EDLD 5342 Week 4 Part 5 – Interview with Superintendent and/or Business Manager on Financial Audits

I met with the HISD Superintendent, Dr. Steve Johnson and the HISD Director of Finance, Lois Ann New, to discuss the FIRST accountability system and the annual external financial audit process.  Dr. Johnson has stressed in every one of our meetings that communication and transparency must be the most important factors in every action taken.  We reviewed his process for analyzing and communicating the state budget shortfall.

·         Phase 1: Establishing Understanding - meetings with various stakeholders to share current financial conditions of the district and to share local factors that will impact the budgetary operations of our system

·         Phase 2: Defining the Problem - sharing information on hand, and yet to come, related to projected shortfalls in state level funding as well identifying specific grant funds that have been earmarked for elimination from state budgets

·         Phase 3: Seeking Solutions - involving stakeholders in how best to address the shortfall between projected revenue and current spending levels

·         Phase 4: Implementation - identifying what can be accomplished in fiscal year 2011-2012 and what must be delayed until fiscal year 2012-2013

In terms of the district’s audit process, Mrs. New explained that it is very straight forward and follows the same timeline and procedure each year.

1.    The external auditor is selected by the district RFQ - Request for Qualifications. (Bids)

2.    The HISD Board of Trustees reviews the RFQ and votes on which auditor will be approved.

3.    The audit is conducted at HISD Central Office. It is a desk top audit. The auditors ask questions regarding the special programs such as Special Ed and Title I programs.

4.    The audit determines whether or not the district is in compliance with general accounting procedures as well as with GAO Government Accounting Office standards.

5.    The results are communicated. The company determines if the district is in compliance and does put this  detailed report in writing.

6.    This report is reviewed in an open School Board Meeting and a public meeting. The public meeting is held first and then the Board Meeting generally follows.