Volusia Schools audit teams outline dozens of reviews; RSM explains internal audit role and follow-up process

Volusia County School Board members heard an hourlong briefing Oct. 28 on the district's audit environment, the separate internal audit function managed by RSM, and how outstanding audit observations are tracked and closed.

Todd Cease, the district's chief financial officer, told the board that the annual comprehensive financial report (ACFR) is the district's cornerstone audit and is required by Florida Statute 218.39; the audit covers revenues, expenditures, capital assets and compliance and must be submitted within nine months of the fiscal year end. He also summarized other reviews that feed the ACFR: component-unit audits (charters and the Futures Foundation), internal accounts (school activity funds audited by James Moore Company), single-audit testing for federal awards under 2 CFR Part 200 when federal expenditures exceed $1,000,000, and state program reviews when state-project funds trigger the state threshold cited as part of the Florida statutes. Cease noted that auditors review IT general controls (user access, cybersecurity and change management) because those systems affect financial integrity.

Laura Manlove, managing director at RSM, explained the district's internal audit model and the role of the independent audit committee. RSM is contracted to perform the internal audit function (a separate assurance activity from the annual external financial audit). RSM's process begins with an annual risk assessment informed by interviews with board members and management and news and industry scanning; the audit committee then approves a prioritized plan. Audits proceed through kickoff, fieldwork, vetting with management and a final report to the committee and board. RSM said it also conducts follow-up testing and will not close findings until remediation is verified through retesting.

Amy Williams and Stan Schmidt, volunteer members of the school's audit committee, described their role: they review RSM's risk assessment and recommended audits, rank and approve priorities, meet quarterly to review high/medium/low observations and question management directors and they participate in external-auditor selection when required.

Manlove told the board that turnover in district leadership and delays in an Oracle ERP implementation have complicated remediation timelines; several audit observations stemming from 2020 remain open because process changes were paused or because the district awaits stabilized ERP procedures for timekeeping, purchasing and onboarding. She said management and the superintendent consider remediation a priority and that RSM expects much of the outstanding work to close in the next 6 to 12 months as controls and standard operating procedures are formalized.

Board members pressed for detail about which pending items depend on the ERP and which can be retested now. RSM said some items are ready for retest while others would be premature until new ERP processes are in place. RSM and the audit committee emphasized their statutory and standards-based duties to follow up, retest, and not close items until evidence supports closure.

The presentation referenced Florida statutes and auditing standards discussed during the briefing and included guidance sources cited by speakers: Florida Statute 218.39 (financial audits and reporting), Florida Statute 11.45 (operational audits by the Auditor General), Florida Statute 218.391 (audit committee) and federal single-audit requirements (2 CFR Part 200). The district also relies on Governmental Accounting Standards Board (GASB) guidance and Florida Department of Education internal-account rules (the DOE "Red Book").

Manlove and committee members urged the board that continuing to develop written procedures and retaining a stable ERP environment will reduce future audit findings and speed remediation. The board followed with questions on specific pending items and thanked RSM and the volunteer committee members for their work.