School Business Affairs September 2019

22 SEPTEMBER 2019 | SCHOOL BUSINESS AFFAIRS FINANCE AND ACCOUNTING Establishing Effective Internal Controls Regardless a district’s size, its internal control system is critical to efficient and effective operations. By Sarah Kautz management that provides reasonable assurance that the following objectives are being achieved: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.” Creating an Effective System The system of internal controls for a small school district of 500 students differs from that of a district of 10,000 or more students. Large districts may have internal audi- tors and robust documentation; small districts may have only one or two people completing all financial and I t’s that time of year again. Many districts have already been contacted by their external audit firms requesting information: actuary calculations, trial balances, grant paperwork, proof of publications, board minutes, balance sheet backup, and internal con- trol documentation. Internal control documentation is often low on busi- ness officials’ priority lists and updated only during the audit, yet they can strengthen a district’s system of inter- nal controls and maintain its focus throughout the year. The Government Accountability Office defines internal control as “an integral component of an organization’s ETIAMMOS/STOCK.ADOBE.COM