Ultra City School District: Auditing Report & Expenses - Essay Sample

Paper Type:  Essay
Pages:  4
Wordcount:  911 Words
Date:  2023-02-01


The Ultra City School District is an institution of learning serving the people of Oneida in Utica county. The main objective of this entity is to provide education. It has a total number of 151 employees with estimated payroll expenses of $4.7 million. In 2016-2017, the District spent an amount totaling $76.7 million on salaries and wages.

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The Duration of Audits

The preparations and presentations of this report took an approximated time of one year. The process of auditing began on 1st July 2016 and ended on 4th August 2018. This audit report had a backward extension to 2002 and also forwarded to the beginning of the year 2018. The forwarding of the reports was to enable the auditors to review some transactions in the payroll which had no effective capture. Hence, the need for backdating and forwarding of the reviews.

The Audit Objective and the Scope

This audit reported seeks to meet its objective of determining the measures undertaken to ensure fair compensation of the employees. Among the strategic concerns about these measures is the determination by the audit team, whether the Board pays the benefit to the employees accurately, with proper approvals. Also, this report intends to examine the established procedures by the officials based on the District's written collective bargaining policy in ensuring accuracy in the payrolls.

Key Operational Findings

A review of payroll payment of 151 employees reveals errors for almost $418000 out of the possible budget of $4.7 million. The cause of this error is due to inaccuracy and failure to consider the Board's resolution. For instance, the payment of salaries amounting to $347368 to the six individuals had no official approval by the Board and also another fee of $11690 who had no specific work performed within the cite. Again, the fingerprint manual clock had no adequate support of entries by the supervisors'' approval. The effects of these errors resulted in the inaccurate payment records in the firm leading to failure of reconciliation of the organizational financial statements.

Types of Evidence in Performing the Audit

The audit team used interviews in getting the financial information of the District. The process involved interviewing of the District employees and the Board members who gave out the understanding of the controls and procedures of auditing. Data download from the District Fingerprint Clock the number of employees who had an adjustment on leave records. Also, the audit team reviewed the changes in salaries and wages paid to the employees of the District.

The Evidence of Using Data Analytica

From the audit report, there is the use of data analytics. While conducting the reviews, the team complied various figures relating to the payments made by the District both by the approval and non-approval by the Board. For instance, the report selects about 25% out of the 471 employees for sampling.

The Key Recommendations

The institution should ensure there is proper documentation and the official approval of the fingerprint time clock when handling the manual adjustment of missed punches. Again, the District should ensure that the Board authorizes the payment of salaries, wages, and extra fees before its release. Making accurate payments through established payroll procedures is yet another recommendation that the District should consider. This accuracy should also have the support of the board officials.

Recommendations in Addressing the Cause

The recommendations by the audit team successfully managed to address the challenges that the District faces in its financial records presentation. From the recommendations, there has been the implementation of an internal additional verification system that keeps the payment of employees' wages and salaries in check. Besides, the Board also reports that they have adopted the use of the newly created verification form used in every separate appointment.

Cost Saving in the Report

The alleged erroneous payments of salaries to the five employees and the Computer Media Specialist was not right. According to the Board, the five members have an official listing, hiring and undergo direct supervision by the Board. Also, the payments of salaries to the specialist had a due authorization by the Board. Therefore, the District saved a sum of $45823, $17869, $97138, $61200, $46198 on the five officials plus the $418000 leading to a total of $714,389, 090 as the saved cost.

Management Acceptance of the Recommendations

The management of the District did not accept all the recommendations. The failure to follow these recommendations is due to the recognition by the Board that not all the mistakes identified by the audit review team were correct. For instance, the report indicates that the five employees received an authorized payment and yet from the Board, these members are officially hired and supervised for their roles. Hence, the recommendations to revoke their pay is not relevant to the organization.

Value Addition by The Report

From the audit reports, the District has made great strides in enhancing its performance. For instance, it has adopted an internal verification system that provides additional support verification and the identification of the employees' salaries and wages against the Collective Bargaining Agreement. Also, the institution has established the methods of using new payroll Verification Form by the Department of Human Resource to handle all the prospective appointments.Lessons from the Reviews of Report

From the reviews, every organization needs to compensate the employees for only the meaningful services they provide. This strategy should further involve proper documentation of all the job records with well-written explanations of the tasks. Also, it is crucial to learn that the internal auditor should play the role of reviewing payroll changes and reconcile the reports to determine the viability of such changes.

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Ultra City School District: Auditing Report & Expenses - Essay Sample. (2023, Feb 01). Retrieved from https://midtermguru.com/essays/ultra-city-school-district-auditing-report-expenses-essay-sample

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