This is the fifth in a series of articles on red flags and this week’s article focuses on next steps. In most instances, time will be of the essence when potential red flags are possibly detected.
When potential red flags are detected, an initial step is to assess whether the district’s attorney on retainer should be alerted. Regardless of the need to alert the district’s attorney on retainer, it is always essential that the district’s local policies and procedures be followed when executive management pursues next steps related to more significant or impactful red flag(s). Based upon the district’s initial internal and/or external assessment, executive management then needs to assess what referral or contact should be considered as discussed in the article Internal Control Tip of Week - When Do You Refer a Matter.
For more significant or impactful red flag(s), executive management should step back and ask if outside consultants should be engaged for a management review of practices, procedures, processes and key controls, in addition to involving the district’s internal auditor, if applicable. This will help executive management better understand training needs for the office, department or select staff, in addition to other next steps that may lead to reorganization in certain scenarios. Executive management should also ask if where select key control functions should be strengthened by assigning certain key control procedures to executive management that work outside of the office or department (maybe the superintendent in a small-enrollment district), such as reviewing reconciliations of select records, reviewing financial or nonfinancial activity reports and/or approving modifications to select key record types.
Finally, always remember that an error is simply an error and there are plenty of opportunities for errors when one considers the inherent complexity of managing the numerous moving parts in a public school system (that very few individuals with no public school experience can sufficiently appreciate). Regardless, these kinds of scenarios should invariably prompt “How can the potential recurrence of the error be prevented or mitigated.” In the final analysis, if nothing changes then nothing is gained.