HomeMy WebLinkAboutLate Communication - Audit Ad Hoc Meeting 10-10-2018.pdfAd Hoc Audit Committee -October 10, 2018 -Potential Audit Projects
1) Adherence to the Purchasing Ordinance
Recently, OCSD has adopted a new Purchasing Ordinance. During the adoption process,
Directors suggested that the adherence to the ordinance be audited to ensure compliance.
Staff agrees. However, as the Purchasing Ordinance was only adopted a few months ago, staff
recommends waiting for the ordinance to be in effect for a sufficient period to generate sufficient
auditable data. Staff recommends an audit one year after the adoption of the ordinance
2) Inventory Control
Auditing of inventory acquisition, inventory receiving, and inventory distribution
Currently, OCSD has approximately $8 million in inventory
While OCSD does cycle counts and review, an independent audit of the process and controls
has not been completed.
Staff believes that this would be a good area for audit for the reasons above.
Summary
There is a series of risk factors which can affect inventories, such as:
-Volume of transactions regarding acquisitions, production and sales are in general increased,
contributing in this manner to the increase of the risk of account errors occurrence;
-Sometimes special procedures are necessary for the determination of the quantity or value of
inventories, such as the appreciation of inventories assessment, performed by other experts;
-Very often, the inventories are stored in different locations, generating in this manner
difficulties both in the performance of their control for the prevention of theft or physical
degradation, as well as in the accounting of the inventories which are in transit; -Inventories
are vulnerable to the modification of the economic circumstances which can generate the
reduction of demands, sales and, consequently, application of different treatments in such
cases for their assessment;
-Inventories can be subject to certain returns (for example, packaging materials).
Sample Tasks
A) Obtaining information regarding the organization and authority levels
B) Collection of information regarding the existent controls
C) Testing/Sampling
D} Recommendations