Who is responsible for internal controls? Everyone in the organization is responsible according to their respective roles and responsibilities. Documentation of procedures and processes, and related internal controls that are regularly updated are a key to clearly defining everyone’s relative roles and responsibilities in the school district organization.
A three lines of defense perspective is a simple model to view everyone’s relative placement in an integrated system to help control risks and foster strong internal controls, according to the Institute of Internal Auditors. The first line of defense is comprised of all of the campus, departmental and operational staff that directly manage and supervise staff involved in the daily delivery of programs, services, activities and operations. The second line of defense is management assurance that is comprised of mid-level managers and executive management that collectively monitor that “things are going according to plan” in the daily activities, services, programs and operations being delivered in all areas of the school district. The second line is ultimately responsible for the design of, monitoring of and modifications of internal controls developed by and followed by front-line supervisors and managers, in addition to advising and facilitating risk management activities. The third line of defense is independent assurance that is comprised of internal audit, external audit and regulatory oversight entities in the context of select work activities that target the effectiveness of the school district’s internal controls and risk management.
The effectiveness of the three lines of defense depends upon open communication channels to ensure issues or risks involving strategies, academics, operations, finances and compliance are actively detected and communicated across the school district enterprise. As issues or risks are detected, priorities for mitigation should be promptly assessed by the district’s process to evaluate the potential likelihood of occurrence and impact to the school district organization.
Everyone has a role in helping ensure “things are going according to plan.”