Guest Post by Jacob Gutnicki
“Audit” is a 5-letter word that sends shudders to many individuals both in the education and corporate world. A panic erupts, as the individual must quickly gather the required documentation in a short span of time.
Regrettably many schools, districts, and other educational organizations are ill prepared for the audit. This is because educators often feel that they are “too little to be noticed” or that only the “bad schools” get audited. Unfortunately, in this age of accountability the prospect of being audited has increased exponentially. With this in mind, the following are a few guidelines to consider:
1. Keep good records- Every purchase order should be printed (or documented electronically) and should include a copy of the invoice and related documentation. Related documentation may include Professional Development Agenda, Attendance Sheets for Professional Development, and a description of materials that are purchased. A good practice is to have an administrative assistant to create folders for each funding source or school month and create a backup copy of the relevant documentation.
2. Stay away from food; especially catered food- Auditors hate when schools purchase food; especially if it is for a social gathering. If you insist on purchasing food, make sure the food was purchased as part of a professional development gathering, and that you can include documentation to justify the purchase. It is also a good idea to use a contracted vendor for food purchases and make every effort to keep the cost of food inexpensive.
3. Stay away from hotels- Auditors will question why a school needed to hold a school based professional development outside of the school and incur an unnecessary cost. Obviously, major professional development initiatives sometimes call for the use of hotels. If you choose to expense the hotel on the school’s dime, prepare the appropriate justification and documentation to support this need.
4. Do not buy sanitary napkins or postage materials with professional development funds- Simply put, one cannot co-mingle professional development funds to cover other costs. For example, one should not purchase computers for the office with money that is slated to offer student tutorial services. A good rule of thumb is to review the intent of the funding source and use funds only for the expressed purpose. If you are unsure of the funding purpose check with your district or appropriate official.
5. Avoid Flashy Technology- In these austere times; auditors are suspicious of schools that purchase plasma screens and other high tech gizmos. If schools need to purchase these materials, they should have documentation that supports the need for the said equipment. For example, if a school wishes to purchase a television studio equipped with high end Avid equipment it should be mentioned explicitly in the grant application, the School Comprehensive Education Plan, or other relevant documents.
6. Always follow the grant’s intent- If a grant states that teachers will receive 20 days of professional development centered on the Common Core Standards, it is incumbent upon us to implement this plan. We should never view the grant as our personal piggy bank and spend the money as we please.
7. Good Payroll Records Matter- Payroll records should match the dollars that school personnel are paid. For example, if a pedagogue charges 20 hours to the school, the documented record should reflect this charge. Records should also include required approval signatures.
8. Know your equipment well- Auditors love to pull a laptop or a mobile device for an audit. Make sure that the laptop or mobile device is in a secure location. If it is in use, you should know its location. If the equipment is being used off-site and off-site utilization form should document its whereabouts.
9. Good Bank Account Records are Critical- Many schools hold book fairs and other charitable events during which funds are collected for the local school bank account. A journal/ledger should document the collection and transfer of funds into the school account. Similarly, the journal/ledger should document how funds are used to cover school costs. One should also remember that school-bank accounts often have specific purposes. Make sure the bank account is used for the expressed purpose.
10. Text Book Inventory- Much like the equipment inventory, the textbook inventory should be complete and include new purchases. An annual physical inventory should be conducted thereby assuring that written records match the physical inventory. The inventory list should also include model, serial number, and funding source.
Final Thoughts- The following guidelines were developed to help schools, districts, and educational organizations avoid common bookkeeping mistakes. Having said that, one should check always check with their district or appropriate official for further guidance on this subject. If you have other suggestions, questions, or comments, feel free to share your thoughts.