News & Insights
Tips for How to Prepare for your Charter School’s Audit
March 7th, 2022
Audits can be a source of stress for school finance teams and administrators. The key to alleviating the anxiety and pain associated with auditing is no surprise. It comes down to preparation.
Prepping for your school’s audit in advance will help it run more efficiently, eliminating the back-and-forth communication associated with missing or incomplete documentation, for example. Investing the time to plan and prepare is especially important for those charter schools that haven’t been required to complete an audit.
Here are some helpful tips to help your upcoming audit, review, or other engagement, run as smoothly as possible.
Importance of an Audit Timeline
Aligning calendars and open communication equals an efficient audit process. Understand the timeframe of your audit, including how long the auditors estimate they will need to complete the audit. This will allow your team to schedule time to prepare the year-end information required for the audit and allocate the necessary resources you have available to assist the auditors. Additionally, if there are any changes in the year being audited, such as a single audit is expected to be required, let your auditor know in the planning stages of the audit.
Close Accounting Year-End
Your audit is scheduled. Now what? There are a few key things to keep in mind when preparing to close the accounting books for year-end. Closing your year-end financial numbers should be done as accurately as possible. Here are some considerations:
- Ensure all year-end journal entries are recorded.
- Prepare a schedule of federal awards (SEFA)
- Reconcile all accounts to various ledgers, including (not limited to) cash, investments, accounts receivable, accounts payable, inventory, property, plant and equipment, wages, debt, etc.
- Ensure additional oversight and review are performed to verify reconciliations are prepared timely and accurately.
Request “Provided By Client” List
“Timing is everything.” The more information and account schedules you can prepare before the audit begins, the more efficient and timelier the audit process. Auditors have a standard list of information they generally need from you to complete the audit. This list should be provided to you shortly after the audit is scheduled. If not, you should request the list from your auditor prior to the start of the audit, allowing you to prepare the necessary schedules prior to the auditors arriving for the audit. While preparing/creating the necessary audit schedules, it is important to verify that these schedules agree to the year-end trial balance that is provided to your auditors. This will help to eliminate additional work related to the audit.
Select the Right Partner-Expertise and Experience Matter
Choosing the right professionals to perform your school’s audit is essential to ensuring an accurate and timely result. Selecting an auditing firm invested in the charter school industry is sure to save you time, money, and proverbial headaches around the complexities of compliance regulations. Firms with charter school expertise know the industry and understand a charter school’s unique structure requirements.
Collaboration and open lines of communication are also critical to the efficiency of your audit. Look to work with a firm that provides proactive communication and guidance that expands beyond the audit. Good firms will keep your school updated on current industry changes and share news and insights to prepare for future audits and reporting needs.
Following these steps is easier said than done. A significant amount of work goes into an audit. Preparing in advance and doing your due diligence to select an experienced partner will set your charter school’s audit up for success. We’d be remiss to say you won’t hit any bumps in the road or that all required audit items will be known in advance. Block out some time on your calendar when auditors are on-site, so you can be prepared to gather any additional documentation as needed.
One final piece of advice: stay in contact with your auditors. Ask them questions in advance and clarify expectations, deadlines, and responsibilities. The more you communicate, the less likely surprises are to occur.
Does your school need a single audit? We can help!
Single audits can be stressful, especially for schools that haven’t experienced one in the past. Maner Costerisan is a proven partner for more than 100 school districts across Michigan. With more than a decade of on-time education audit completions, our experts can simplify the process and ensure your school receives a quality audit.
Maner Costerisan understands the unique needs of Michigan charter schools. We work together to ensure schools follow charter guidelines, meet state and federal compliance requirements , and exceed board expectations. Whether your school needs an audit, could use short- or long-term accounting support, or could benefit from increased financial reporting and KPIs to help your board make more informed decisions, our team of experts can help. With more than a decade of on-time education audit completions, we are a trusted partner to more than 100 school districts across the state.