Preparing for the Audit

Presented by Patty McClendonSenior Manager – KPMG LLP

KPMG LLP

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May 2007 GAAP Reporting Workshop

Overview – Proper Care andFeeding 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

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May 2007 GAAP 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

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May 2007 GAAP Reporting Workshop

The Role of the Independent Auditor, continued

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)

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May 2007 GAAP 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)

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May 2007 GAAP Reporting Workshop

First Day of Fieldwork –Submission to KPMG Campus Team

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

Campus analytical review (fluctuation analysis) by financial statement line item (part of reporting package)

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May 2007 GAAP Reporting Workshop

Key Deadlines – Submission to CO

Auxiliary organizations’ audited financial statements, including supplementary information schedules – September 28, 2007

Campus reporting package (includes financial statement and A-133 audits, including FISAP) – October 18, 2007

Campus analytical review (fluctuation analysis) by financial statement line item – October 18, 2007

A-133 findings – November 7, 2007

Campus draft stand-alone financial statements (including management approved MD&A) to KPMG for review – November 16, 2007

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May 2007 GAAP 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

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May 2007 GAAP Reporting Workshop

Sample Schedules

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May 2007 GAAP Reporting Workshop

KPMG Information RiskManagement (IRM) Audit Team – Scope of Work

IT General Controls Review

ERP review Access controls

Configuration controls

Financial aid system controls at selected campuses (7 higher scope A-133 campuses)

Department of Education upload to campus Student Information System (PeopleSoft or Legacy)

Grade system – user access

Interface from grade system to financial aid system (if applicable)

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May 2007 GAAP Reporting Workshop

IRM Test Work – Key Dates

April 27, 2007 – Campus IT PBC list and questionnaires sent to campuses

May 11, 2007 – Campus PBC and questionnaires due to KPMG

May - July, 2007 – Campus IT general controls test work and specific business process controls test work

Entails some on-site campus visits (7 campuses plus the CO), while for the remaining campuses the work will be conducted via phone interviews and requested documents.

UNISYS Data Center review(June 4 – 6, 2007)

Project wrap up / Campus close out meetings(TBD ~ July)

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May 2007 GAAP Reporting Workshop

Questions