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What To Do In Case Of An What To Do In Case Of An AuditAudit

Shawn K. FacianeShawn K. Faciane

Internal Audit DirectorInternal Audit Director

August 2010August 2010

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What is an Audit?What is an Audit?

Webster's Dictionary defines the noun Webster's Dictionary defines the noun "audit" as "a methodical examination "audit" as "a methodical examination and review." As a verb, it means "to and review." As a verb, it means "to examine with intent to verify." examine with intent to verify."

The fact is - audits of one type or The fact is - audits of one type or another are a regular part of the another are a regular part of the process. No matter where you work, process. No matter where you work, you can expect to encounter audits. you can expect to encounter audits. Audits are a part of doing business. Audits are a part of doing business.

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Why Do We Need Audits? Why Do We Need Audits?

We need audits to assistWe need audits to assistmembers of the District in themembers of the District in the

effective discharge of theireffective discharge of theirresponsibilities. Internal Auditingresponsibilities. Internal Auditing

provides management withprovides management withanalyses, appraisals,analyses, appraisals,

recommendations and informationrecommendations and informationconcerning the internal controlconcerning the internal control

structure and the quality ofstructure and the quality ofperformance in carrying outperformance in carrying out

assigned activities and establishedassigned activities and establishedobjectives. objectives.

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How do I prepare for an How do I prepare for an audit?audit?

““An ounce of prevention is worth a pound An ounce of prevention is worth a pound of cure.“of cure.“

The best way to prepare for an audit and The best way to prepare for an audit and to ensure that an audit flows smoothly is to ensure that an audit flows smoothly is

to create and maintain good records. to create and maintain good records. Audits rely on central databases and Audits rely on central databases and records whenever possible. Having records whenever possible. Having complete and orderly departmental complete and orderly departmental records is extremely important. records is extremely important.

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The ability of faculty and department The ability of faculty and department staff to contribute efficiently and staff to contribute efficiently and effectively will play a big role in the effectively will play a big role in the outcomes. outcomes.

This presentation has been prepared to This presentation has been prepared to help staff in the instructional, academic help staff in the instructional, academic and operational departments and operational departments understand more about audits and how understand more about audits and how to provide the necessary support with to provide the necessary support with the least intrusion into ongoing work.the least intrusion into ongoing work.

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The Five C’sThe Five C’s

ClearClear

The intent of each transaction should be The intent of each transaction should be clear and withoutclear and without doubt. doubt.

Information is clearly described so that Information is clearly described so that time and effort will not be spent time and effort will not be spent reviewing the wrong information.reviewing the wrong information.

There is clear understanding about There is clear understanding about when the information is needed, and when the information is needed, and tthe requested information can be he requested information can be provided.provided.

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The Five C’sThe Five C’s

ConsistentConsistent

Be consistent in your application of the Be consistent in your application of the rules. rules.

Understand why these rules are being Understand why these rules are being made and the consequences for made and the consequences for breaking the rules.breaking the rules.

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The Five C’sThe Five C’s

Control Control

Implement strong internal controls to Implement strong internal controls to mitigate the risks to District assets. As mitigate the risks to District assets. As budget managers and administrators budget managers and administrators over limited District funds, exercise over limited District funds, exercise prudence in the expenditure of these prudence in the expenditure of these funds.funds.

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The Five C’sThe Five C’sCommunicationCommunication

Never be uncomfortable asking questions. Never be uncomfortable asking questions. Budget managers are encouraged to discuss Budget managers are encouraged to discuss potential audit issues before the issues are potential audit issues before the issues are documented as findings in an audit report. documented as findings in an audit report.

Strive to develop a working relationship with Strive to develop a working relationship with Internal Audit that will extend beyond a Internal Audit that will extend beyond a particular audit. (I develop an understanding particular audit. (I develop an understanding of your operation through each audit and am of your operation through each audit and am available to consult with you.) available to consult with you.)

Remember, the only stupid questions are the Remember, the only stupid questions are the ones you do not ask. ones you do not ask.

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The Five C’sThe Five C’s

Correction Correction

Be willing to implement corrective Be willing to implement corrective actions if necessary. The Internal actions if necessary. The Internal Auditor will evaluate the effectiveness Auditor will evaluate the effectiveness of the corrective actions taken and of the corrective actions taken and advise you on alternatives to achieve advise you on alternatives to achieve the desired improvements. the desired improvements.

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Types of AuditsTypes of Audits

Financial Audits Financial Audits

Financial audits focus on the review of specific Financial audits focus on the review of specific financial transactions and operating data to financial transactions and operating data to

ensure the reliability and accuracy of the ensure the reliability and accuracy of the District's financial and operating reports. District's financial and operating reports.

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Compliance AuditsCompliance Audits

Compliance audits seek to determine Compliance audits seek to determine whether the departmentwhether the department or campus or campus

under review has complied with under review has complied with applicable statutory laws, applicable statutory laws,

regulations, District policies and regulations, District policies and procedures, and commonly procedures, and commonly accepted principles of good accepted principles of good

management. management.

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Operational Audits Operational Audits

Operational audits involve an Operational audits involve an independent, systematic evaluation independent, systematic evaluation of the activities under review for the of the activities under review for the purpose of improving organizational purpose of improving organizational

and operating effectiveness.  The and operating effectiveness.  The operational audit seeks to ensure operational audit seeks to ensure the maximum benefit received for the maximum benefit received for

the resources expanded. the resources expanded.

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Program AuditsProgram Audits

These audits involve the review of These audits involve the review of entire programs for the purpose of entire programs for the purpose of

determining whether desired determining whether desired benefits are being achieved.  benefits are being achieved. 

"Program" is a broad term that "Program" is a broad term that encompasses any funded effort encompasses any funded effort which iswhich is collateral to the core collateral to the core instructional activities of the instructional activities of the

District.District.

AA program includes the composite program includes the composite plans and procedures established to plans and procedures established to

accomplish specific goals and accomplish specific goals and objectives. objectives.

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Investigative AuditsInvestigative Audits

Investigative audits are generally Investigative audits are generally unplanned and may result from unplanned and may result from

findings during a routine audit or findings during a routine audit or from information received from from information received from

management, employees, or themanagement, employees, or the general publicgeneral public

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““Why Me?, What did I do Why Me?, What did I do wrong?”wrong?”

Departments or campuses may Departments or campuses may be audited because its a: be audited because its a:

Randomly generated auditRandomly generated audit Management requested auditManagement requested audit Regulatory audit instituted by law Regulatory audit instituted by law Management ChangeManagement Change

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What is going to What is going to happen?happen?

If you are selected for audit,If you are selected for audit, thethe Internal Auditor will establish clear-cut Internal Auditor will establish clear-cut audit objectives to avoid aimless audit objectives to avoid aimless investigations into insignificant areas.investigations into insignificant areas.

You will be sent an Engagement You will be sent an Engagement Letter.Letter.

An Entrance Conference will be An Entrance Conference will be scheduled. scheduled.

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FieldworkFieldwork

Fieldwork is going to be performed Fieldwork is going to be performed on your department or campus. on your department or campus. Audit field work can be classified into Audit field work can be classified into

four categories:four categories:

Tests of Internal ControlsTests of Internal Controls Transaction testingTransaction testing Informal draft reporting Informal draft reporting Discussion of audit conclusions and Discussion of audit conclusions and

recommendations at the exit conferencerecommendations at the exit conference

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You should expect:You should expect: I will pull and review transactions I will pull and review transactions

and documentation.and documentation. I will ask you some budget questions.I will ask you some budget questions. I may project from a sample.I may project from a sample. I may flowchart your processes.I may flowchart your processes. A walkthrough of your campus or A walkthrough of your campus or

department will probably be done.department will probably be done. I am going to interview certain I am going to interview certain

members of your your personnel. members of your your personnel. (Just point me in the right direction).(Just point me in the right direction).

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More……More……

I may want to discuss your campus I may want to discuss your campus improvement plan with regards to improvement plan with regards to budgets and resources.budgets and resources.

I will ask about your records I will ask about your records management procedures.management procedures.

I sometimes make a lot of copies. Do I sometimes make a lot of copies. Do not become alarmed.not become alarmed.

I will come back to check the status of I will come back to check the status of corrective actions taken. corrective actions taken.

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The ReportThe Report Auditors prepare and communicate Auditors prepare and communicate

the findings in audit reports. the findings in audit reports.    All audit reports, are typically All audit reports, are typically

prepared in draft form for prepared in draft form for discussion with the auditee first. discussion with the auditee first. This gives you theThis gives you theopportunity to correct opportunity to correct misconceptions and to respond in misconceptions and to respond in the report in cases where we the report in cases where we disagree regarding the disagree regarding the appropriateness of a finding.appropriateness of a finding.

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Common Audit AreasCommon Audit Areas

Easy Audit FindingsEasy Audit Findings

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Activity FundsActivity Funds Poor receipting procedures. Start with the Poor receipting procedures. Start with the

Tabulations of Money.Tabulations of Money. Receipts being held for excessive periods of Receipts being held for excessive periods of

time before depositing. time before depositing. No Activity Fund Purchase Order to support a No Activity Fund Purchase Order to support a

disbursement. disbursement. Failure to adhere to competitive bidding Failure to adhere to competitive bidding

requirements. requirements. Payments for contracted services.Payments for contracted services. Non PO Payments.Non PO Payments. Monthly Reconciliations- check to make sure Monthly Reconciliations- check to make sure

that reconciliation was performed by the 15that reconciliation was performed by the 15thth of the following month.of the following month.

Ending balance of prior month does not agree Ending balance of prior month does not agree to beginning balance of current month.to beginning balance of current month.

Unsupported Disbursements- no receipts. Unsupported Disbursements- no receipts.

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Purchasing Policy and Purchasing Policy and ProceduresProcedures

Review the internal controls over the Review the internal controls over the acquisition of supplies, goods, and acquisition of supplies, goods, and services and that there is consistency in services and that there is consistency in purchasing practices within the District.purchasing practices within the District.

Verify that all school district contracts Verify that all school district contracts valued at $25,000 or more in the valued at $25,000 or more in the aggregate, for a twelve month period aggregate, for a twelve month period are procured through competitive are procured through competitive bidding purchasing methods. bidding purchasing methods.

Ensure that no contracted services are Ensure that no contracted services are paid for through the Activity Fund.paid for through the Activity Fund.

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AttendanceAttendance

I will also be auditing the accuracy I will also be auditing the accuracy of your attendance. (data quality) of your attendance. (data quality) This is done by taking the This is done by taking the attendance tracking reports and attendance tracking reports and backing them up to what is backing them up to what is contained in the student Cumulative contained in the student Cumulative Folders. Folders.

Each campus may receive one Each campus may receive one review in the fall, and one in the review in the fall, and one in the spring. spring.

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Construction Close-Construction Close-OutsOuts

Per CV Local, Construction Closeouts where “$100,000 or more has been expended from the owner’s contingency, final payment for construction work shall not be made until it is reviewed by the District’s Internal Auditor and ratified bythe Board.”

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Superintendent’s husband got the jobSuperintendent’s husband got the job Audit finds bid violations in Kountze I.S.D. construction projectAudit finds bid violations in Kountze I.S.D. construction project

By Jerry Jordan, News EditorBy Jerry Jordan, News Editor An audit by the Texas Education Agency has found that the Kountze

Independent School District crossed the line several times in its handling of millions of dollars in bond money that was given to Daniels Construction, the company owned by the husband of the school superintendent, Diane Daniels.

The report, obtained by The Examiner pursuant to the Texas Public Information Act, states that KISD violated state law by not going out for competitive bids on projects costing more than $25,000, as required by Texas Education Code Section 44.031.

“Instead, in July 2007, the district awarded a contract to the CMAR (Daniels’ Construction) to provide a 37,000 square foot parking lot made of concrete,” the audit report states. “Per review of the documentation provided, auditors determined that the CMAR submitted its proposal on June 19, 2007, four months past the RFP deadline. Additionally, the submitted proposal was for 4 inch concrete paving instead of limestone and asphalt as requested in the RFP. As a result, this contract was awarded in violation of TEC 44.031 (a) which stipulates all school district contracts valued at $25,000 or more shall be made by the method that provides the best value for the district. The KISD should have readvertised their original RFP to include an option for either asphalt or concrete in order to competitively procure the work rather than awarding the contract to the CMAR according to their new specifications.”

Kountze ISD

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Fraud……Fraud……

It It CANCAN happen at a school happen at a school district……district……

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FORT WORTH DISTRICT BILKED OUT OF $10 MILLIONFORT WORTH DISTRICT BILKED OUT OF $10 MILLION2 are charged in billing scam Ex-employee, contractor 2 are charged in billing scam Ex-employee, contractor

expected to plead guiltyexpected to plead guilty

U.S. Attorney Ron Eddins tells the news media outside the federal U.S. Attorney Ron Eddins tells the news media outside the federal courthouse Tuesday that former school official Tommy Ingram and courthouse Tuesday that former school official Tommy Ingram and contractor Ray Brooks have agreed to cooperate as the investigation contractor Ray Brooks have agreed to cooperate as the investigation into financial into financial

irregularities at the Fort Worth school district continues. The court irregularities at the Fort Worth school district continues. The court documents filed Tuesday showed that Tommy Ingram initiated the documents filed Tuesday showed that Tommy Ingram initiated the billing scam. billing scam.

The school district could produce no documents providing cost estimates, The school district could produce no documents providing cost estimates, plans or specifications for more than $750,000 in concrete work by plans or specifications for more than $750,000 in concrete work by Brooks Brooks

Contractors at I.M. Terrell Elementary School. A year later, workers Contractors at I.M. Terrell Elementary School. A year later, workers removed some of the concrete during construction at the school. Ray removed some of the concrete during construction at the school. Ray Brooks enters the federal courthouse Tuesday to be charged with mailBrooks enters the federal courthouse Tuesday to be charged with mail

and tax fraud. Brooks Contractors billed concrete work at I.M. Terrell and tax fraud. Brooks Contractors billed concrete work at I.M. Terrell Elementary School, as 38 separate jobs, and an architect said steps Elementary School, as 38 separate jobs, and an architect said steps that Brooks poured at Eastern Hills High School were not built to his that Brooks poured at Eastern Hills High School were not built to his designsdesigns..

Fort Worth ISDFort Worth ISD

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Auditors failed to do their jobAuditors failed to do their jobBy LISA FALKENBERGBy LISA FALKENBERG

Copyright 2009 Houston ChronicleCopyright 2009 Houston ChronicleMarch 11, 2009, 11:11PMMarch 11, 2009, 11:11PM

The idea of Houston public school teachers, principals and administrators indulging The idea of Houston public school teachers, principals and administrators indulging in alcoholic beverages and busting a move to DJ Jammin J at a rodeo gala is a bit in alcoholic beverages and busting a move to DJ Jammin J at a rodeo gala is a bit humorous.humorous.

The fact that they paid for their tickets with money intended to benefit students at The fact that they paid for their tickets with money intended to benefit students at schools with meager resources is troubling. schools with meager resources is troubling.

But the real shocker is the pitiful job the district’s and the state’s watchdog officials But the real shocker is the pitiful job the district’s and the state’s watchdog officials seem to have done in investigating the alleged misuse of funds. seem to have done in investigating the alleged misuse of funds.

As the Chronicle’s Bill Murphy reported this week, the tickets to the annual Black As the Chronicle’s Bill Murphy reported this week, the tickets to the annual Black Heritage Western Gala at the Houston Livestock Show and Rodeo have been paid Heritage Western Gala at the Houston Livestock Show and Rodeo have been paid for with as much as $100,000 in discretionary funds, the profits from school for with as much as $100,000 in discretionary funds, the profits from school vending machines, since 2003. vending machines, since 2003.

Murphy, citing the HISD financial procedures manual, wrote that such discretionary Murphy, citing the HISD financial procedures manual, wrote that such discretionary funds are to be used to “promote the general welfare and the educational funds are to be used to “promote the general welfare and the educational development and morale of students” and “any expenditures directly from this development and morale of students” and “any expenditures directly from this account must benefit the entire student body.”account must benefit the entire student body.”

It’s the job of inspectors general and auditors to lead independent, fact-based It’s the job of inspectors general and auditors to lead independent, fact-based investigations.investigations.

In this case, the district’s inspector general seemed to take on the role of legal In this case, the district’s inspector general seemed to take on the role of legal counsel defending the district. And the Texas Education Agency, at least at first, counsel defending the district. And the Texas Education Agency, at least at first, decided not to muddy its hands with the matter, choosing simply to trust the decided not to muddy its hands with the matter, choosing simply to trust the district. district.

Houston ISDHouston ISD

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A true story… A true story… Stolen Property Stolen Property

Men dressed in SBC uniforms went to two of our Men dressed in SBC uniforms went to two of our campuses and told staff that they were there to work campuses and told staff that they were there to work on the computers. Our staff gave them access to our on the computers. Our staff gave them access to our central servers at these schools. The men cut the central servers at these schools. The men cut the wires and walked off with about $46,000 worth of wires and walked off with about $46,000 worth of routers and other equipment. Apparently, this is an routers and other equipment. Apparently, this is an organized ring, and, according to police, we are not organized ring, and, according to police, we are not the first school district that has been hit (although the first school district that has been hit (although this was certainly the first we had heard of it). I this was certainly the first we had heard of it). I would encourage you to notify your personnel about would encourage you to notify your personnel about this situation, and make sure that they confirm, with this situation, and make sure that they confirm, with your own MIS department, the identity of anyone your own MIS department, the identity of anyone proclaiming to be communications technicians prior to proclaiming to be communications technicians prior to giving access to anyone that they do not know. giving access to anyone that they do not know. Actually, the police said that Hays ISD, Austin ISD, Actually, the police said that Hays ISD, Austin ISD, and Comal ISD had been hit with similar incidents. I and Comal ISD had been hit with similar incidents. I didn't confirm this with the districts, but the crooks didn't confirm this with the districts, but the crooks were definitely pros at this, so I'm sure this wasn't were definitely pros at this, so I'm sure this wasn't their first time!their first time!

Round Rock ISDRound Rock ISD

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Fraud: Who Commits Fraud: Who Commits it?it?

EmployeesEmployeesUsually long term in positions of trust in Usually long term in positions of trust in the organizationthe organizationOr they may be new and not know that Or they may be new and not know that the organization has controls to detect the organization has controls to detect fraud.fraud.

OutsidersOutsidersVendors in collusion with an employee.Vendors in collusion with an employee.Vendors who know the system and know Vendors who know the system and know what they can get away with, i.e.… what they can get away with, i.e.… inflating prices, delivering inferior goods, inflating prices, delivering inferior goods, etc.etc.

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Fraud: What does it Fraud: What does it cost?cost?

The Assoc. of Certified Fraud The Assoc. of Certified Fraud Examiners estimates that fraud has Examiners estimates that fraud has related costs of ½-2% of any budget. related costs of ½-2% of any budget.

Fraud is one of the few crimes that Fraud is one of the few crimes that responds to deterrents.responds to deterrents.

Audits are one defense to fraud in Audits are one defense to fraud in that they identify “red flags” that that they identify “red flags” that indicate that fraud may be present.indicate that fraud may be present.

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Key Indicators of FraudKey Indicators of Fraud

A weak system of internal controls A weak system of internal controls which are, in some cases, being which are, in some cases, being circumventedcircumvented

Key pieces of documentation are Key pieces of documentation are missing; and missing; and

Significant deficits in large budget Significant deficits in large budget funds that are unexplained.funds that are unexplained.

Taken together, this evidence justifiesTaken together, this evidence justifies

further investigation. further investigation.

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Most Common Fraud Most Common Fraud Report CasesReport Cases

Diversion of Cash ReceiptsDiversion of Cash Receipts Billing for services not performedBilling for services not performed Ghost employeesGhost employees Payroll FraudPayroll Fraud Phantom VendorsPhantom Vendors Use of school facilities for personal Use of school facilities for personal

benefit.benefit.

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2010-11 Audit Schedule2010-11 Audit Schedule Kingwood High SchoolKingwood High School Humble High SchoolHumble High School Atascocita High SchoolAtascocita High School Summer Creek High SchoolSummer Creek High School CATE CenterCATE Center Humble Middle SchoolHumble Middle School Various Elementary Schools-To be Various Elementary Schools-To be

determineddetermined

Construction- Close Out Audits (not too Construction- Close Out Audits (not too much!)much!)Humble High School Humble High School Atascocita Springs Elementary Atascocita Springs Elementary Woodcreek Middle School Woodcreek Middle School

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Departmental AuditsDepartmental Audits

Human Resources-Criminal Background ChecksHuman Resources-Criminal Background Checks Human Resources-Certifications Human Resources-Certifications Data Quality/AttendanceData Quality/Attendance Contract Services Review Contract Services Review Inventory Policy and Procedures/Work Order CostingInventory Policy and Procedures/Work Order Costing Federal GrantsFederal Grants Child Nutrition Services-Point of Sale and Cash Child Nutrition Services-Point of Sale and Cash

Management Management Fixed AssetsFixed Assets

OtherOther Booster Club ManagementBooster Club Management

SAS 99-Fraud ReviewSAS 99-Fraud Review

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Other ThingsOther Things

Responsibilities of Activity Fund SponsorsResponsibilities of Activity Fund Sponsors Fundraiser Recap FormsFundraiser Recap Forms Sales Tax BulletinsSales Tax Bulletins Internal Audit NewsletterInternal Audit Newsletter Booster Club NewsletterBooster Club Newsletter Conflict of Interest-SAS 99Conflict of Interest-SAS 99 Booster Club ManagementBooster Club Management Fraud Hotline –the new hotline is comingFraud Hotline –the new hotline is coming

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Humble Independent School District ___________________________________________________

Responsibilities of Activity Fund Sponsors The purpose for the collecting or raising and expending of funds by student groups is for the direct benefit of the students. Funds are to be used to finance activities that supplement the District’s educational program. Fundraising activities will contribute to the educational experience of students and will not conflict with the instructional program. Money raised by student groups and organizations is held by the school as trustee. The faculty sponsor of a student group is responsible for maintaining adequate financial records as evidence of proper custodianship of money received by and disbursed from club accounts. I hereby acknowledge that I have read the Humble Independent School District Activity Funds Manual and that I am responsible for complying with it. In particular, I acknowledge that:

1) All fundraising activities will be approved in advance by the principal using the designated form. (AF-108)

2) I am responsible for both safeguarding and accounting for funds received from and/or on behalf of students.

3) Student activity fund money will be turned in to the office daily using the Tabulations of Monies (AF-104) in the same form in which it was received.

4) At the completion of all fundraisers, the lower portion of Form AF-108 will be completed and submitted to the principal for approval.

5) All purchases made on behalf of the student organization will be made by check and approved in advance by the principal using the proper Purchasing policies and procedures. (See section 9 of the Activity Fund Manual)

6) I will maintain a positive balance in my organization’s account at all times. 7) If applicable, I will maintain compliance with the District Booster Club

Guidelines as they relate to Activity Funds. I fully understand that I will be held responsible for any student activity funds entrusted to me and that I may be required to reimburse the student organization for any money or property purchased with student activity money which is lost due to my own negligence, theft, or fraud. ___________________________________ ________________________ Activity Fund Sponsor Signature Date ___________________________________ ________________________ Activity Fund Club/Organization Campus

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Conflict of InterestConflict of Interest

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EthicsEthics

At the beginning of the new school year, Fredaobserves Martha, a fellow teacher, taking a

boxof office supplies home. Freda knows Marthahas several children in elementary school. What should Freda do?Answer choices:1. Reorder the supplies that were taken.2. Speak to Martha about what she saw and

ask for an explanation.3. Report the situation to their supervisor.

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Answer:Answer: According to district policy, According to district policy, employees are responsible for protecting employees are responsible for protecting district assets by being alert to the district assets by being alert to the potential for theft. In this case, Freda potential for theft. In this case, Freda might ask Martha for an explanation. She might ask Martha for an explanation. She needs all the facts before deciding to go needs all the facts before deciding to go to her supervisor. Also, asking questions to her supervisor. Also, asking questions might give Martha an opportunity to might give Martha an opportunity to clarify a possible misconception on clarify a possible misconception on Freda’s part. After getting all the Freda’s part. After getting all the information, Freda might find that Martha information, Freda might find that Martha will be using the supplies in a work-will be using the supplies in a work-related function. On the other hand, if related function. On the other hand, if Freda determines the supplies will not be Freda determines the supplies will not be used for official business, she should used for official business, she should report her suspicions to her supervisor.report her suspicions to her supervisor.

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You and several members from your department/school are at a conference where a vendor the district does business with is also in attendance. The vendor invites you all to dinner at a nice seafood restaurant where, you are told, the meal includes appetizers, the entrée and dessert. You and your co-workers stop by the restaurant to preview the menu. The total will be easily over $75 per person, and the vendor wants to pick up the tab. What do you do?

Answer choices:1. Go, but pay for my own meal and retain the

receipt.2. Accept the vendor’s offer. After all it is a

conference, and they will be feeding their other clients who attended this conference later.

3. Decline the invitation.

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Answer:Answer: According to district policy, According to district policy, (DBD Local) employees must (DBD Local) employees must report accepting anything of value report accepting anything of value or benefit beyond an aggregate of or benefit beyond an aggregate of $100.00 in any one school year. $100.00 in any one school year. Both 1 and 3 are correct answers.Both 1 and 3 are correct answers.

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Vicente and his wife, April, are proud and excited because their first child, Marilou, will enroll in her first semester at an Ivy League university this fall. They have been preparing for this event for the last few years, and have contributed small amounts to a college fund. After reviewing the enrollment information, they discover they will still need additional money to cover all the fees and board. They decide to teach summer school and forego the family vacation to cover everything.

Marilou will leave for school in the next two weeks. She has school clothes and her airline ticket has been bought. April and Vicente plan to write the check for her fees when the summer school payments are deposited to their account. When the payment for summer school teachers is posted, the couple only has 1,500 additional dollars. They both check their pay stubs and discover that while April was paid, Vicente only received his regular teacher’s salary. He calls the school to discuss the mistake that must have been made.

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Ms. Coleman, the office manager,remembers posting Vicente’stime and believes he should have beenpaid. She promises to follow up withPayroll to find out what happened. Across town Mark checks his bankbalance online and notices he has 1,500extra dollars this month.

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What should Mark do?

1. Be quiet and keep the money. No one will ever know.

2. Call the office manager at his school to find out if teachers at his school were the recipients of some award.

3. Contact his principal and the Payroll Department to report the situation.

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Mark should contact his principal Mark should contact his principal and the Payroll Department to and the Payroll Department to report the situation. When the report the situation. When the error is discovered, Payroll has the error is discovered, Payroll has the right by policy to immediately right by policy to immediately adjust his salary to collect the adjust his salary to collect the overpayment. Board Policy states overpayment. Board Policy states that “Adjustments shall be that “Adjustments shall be immediately made for immediately made for overpayments in salary, unless overpayments in salary, unless other arrangements are other arrangements are approved.”approved.”

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Booster ClubsBooster Clubs

See 2010-2011 Booster Club See 2010-2011 Booster Club Manual on the IA websiteManual on the IA website

Or contact Twyla Beaulieu at 281-Or contact Twyla Beaulieu at 281-641-8158641-8158

boosterclubs@humble.k12.tx.usboosterclubs@humble.k12.tx.us Booster Club Outreach-scheduled for Booster Club Outreach-scheduled for

September 21September 21stst and 28 and 28thth..

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Conflict of InterestConflict of Interest

See Conflict of Interest Disclosure See Conflict of Interest Disclosure on the new Internal Audit Websiteon the new Internal Audit Website

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Contact InformationContact Information

Shawn FacianeShawn Faciane Shawn_Faciane@humble.k12.tx.usShawn_Faciane@humble.k12.tx.us 281-641-8009281-641-8009

Twyla BeaulieuTwyla Beaulieu twyla.beaulieu@humble.k12.tx.ustwyla.beaulieu@humble.k12.tx.us 281-641-8158281-641-8158

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If you would like a copy of this If you would like a copy of this presentation, go online to the presentation, go online to the Humble ISD website, and the Humble ISD website, and the Internal Audit link and print a copy Internal Audit link and print a copy of it.of it.