 40 years experience, including Internal Audit and Compliance. Certified Public Accountant in the State of Florida. Committee member for 5 years. Jennifer Parrish Research / reconciliation background with over 15 years of experience in the real estate industry. Presently owning a private business in the community. Committee member for 1 year. Megan Wright Current School Board Chair and Ex-Officio Member of the Audit Committee 4
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida III. Reporting Structure Citizens of Brevard County School Board of Brevard County Audit Committee School Board Attorney Superintendent District Cabinet Internal & External Audits 5
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida AUDIT COMMITTEE EXTERNAL AUDITORS INTERNAL AUDITORS DISTRICT STAFF The Audit Committee Process Provides Collaborative BPS Financial Oversight working together to maintain and increase public confidence with the fiscal and administrative responsibilities of the School Board of Brevard County. 6
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida V. BPS Audit Insight and Oversight BPS Audit Committee BPS Internal Audits Insight and Oversight Florida Auditor General Insight BPS External Audits Insight/Limited Oversight -Independent Auditor -Audits BPS every 3 years -District Level Audits includes Financial, Operational, Compliance, IT, etc. - AG Entrance/Exit Conferences includes BPS Leadership and Audit Committee Chair -Written AG Report of Findings provided to the BPS Audit Committee -Independent, Objective, Systematic -Audits throughout the year at the District Level and at Functional Levels -Audits includes Financial, Operational, Compliance, IT, etc. -Evaluates effectiveness of Internal Controls; adequacy of Risk Management Tactics; adherence to financial & operational procedures; opportunities; operational improvements etc. -Respond to BPS requests for Special Assignments such as whistle-blower complaints; Fraud Investigation; etc. -Provides recommendations to address Audit Findings/Observations -Audit Follow-up per IA Standards - Quarterly Audit Committee Reports -Independent 3rd Party Auditors -Annual Audit of Financial Statements -District Level Audits -Issues a Report of Findings including: an Independent opinion of BPS financial performance and Financial Position; whether the Districts financial records are Fairly Stated , etc. -Verbal and written presentations to the BPS Audit Committee upon Audit Completion 7
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida VI. BPS Audit Procurement Process As a Process Improvement, in 2013 the Audit Committee collaborated with BPS Procurement in creating a rigorous Audit Procurement Process. The BPS Audit Procurement Process has been used for all auditor competitive solicitations subsequent to 2013 Based on Audit Procurement Process results, the Audit Committee makes Internal Auditor selection recommendations to the BPS School Board BPS School Board directs execution of Internal/External Auditor Contracts 8
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida VII. BPS Internal Auditors The Internal Auditors primarily performs at the direction of the BPS Audit Committee with the Exceptions of (1) Time Critical Audits & Special Investigations and (2) Special Audits & Special Investigations with a level of confidentiality not conferred on full the Audit Committee Note: The Authorizing BPS Entity (School Board Chair and or the Superintendent ) confers with the Audit Committee Chair on the need for Time Critical Audits & Special Investigations Current Internal Auditors RSM: Through competitive selection, RSM was selected as the District s Internal Auditor in 2018. A 3-year (Base) contract was awarded with three optional one-year extensions. Based on Audit Committee recommendation, the three optional one-year extensions have been exercised. RSM has provided 100% support of all planned and special Audits and has supported all Audit Committee meetings and requests The Audit Committee is collaborating with BPS Procurement and the BPS Finance Department in conducting the 2024 Internal Auditor Selection Process 9
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida VIII. BPS External Auditors The BPS External Audit Firm is tasked with the audit of BPS financial records to assess accuracy, completeness and adherence to the applicable accounting rules and regulations and Expressing An Opinion regarding conformity to professional standards External Auditors: Moore Stephens Lovelace, (MSL) P.A. Through competitive selection, in 2021 was selected as the District s External Auditor. A 3-year (Base) contract was awarded with four optional one-year extensions and provisions for MSL to work in conjunction with the AG on the 3-year Audits required by Florida Statue. This arrangement has proven to be beneficial to both BPS and to the Auditor General and provides consistency, continuity, and efficiency in the BPS performance as documented in the year-to-year CAFR MSL has provided 100% support of all Audit Committee meetings In 2023 MSL has issued an Unmodified Opinion Audit for BPS. The Audit Committee assesses the external auditor performance annually and provides feedback as needed. 10
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida IX. Audit Committee Florida Auditor General Interface Florida Statute 218.39, directs the Office of the Auditor General (AG) of the State of Florida to conduct targeted periodic Financial & Operational Audits and to conduct a scheduled Three-Year Audit. The BPS Finance Department keep the Audit Committee apprised of Florida Auditor General Audits and involve the Audit Committee Chair in the AG Pre-audit and Post-Audit briefings (allowing the Audit Committee to maintain awareness of issues and concerns with possible BPS Internal Audit Committee impacts). The Audit Committee, Internal Auditors and the BPS Finance Department are working collaboratively in improving BPS Finance Operations based on AG Audit findings during the Audit of other Florida Districts. 11
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida As an internal audit function develops and matures, the various types of audits performed will move through a lifecycle of the control environment in order to not only strengthen and enhance processes and controls, but also to facilitate strategy, decision-making and long-term planning. The various types of audits that are proposed have included a hybrid mix of audit types, as shown below.
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida XI. Internal Audit Implementation Functions with High Exposure and High Priority are included in the audit plan these are areas that keep senior leadership and the Board awake at night . Moderate Moderate Exposure Exposure High Exposure High Exposure Risk Impact Risk Impact Risk Coverage Risk Coverage Periodic Risk Coverage Risk Coverage High priority Low Exposure Low Exposure Moderate Moderate Exposure Exposure Risk Coverage Risk Coverage Self-assessment/ rotational Risk Coverage Risk Coverage Monitoring only Likelihood of Occurrence Likelihood of Occurrence 13
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida Internal Audit Universe See handout 14
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida XII. BPS Internal Audits Follow-up Audits District-Wide Audits Individual Function Audits Cycle Audits Additional Internal Audit Projects 15
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida Follow-up Audits Follow-up audits are required by the Institute of Internal Auditors International Standards for the Professional Practice of Internal Auditing (Performance Standard #2500). Follow-up audits objectives are to determine if: - Open issues from previous audit reports have been properly remediated - Management actions have either been effectively implemented OR Senior management has accepted the risk of not taking action Follow-up audits validate (on a sample basis) the effectiveness of remediated controls of previously reported open issues. 16
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida District-Wide Audits District-wide audits address processes and/or functions that: - Touch all District departments or - Touch most departments within the District District-wide audits are designed to gain economies of scale by: - Taking a District-wide view - Evaluating the implementation of policies, procedures, and standards as well as Best Practices across the District as a whole For Example: A district-wide audit of Purchasing Cards (P-Cards) will focus on the overall process for the District, including Purchasing Cards issued to all schools and departments. 17
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida Individual Function Audits Individual Function audits typically focus on unique scenarios or processes within a specific department. Individual Function audits may also focus on unique scenarios or processes within several departments (but not target all departments in the District). For example: A Purchasing Card (P-Card) audit of Food Services would focus on the risks and controls for transactions related only to Food Services But the P-Card audit many also expanded to include one or more additional areas based on perceived risks. 18
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida Cycle Audits Cycle Audits are narrower in scope than District-wide and Individual Function audits. Cycle Audit scope are typically very specific to inherently high-risk, decentralized functions and processes. Cycle Audits provide testing and reassurance that within different departments Policies and Procedures are being followed. Cycle Audits test the effectiveness of Controls: - Have Controls been appropriately designed and implemented? - Are the Controls effective or are there potential gaps in design? For example: Property Control has been audited on a cyclic basis and attention has been paid to high-risk sites. 19
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida Additional Internal Audit Projects Internal Audit Projects focuses internal audit resources on areas or functions that are (1) high exposure and (2) high priority based on Risk Ranking. Internal Audit Projects address situations/potential situations (outside of the existing audit plan) that the Board, Audit Committee or Management may become aware of. Internal Audit Special Projects and Requests are generally specifically defined and narrowly focused. For example: Previous Special Audits such as the 2016 BPS Transportation Department and the 2023 BPS Discipline Audit 20
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida XI FY 2022-23 Internal Audits Completed Follow-up Additional Audit Projects: Internal Accounts FY 2022 Overall Follow Up Risk Assessment District-Wide: Timekeeping Cycle Audit Students Discipline Individual: Half Cent Sales Surtax Round 14 Half Cent Sales Surtax Round 15 Completed In progress Not yet started 21
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida XII FY 2023-24 Internal Audits Completed Follow-up Additional Audit Projects: Internal Accounts FY 2023 Overall Follow Up Student Discipline Follow Up (Phase 1) District-Wide: IT General Controls Assessment Individual: Half Cent Sales Surtax Round 16 Half Cent Sales Surtax Round 17 Internal Accounts FY 2024 Completed In progress Not yet started 22
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida XIII Corrective Actions & Remediation Status 205 audits completed since inception of Audit Committee in FY2000: 40 Cycle Audits 46 District-Wide Audits 87 Individual Audits covering significant High-Risk Areas including Internal Accounts 34 Additional Audit Projects Follow-up procedures are conducted and reported to the Audit Committee. 405 total corrective actions have been reported since the inception of Audit Committee. 98% of total corrective actions have been validated and closed through the Formal Follow-up Process. Significant improvements have been gained through sharing of Lessons Learned & Best Practices across the District. 23
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida XIV 15-Year Look Back at Significant Audit Committee Activity Since it s inception over 20 years ago, the BPS Audit Committee has been a Work-In-Progress (evolving through application of Continuous Improvement Methodology). Several Florida School Districts have benchmarked the Brevard Public School System Audit Committee Approach The Audit Committee created a comprehensive process for developing an Annual BPS Audit Plan (with provisions to project, plan and prioritize annual audits). The Audit Committee created a new Committee Member Onboarding Process . The Audit Committee worked collaboratively with the District in the Application Process for the 2007 Florida Governors Sterling Award Recognition. The BPS Audit Committee Process was a prominent item in the successful 2007 submission. As part of the Audit Committee s Due Diligence language has been added to internal and external auditor contracts to ensure a credible Succession Plan is in place for key personnel supporting BPS Audit Functions. 24
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida XIV 15 Year Look Back at Significant Audit Committee Activity Annual half day workshop and training has been developed to ensure Audit Committee Members are sufficiently trained for their roles and to ensure awareness of Sunshine Laws. Action Item Tracking Process (including the Action Item Parking Lot) has been created to ensure awareness/timely completion of Action Items. Improved Bookkeeper Training and sharing of Lessons Learned and Best Practices has been driven through the Internal Audit Process. The Audit Committee has worked collaboratively with the District Procurement Department to create a robust RFP Procurement Process (used for hiring both Internal and External Auditors) Auditor Performance Evaluations have been created for conducting formal Annual Performance Evaluations for the Internal and External Auditors. 25
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida The School Board of Brevard County, Florida XV 2023-24 Audit Committee Goals & Highlights The last Audit Committee Annual Half Day Workshop and Training was conducted September 13, 2023. The next workshop is scheduled for October 2, 2024. Annual Internal Auditor Performance and External Auditor Annual Performance Evaluations are performed at the Annual Workshop. The Audit Committee continues to refine the Annual Evaluation Process The Audit Committee is working collaboratively with BPS Procurement and Accounting on RFP s for expiring Internal/External Audit contracts. Continued improvements in the Audit Committee s function has been achieved by identifying, prioritizing, and managing Action Items. Sensitivity continues to be maintained to Opportunities for Improvement . The Audit Committee completed 100% of 2023-4 Goals & Objectives. The Audit Committee is reviewing the Audit Committee Charter for Improvement Recommendations 26
schoolbd.gif (10287 bytes) schoolbd.gif (10287 bytes) The School Board of Brevard County, Florida Questions ? 27
