ends up receive the funding? Therefore the funding will flow to the school board where the student is enrolled on the two count dates and should specialized equipment be purchased by a school board, the equipment will follow the student. There is an initiative in New Brunswick to provide all students with netbooks. Is Ontario discussing this? No, this is not being discussed at the current time. In the GSN, how much represents the amount for the teacher pension transfer? The teacher pension transfer is not part of the GSN. This amount is provided by the province outside of the GSN. What are the major factors for the increase in GSN over the past few years? The major changes to the GSN for 2010-11 are as follows: support for the Provincial Framework Agreements; funding to address cost pressures in key (student transportation, community use of schools, and school operations); funding to increase the management capacity of boards; increased special education funding and a new component added to the measure of variability; and, Structural reforms. Regarding ESL grants, is there no allowance made for a child born in Canada to non-English speaking parents? Yes there is consideration for those students as ESL grants are made up of two components: “The Recent Immigrant” component provides a total of $10,160.80 per eligible pupil over four years and is based on the number of recent immigrant pupils born in countries other than Canada, Great Britain, Ireland, the United States, Australia, and New Zealand. “The Pupils in Canada” component is based on the 2006 Census data on the number of children whose language spoken most often at home is neither English nor French.
the audit committee, including external members, on the funding formula? Are school board financial statements submitted to the Ministry of Education every month? The audited financial statements are submitted to the Ministry once every year. The due date for the Financial statements was November 15, 2010 and for 2010-11 the date will be November 15, 2011. Introduction: Overview of the Provincial Initiatives – Audit Committees & internal Audit Question Answer Is the $5 million allocated for internal audit an annual amount? Yes, this amount is an annual amount. Since it’s introduction, the annual funding amounts have been as follows: 2009-10, $2 million, 2010-11 and going forward $5 million. Does the Ministry know what the long-term savings will be from the regional internal audit initiative? It is difficult to demonstrate the benefits of the internal audit function through the investments made. Stakeholders and management look for cost savings in order to ensure transparency and accountability. The internal audit function should not be measured strictly on savings to the board just as the effectiveness of life guards should not be based strictly on the number of lives saved. The following list provides some performance indicators that could be used to rate the effectiveness of the internal audit function: Elapsed time for issue of reports (completion of audit work to draft report or draft report to final) Number of unsatisfactory audit opinions (as % of total) Number of audit assignments completed (versus number planned) % of recommendations accepted % of actions fully implemented Number of positive unsolicited comments about internal audit
Number of complaints Number of repeat audit findings Amount of direct savings potential as a result of audits Number of major process improvements implemented as a result of audits Percentage of customer satisfaction (i.e., from surveys) % of key risks audited in the year Extent of reliance external audit can place on internal audit Cost versus budget Extent of advice given Number of best practice shared Will the value for money of the regional internal audit function be assessed in the future (i.e. whether the benefit of having the internal auditors exceeds the cost)? As noted in the answer to the previous question, the benefits of the internal audit function are not easily quantifiable. Internal audit assesses risks, risks that could lead a school board to not achieving its objectives of student success if not properly identified. They can also aid in preventing the loss of assets and resources and in ensuring compliance with laws and regulations, just to name of few of their roles. The Ministry of Education will monitor the regional internal audit function as it monitors all aspects of the GSN funding model to ensure that it meets the needs of the students of Ontario. How do we, as a school ensure that we will receive an equitable distribution of regional internal audit resources? (Slide #12) The regional internal audit manager (RIAM), by using his or her professional judgment, is responsible for the distribution of regional internal audit resources for his or her region. Some of the tools at his or her disposal are the size of the school board, the risk assessment results of the school board, knowledge of the school board, etc. In the event that you believe you are not being treated equitably, you can follow the regional conflict resolution process as described at: Given the geographical size of Northern Ontario will there be sufficient travel funds for the internal audit team to fulfill their obligations (Slide #12) A portion of the funding that is allocated to each of the regions is on the number of square km in the region relative to the rest of the province, therefore the larger the region, the greater the travel dollars.
presence of school board staff or board members not on the audit committee. Does the committee have the authority to speak with school board staff without the Director of Education or other members of the senior management team being present? Yes. However, staff should be encouraged to bring their manager to the meeting, unless the discussion involves the manager (e.g. allegations of fraud in upper management). Can a trustee, that is not an appointed member to the committee, attend audit committee meetings and put forward motions? All trustees may attend audit committee meetings. They should however not be active participants at the meetings in order to allow the members to carry out the items on the agenda. Is a requirement for security clearance for auditors and audit committee members? The audit committee regulation does not include security clearance requirements for members of the audit committee, internal auditors or external auditors. The requirements that should be followed are those set out by the individual district school boards. If the audit committee needed to contact a school board trustee, how the contact would be made? The school board trustee would likely be contacted by the chair of the audit committee Can you explain the responsibility of the audit committee in terms of oversight? The following analogy can be used in terms of oversight, “Noses in and hands out”. This means that the audit committee is responsible for asking probing questions on issues related to the following: financial reporting process including financial statements, internal controls, internal and external auditors, risk management and compliance matters Can you explain the difference between the budget committee and the audit committee? The budget committee generally makes recommendations to the board of trustees on the annual estimates, budget priorities, budget forecasting and expenditures. Therefore the budget committee has a more focused agenda on the budgeted
Module 2 – Assessing Risk and Risk Management Question Answer Each district school board should have a strategic business plan. What is the audit committee’s role regarding the plan, e.g. does the audit committee determine that such a plan exists; does the audit committee check that various elements have been considered? The role of the audit committee is to determine how governance risks are being managed and that a strategic business plan is in place. The audit committee would not review the sufficiency of the plan. Who sets the risk appetite for a district school School board management sets the risk appetite and communicates this to the board of trustees for review and approval. Some risks cannot be controlled (e.g. Ministry mandated areas, regulated staffing). How is decision making impacted where risks cannot be controlled? What if rules or guidelines change? For such areas, the risk is compliance related (i.e. the risk of not meeting the requirements). Management is expected to implement appropriate controls to manage the risk and to update the controls as needed when the rules and guidelines change. The role of the audit committee is to ask the appropriate questions to understand whether and how compliance risks are being managed. Is it necessary to reputational impact across all school board audit universe processes? Yes. The reputational impact of the various processes will vary from high in some instances, to low in others, and there might even be a few instances where there is no reputational impact. However, as a school board is a publicly funded organization, we anticipate that there will be some sort of reputational impact for most processes Following the completion of the risk assessment, an internal audit plan is prepared for a 3-5 year period. What is management doing in the Risk management is a continuous exercise. The risk assessment is updated annually to reflect changes that have taken place since the last risk assessment.
Can you please clarify the difference between monitoring and supervision? Monitoring is the process of conducting ongoing and periodic performance assessments of the quality of the internal control system over time. Supervision is directing and overseeing the operations of the organization. Why does the multi-year plan only cover a 5 year period? This plan is driven by two key factors: risk assessment results and internal audit resources. It describes the internal audit objectives, audit goals, a forecast of available audit hours, the planned allocation of audit hours to each type of audit and school board for a five year period given the identified risk areas and the available resources. Changes in risk or audit resources may lead to a change in the plan. Any inputs to this plan 5 years are subject to regulations changes, economics or change in perception and the weighting of the different risk factors. It is only realistic to plan for the next 5 years and update any changes as the environment or regional conditions change. Why should the committee hold regular private sessions with the internal auditors? Meetings held without management presence encourage open and honest dialogues. What happens if management disagrees with internal audit findings? Where management disagrees with internal audit findings, the first step is to have a discussion between management and the internal auditors to clarify the facts surrounding the finding. If the discussion does not result in an agreement, the RIAM should become involved. Where management still disagrees with the finding, this disagreement should be recorded in the audit report and the matter brought forward to the audit committee. The committee must have regular sessions with internal audit. Is this in addition to the three required meetings in the year? No. The session with internal audit would take place during the regularly scheduled audit committee meetings.
Reporting Standards (IFRS), and as a result move from historical costs to fair market value for tangible capital assets? goods and services to individuals and organizations as its principal activity. This description does not fit school boards as they are entities organized and operated exclusively for educational purposes. Are the amortization rates for tangible capital assets in the education sector the same for all school boards and school authorities? Yes, they follow the recommended amortization rates as set out by the Ministry of Education in the “School Board and School Authority Provincial Accounting Policies & Implementation Guide” available at this link: Is the value reported in the school board financial statements for school buildings similar to what an insurance company would determine as a value for a school building? Buildings are reported in the school board financial statements at cost. Insurance companies use replacement cost to allow school boards to replace the building in the event of fire or other damage. If the building is relatively new, the amounts should be comparable. If the building is older, the two values could be very different. What is the capital wrap up? The capital wrap up refers to the Ministry’s process of wrapping up the old capital funding model based on New Pupil Places (NPP). Under the new model funding, all major capital expenditures must be approved by the Ministry prior to any school construction or major renovations. If were qualifications in the auditor’s report where would they be located? The auditor places this paragraph immediately before the opinion paragraph in the auditor's report and uses the heading "Basis for Qualified Opinion," "Basis for Adverse Opinion," or "Basis for Disclaimer of Opinion," as appropriate. This paragraph in the auditor's report provides a description of the matter giving rise to the modification. When should the legal letter be dated? The legal letter should be dated to approximately match the date that the board of trustees approves the financial statements. Previously, the external auditors dated legal letters when they had substantially completed their audit. The new Canadian auditing standards require that the legal letter be dated as near as practicable to, but not after, the date of the auditor’s report on the financial statements.
committee. However, there are other examples of tools available, such as the AICPA Audit Committee Toolkit: Government Organizations. When will the first annual report be sent to the board of trustees? What should the audit committee report if they have not yet covered all the requirements in the regulation at that point? The first annual report should be sent to the board of trustees in the fall following the end of the school board’s fiscal year. The report should detail the tasks the audit committee has completed to date, but the audit committee is not expected to have addressed all requirements of the regulation by this point. Module 8 – Compliance Matters and Topics Compliance Question Answer Must the audit committee monitor compliance with each piece of legislation? No. It is the responsibility of the audit committee to ensure that management has mechanisms in place to monitor compliance with the significant laws and regulations affecting the school board. The audit committee will receive a general compliance report from senior administration on an annual basis stating the school board’s status on conformity with laws, rules and regulations. This sample compliance report can be accessed by following this link: Regarding the pool insurance process, is a requirement for reporting claims to the audit committee? It is recommended that such claims be reported to the audit committee for the committee’s awareness, but it is not a compliance duty specified in the regulation. Operational Review Process Question Answer
Why was information technology not part of the operational review carried out by the Ministry? The operational review process was limited in scope and focused on the following four functional areas: Governance and school board administration; Human resource management and school staffing / allocation; Financial management, and; School operations / facilities management. Due to the limited scope, not all processes could be included. How to Stay Up to Date Question Answer Will there be updated training so that best practices can be shared? The need for updated training will be reassessed once the audit committees have been in full operation for a year or two.