State of Hawaii Department of Education

State of Hawaii Department of Education

INTERNAL AUDIT PLAN QUARTERLY UPDATE THROUGH SEPTEMBER 30, 2018

FOR AUDIT COMMITTEE MEETING November 1, 2018

This report is prepared solely for the internal use of the Audit Committee and management of the State of Hawaii, Department of Education.

AUDIT COMMITTEE QUARTERLY UPDATE REPORT

SECTION

TABLE OF CONTENTS

Executive Summary (First Quarter (Q1) of Fiscal Year (FY) 2019) ---------------------------------------------------------------------

Summary of Proposed Changes to the Audit Plan ----------------------------------------------------------------------------------------

Management Action Item Dashboard Summary ------------------------------------------------------------------------------------------

Fraud & Ethics Hotline Summary: FY 2017 through Q1 of FY 2019 ------------------------------------------------------------------

Appendix

Audit Observation Rating Scale Definitions -----------------------------------------------------------------------------------------

Management Action Item Dashboard Detail and Internal Audit Recommendations Status --------------------------

Construction Process and Internal Controls Follow-Up Review ------------------------------------------------------------

Equipment and Fleet Maintenance Follow-Up Review ----------------------------------------------------------------------

School Food Services Follow-Up Review -----------------------------------------------------------------------------------------

Fixed Assets Management Review ------------------------------------------------------------------------------------------------

Payroll Review --------------------------------------------------------------------------------------------------------------------------

Observation Analysis of Completed Reports ----------------------------------------------------------------------------------------

Audit Plan Results Summary: July 1, 2018 through September 30, 2018 ----------------------------------------------------

PAGE 1 3 4 6

A A1 ? A5

A1 A2 A3 A4 A5 B C

AUDIT COMMITTEE QUARTERLY UPDATE REPORT

Executive Summary

Assurance Projects:

Student Information System Post-Implementation Review Project began in late March 2018. The review is currently in the reporting stage and is targeted for issuance in October 2018.

Post-Investigation ? Decision Making Process Audit Project began in July 2018. However, due to the issuance and implementation of the new Investigation Manual, this audit will move to the watchlist, pending approval.

School Based Reviews Internal Audit (IA) performed two (2) Student Activity Fund Reviews and two (2) School Monitoring Reviews, and provided internal control consultation to various schools/offices during the Quarter.

Consulting, Monitoring, Fiscal Reviews, and Other Projects:

Monitoring Based on Management Action Plans IA followed-up on management's action plans to the observations noted in the completed reviews. (Refer to Appendix A for details.)

Fiscal Reviews IA was involved in several unanticipated fiscal reviews during the Quarter.

Fraud and Ethics Hotline ? Confidential Reporting Mechanism IA continued to coordinate and monitor the assignments of the cases received from the Fraud and Ethics Hotline.

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AUDIT COMMITTEE QUARTERLY UPDATE REPORT

Executive Summary (continued)

Consulting, Monitoring, Fiscal Reviews, and Other Projects (continued): Standard Practice Project

IA followed up with the Office of Superintendent on the status of the Standard Practice (SP) project. Currently, the SP project is in various stages. Most offices are in the process of drafting and updating their SPs and some offices have had their SPs reviewed by the Department of the Attorney General and are now making corrections. Currently, an internal worksite has been established on the intranet to automate the process as well as providing standardized templates. Approximately 176 SP drafts have been updated to the new intranet worksite using the new templates. Upon approval, they will be posted to the public website. As of September 2018, they have published 24 SPs to the public site. Older procedures have been posted but a disclaimer has been added to indicate that items are subject to change.

Other Matters Impacting the Internal Audit Office during the Quarter IA began coordinating and assisting KKDLY LLC with the "Annual Financial and Single Audit FYE 6/30/18."

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