Preparing for the Audit

Presented by Elisa StilwellSenior Manager - KPMG LLP

KPMG LLP

2GAAP Reporting Workshop

Overview - Proper Care and Feeding of the Audit Process

Role of the auditor

Role of the campus

Planning and lots of communication

Campus preparedness - having all required items ready on first day of fieldwork!

Directly impacts the ability to stay “on track” with required audit timeline and CO submission deadlines

3GAAP Reporting Workshop

The Role of the Independent Auditor

Provide PBC List (contained in Chapter 9) Financial statement audit

A-133 audit (higher and limited scope)

KPMG campus partners to communicate campus audit preparedness to Chancellor’s Office (CO) on first day of fieldwork

Planning meeting/ entrance conference held

All PBC schedules provided

Completed and approved reporting package provided to KPMG campus team

Draft financial statements (excluding MD&A) provided to KPMG campus team

4GAAP Reporting Workshop

The Role of the Independent Auditor (cont’d)

Communicate progress and any difficulties or issues encountered during the audit, including proposed management letter comments and single audit findings, to:

Campus management

CO via weekly CO meetings with campus partners

KPMG Systemwide Team via weekly progress reports

Meet deadlines set by CO, campus and audit team (refer to audit timeline for key dates)

5GAAP Reporting Workshop

Understanding the Role of the Campus

To have all requested schedules, including the completed and approved reporting package, PRIOR to the first day of fieldwork (refer to Engagement Team Phone List for fieldwork start dates)

Provide suitable workspace, including phone and internet connections

Designate campus contacts for financial statement and A-133 audits

Meet deadlines set by CO, campus and audit team (refer to Audit Timeline for key dates)

6GAAP Reporting Workshop

First Day of Fieldwork – Submission to KPMG Campus Team

Completed and approved campus preparedness checklist (available on CO website)

All PBC schedules – to be provided in a separate set of PBC binders with indexing of all schedules (refer to Chapter 9)

Completed and approved reporting package

Draft financial statements (excluding MD&A)

7GAAP Reporting Workshop

Key Deadlines – Submission to CO

Auxiliary organizations’ audited financial statements, including supplementary information schedules – September 30, 2005

Campus reporting package (includes financial statement and A-133 audits, including FISAP and findings, if any) – October 18, 2005

Campus fluctuation analysis by financial statement line item – October 18, 2005

Campus MD&A (reviewed and approved by management and KPMG teams) – October 18, 2005

8GAAP Reporting Workshop

Planning Meeting/ Entrance Conference

Campus and KPMG team introductions Current year activity and issues Scope of audit PBC list clarification Confirmations Key deadlines

Auxiliary organizations Reporting package Management’s discussion and analysis Stand-alone financial statements

Confirm fieldwork timing

9GAAP Reporting Workshop

Sample

Schedules

10GAAP Reporting Workshop

2005 A-133 Higher Scope Campuses

Bakersfield

Dominguez Hills

Hayward

Humboldt

Los Angeles

San Bernardino

San Diego

San Luis Obispo

11GAAP Reporting Workshop

KPMG Information Risk Management (IRM) Audit Team – Scope of Work

Update understanding of the IT environment via scheduled conference calls with campuses and review of selected documentation

Data conversion for PeopleSoft baseline implementation at selected campuses

ERP review Access controls

Configuration controls

Financial aid system controls at selected campuses (8 higher scope A-133 campuses)

Department of Education upload to campus systems

Grade system – user access

Interface from grade system to financial aid system

12GAAP Reporting Workshop

IRM Testwork– Key Dates

May 6, 2005 – IRM PBC list distributed to campuses

May 19, 2005 – Questions distributed for campus conference calls scheduled beginning May 31, 2005 (approximately 2 hours per campus)

May 31 to June 10, 2005 – Conference calls to be held with campuses to discuss applications, networks, configuration changes, and continuity planning / computer operations

Drives planning and scoping efforts

June 17, 2005 – Submission of all items on PBC list to CO (ERP review covering access controls and configuration controls)

Dates to be determined – on-site testwork at selected campuses

13GAAP Reporting Workshop

Questions?