Private Fund Audit Procedures

Appointment of Auditors

The person(s) appointed as auditor(s) should be someone not involved in the production of or daily administration of the fund and should be selected on the basis that they appear to the governing body to be competent to examine records and to form a view as to their completeness and accuracy.

If your school Private Fund is a registered charity and income or expenditure exceeds £100,000 in any one year, then the person auditing the accounts should be qualified to do so under the Charities Accounting Act 1993 (section 43). For more details please visit the Office of Public Sector Information.

Conduct of the Audit

Obtain details of the arrangements for authorising expenditure, and details of the accounting records and procedures, in order to plan your audit.

Record the examination procedures carried out and information supporting the conclusions reached. The working papers should include:

The governors’ minute detailing responsibilities and type of expenditure to be undertaken
Procedures carried out, including any concerns
Note on how any concerns were resolved
Schedules showing breakdown of any aggregated items
Copies of accounts and any annual report.

Compare the accounts produced with the accounting records. This should include:

Comparison of receipts and payments accounts with cash and bank records
Test checks of book entries to the final accounts
Check book entries against source documents (e.g. invoices)
Check bank statements to bank reconciliations

Review the accounting records:

Are the records up to date, readily available, & do they clearly show the financial position of the fund?
Accounting records must include details of all money received and spent; do they?
A file must be kept for any unpaid bills and amounts owed to the fund; is there one?
A list of fixed assets (e.g. equipment) - if any - must be kept; is there one?

Identify any unusual items, fluctuations and inconsistencies. Compare the accounts with those of the previous period; consider whether the money spent and received is consistent with known fund-raising activities. Seek explanations if necessary.

If the fund is a charity, do the accounts comply with the regulations on the form of charity accounts?

Review the accounts for consistency; if there have been significant changes from the previous period - e.g. a change of year-end date - this should be stated.

Produce an examiner’s report. Any substantial problems, in any area, need to be stated in the report e.g.

Have accounts been kept to a proper standard?
Do the receipts and payments accounts agree with the records kept?
Has money been spent in line with the governors/trustees instructions?
Does anything else need to be said, and have full answers been provided to all queries?

There is an obligation to report any deliberate or reckless misconduct, such as evidence of:

Theft, doubts as to the honesty of any person involved, improper payments
Gross failure to keep accounting records
Evasion of tax
Evidence of indifference or recklessness on the part of any responsible person.

How useful is this page?

[ Comment On This Page? ]

Browsealoud |