Internal Controls Without an Internal Auditor

Focus: SCHOOL FINANCES

Trust but verify. Three simple words that when acted upon can prevent major problems.

Ask the superintendent of a 1,700-student school district in south Texas who trusted his business manager of several years. 

Every quarter, the business manager submitted the investment report for the superintendent’s approval. If only the superintendent also had asked to see the statements from the investment companies, he would have noticed the reports did not agree, would have avoided some ill-informed spending decisions and would still have his job.

In many school districts, there is no internal auditor. While an annual financial audit is required and provides assurances of sound school district finances, small discrepancies in daily or monthly transactions can add up and sometimes take years to uncover. Having an adequate set of internal controls in place will help superintendents sleep better.