The importance an internal audit function is very tangible and concrete to school districts that have incurred monetary penalties and refunds, as a result of noncompliance. However, the role of the internal audit function is far greater than merely attempting to minimize the potential amount of monetary penalties and refunds. The primary benefit or value should be considered in the larger context of minimizing the collective risks to all aspects of a school district’s operations and activities, also referred to as “enterprise risks.” There are a multitude of risks that can have a direct or indirect adverse impact to the school district’s potential for success in achieving its mission and vision.
Reasons why an internal audit function adds value to a school district organization, includes:
- Provide an independent, objective analysis, assessment and information on:
- Risks and barriers in achieving success in overall activities and operations;
- Key risks that deserve greater administrative attention;
- Quality of key controls related to compliance with state and federal law, rules and regulations;
- Quality of key controls related to business processes;
- Efficiencies in instructional and student support activities and operations;
- Effectiveness of programs and services in achieving strategic goals and objectives;
- Opportunities for continuous improvement;
- Provide a deterrent to and detection of fraudulent activities; and
- Help the board of trustees effectively discharge their responsibilities in respect with internal controls.
An internal audit function can also add significant value to a school district when it serves to minimize the potential for costly distractions in time and effort that can occur in addressing significant compliance or other issues, after they are flagged in a report to one or more regulatory oversight entities. In the worst case scenario, the primary focus of a school district’s executive management can be totally derailed by the time and effort required to satisfactorily respond to regulatory oversight entities and to implement corrective action plans, not to mention the damage to relationships and image in the local community.
In summary, an effective internal audit function helps ensure that "the main thing continues to be the main thing" in the eyes of school districts' administrators and board members.