Schools have many of the standard ledgers, payroll, accounts payable, etc., which can be key concerns.

The following are commonly used tests (grouped by type).

Asset Management

  • Identify fully depreciated items and assets higher than replacement cost
  • Recap asset values, in value order, by net or cost amount
  • Recalculate expense and reserve amounts using replacement costs
  • Compare useful lives of assets by category
  • Extract assets with useful lives or depreciation rates beyond set norms

Kickback or Conflict-of-interest Schemes

  • Look for vendor prices greater than standard
  • Identify price increases greater than acceptable percentages
  • Check for continued purchases in spite of high rates or returns, rejects or credits
  • Look for high volume purchases from one vendor

Phantom Vendor Schemes

  • Match name, address and phone numbers between employee and vendor files
  • Check vendor address against marketing address lists

Policy Compliance

  • Monitor the retention of various records and documents to ensure compliance with government (Federal State) and/or local regulations
  • Extract transactions by funding code, fiscal year and obligation control level and compare to encumbrances
  • Analyse rates and license fees on licenses to determine bylaw compliance
  • Match vendor address file with employee address file to ensure compliance with vendor restrictions
  • Extract purchase orders below dollar amount requiring compliance with sealed bids
  • Extract transactions of assets funded by federal grants to ensure compliance with grant requirements
  • Sort contracts database by contract or cost types to test compliance with government contract terms

Questionable Invoices

  • Identify invoices without a valid purchase order
  • Look for invoices from vendors not in approved vendor file
  • Find invoice for more than one purchase order authorisation
  • Identify multiple invoices with the same item description
  • Extract vendors with duplicate invoice numbers
  • Look for multiple invoices for the same amount on the same day
  • Find invoice payments issued on non-business days (Saturdays and Sundays)
  • Identify multiple invoices at or just under approval cut-off levels

See Also