Audit Archive 2022
Annual Financial Audit Reports
Once the books are closed for the school year, an independent auditor must conduct a final audit of the district’s financial records. The report must be presented at a public meeting along with any audit exceptions, recommendations or findings identified and a description of the actions that will be taken to address them. The audit provides important information with which to evaluate a district’s operations and its future financial health. Our office is responsible for reviewing the district’s audit, including audit exceptions, to ensure that adequate corrective plans have been developed.
Audit Report Filing
In accordance with EC 41020(h), school districts and joint powers agencies (SELPA) are required to file the annual financial audit report for the preceding fiscal year with the Santa Barbara County Education Office (SBCEO), the State Controller’s Office (SCO), and the California Department of Education (CDE) by Dec. 15.
In accordance with EC 47605(m), charter schools are required to submit a copy of their annual financial audit report for the preceding fiscal year to the chartering authority, SCO, CDE, and SBCEO by Dec. 15, of each year. This subdivision does not apply if the audit of the charter school is encompassed in the audit of the chartering entity pursuant to EC 41020 (EC 47605.6(m)).
Audit Extension Request: An extension of the annual audit report filing deadline may be granted only with the consent of the CDE and the SCO under extraordinary circumstances.
District Board Review
The governing board of each school district shall review the following at a public meeting: 1) the annual audit report, 2) audit exceptions, recommendations, or findings identified by the auditor, (including any management letters issued, and 3) a detailed written description of actions that have been (or will be) taken to correct audit exceptions and management letter issues, if applicable by Jan. 31 (EC 41020.3(a)). Review of the annual audit report shall be placed on the board agenda of the meeting pursuant to EC §35145.
Our office reviews the audit exceptions in the annual LEA audit report along with any supplemental information presented to the board and determines whether each audit exception has been corrected or whether the LEA has developed an acceptable plan of correction. If a description of the correction or the plan of correction has not been provided as part of the audit, or is not adequate, our office will notify the LEA and request the governing board to provide additional information by Mar. 15 pursuant to EC 41020(j)(2).
EC 41020(b)(3) requires that LEAs file their annual financial audit contracts for the upcoming fiscal year with our office by Apr. 1. To file your audit contract, please complete the Auditor Selection Form or Charter School Auditor Selection Form and submit to SBAS along with a copy of your LEA’s current audit contract. If the governing board of an LEA is unable to make satisfactory arrangements for the annual financial audit prior to Apr. 1, the Education Code requires that our office provide for the audit and charge the district.
Forms & Templates
Audit Extension Request (Due Dec. 1)
Auditor Selection Form (Due Apr. 1)
Charter School Auditor Selection Form (Due Apr. 1)
Financial Audit Certification (Due Jan. 31)
Charter School Audit Review (Due Jan. 31)
When an auditor issues a report, there are four ways they can express an opinion on the audited financial statements: unqualified, qualified, disclaimer, and adverse (see below). The auditor is required to state in the opinion whether generally accepted accounting principles (GAAP) have been followed and applied consistently.
- Unmodified opinion — this is the desired opinion, and means there are no reservations about the financial statements. This opinion is often called a clean opinion, meaning that the financial statements are presented fairly.
- Qualified opinion — this means that the auditor has found some exception(s) to the accounting applications, or that misstatements, individually or in the aggregate, are material to the financial statements but not pervasive.
- Adverse opinion — this means that the auditor, having obtained sufficient audit evidence, concludes that misstatements, individually or in the aggregate, are both material to the financial statements and pervasive. The financial statements do not fairly present the financial position, results of operations, and changes in financial position, and thus are not in conformity to GAAP.
- Disclaimer of opinion — this means that the auditor was unable to obtain sufficient appropriate audit evidence on which to base an opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive. The auditor is not allowing their name to be associated with financial statements that could not be examined in accordance with GAAP.
Audit Exit Conference
The purpose of an exit conference with your auditor is to discuss the results of the audit before the report is issued.
- Type of opinion
- Management discussion and Analysis
- Audit Adjustments
- Get transaction detail from auditor (adjusting JE)
- Audit Findings
- Does auditor have all of the information?
- Consult with auditor to develop a sufficient plan
- Obtain/review/understand auditor prepared schedules, entries, etc.
- Other concerns/comments/non-standard financial statement notes