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Audit committee recommends RSM engagement, discusses transition and merging oversight roles
Summary
The audit committee updated the board on an incoming external auditor engagement with RSM, continued work on school sampling and post-audit follow-ups, and discussed options for combining the audit committee with the Citizens Financial Oversight Committee (CFOC) or creating subcommittees to preserve expertise.
The audit committee told the board it will recommend the engagement of RSM as the district's next external auditor and described steps to accelerate the incoming firm's learning curve and the five-year deep-risk assessment the committee is required to conduct.
Committee member Mr. Daniels said the panel welcomed a fifth member, Mary Foreman, and has been coordinating the incoming RSM team with the outgoing auditors to reduce transition delays. "My purpose here is more to try and reduce the learning curve," Daniels said, adding the committee expects RSM to start with the required deep risk assessment and to provide a preliminary assessment by the September meeting.
The committee also reviewed prior post-audit follow-ups at MTC and school-level sampling options. The committee discussed a reduced sampling approach for school internal accounts that was recommended in prior work papers: "Pervis Gray came in and recommended that we do a reduced sampling, where they look at all the high schools, and then they take a sample of the middle schools and the elementary schools," Daniels said, summarizing the committee's view that sampling was appropriate unless turnover or specific disparities require wider review.
Committee members and board members discussed whether the Citizens Financial Oversight Committee (CFOC) and the audit committee should be combined or aligned more closely. The discussion focused on charter language that defines membership eligibility for the audit committee's professional criteria. One board member suggested creating a subcommittee or adjusting the charter so non-CPA community members could participate in specialized CFOC work without losing the audit committee's professional oversight. "One of the things that I understand is holding that back is the definition of who's eligible to be on the audit committee. It is very specific as far as professional criteria experience," a committee member said.
The committee expects the RSM engagement letter to appear in the next board packet and asked the board to approve that engagement so the incoming firm can begin preliminary orientation with the predecessor auditor. The committee said it will forward the human-resources audit report now nearing completion and other recommendations following the auditor-general's coordination meeting in May.
Board members and committee members noted a need to recruit additional volunteers for oversight committees as one member plans to rotate off January 1, and they discussed preserving institutional knowledge during transitions.
No formal board vote on the RSM engagement was recorded during the workshop; the committee said it will present the engagement letter and its recommendation at the next board meeting for action.
