What are the points in time that internal controls should be evaluated to ensure they continue to be effective? At a minimum, executive management over financial management and operational areas should consider evaluating internal controls when one or more select events occur including:
- Change in select staff assigned to specific control functions (when select employees terminate their employment)
- Replacement or significant upgrade of finance, budget, human resource, payroll, timekeeping, position control systems or student systems
- Significant organizational restructuring
- Significant changes to state or federal law, rule, or regulations
If executive management acts to request an evaluation of internal controls, it’s essential to be proactive in addressing any ineffective controls that are disclosed. Prompt actions are crucial because, in most instances, significant internal control issues will eventually cascade to nearly all areas of the school district enterprise and will nearly universally be associated with data quality issues and funding issues. Regardless of the status of scheduling an evaluation of internal controls, executive management should closely monitor all affected areas when one or more of the events listed above occur.