The Independent Schools’ audit checklist for a stress-free audit

There’s a common misconception that the auditing process is a time consuming task that simply adds to the workload of a school’s finance team. When in fact, it’s the perfect opportunity to take a deep dive into your school’s financial situation and uncover any areas for improvement. 

It’s not too dissimilar to having your car serviced regularly in order to avoid any unnecessary issues. In much the same way, independent schools are required to have their financial records ‘serviced’ or checked regularly by an independent auditor who ensures everything is in order and provides insight into areas such as cash flow management and potential risk management.

Why are independent schools audited?

As a non-government school, college, charity or not-for-profit organisation, it’s a government requirement to undertake an audit and prepare and lodge financial statements that comply with the Australian Accounting Standards. This is to ensure you are meeting your obligations for receiving Commonwealth Government education grants.

The main purpose of an audit is to ensure that your school’s financial reports are in order and are a true reflection of the school’s financial position while maintaining financial transparency and accountability 

Be prepared ahead of time

The best way to ensure your audit is as stress free as possible is to be prepared ahead of time. This means getting all your financial records up to date by establishing a strong control environment and undertaking periodic internal audits to make sure things are in order before the formal auditing process happens. 

You will enjoy a more efficient audit process if you are able to provide as much information as possible ahead of time rather than leaving everything to the last minute. 

This might include preparing trial balances and account reconciliations, documenting processes and procedures and logging invoice checking and approval processes. It’s also essential to provide auditors with supervised access to all the schools systems and records so they can access the information they need with relative ease. 

Develop an understanding of what’s required

Just as it’s important to be prepared, it also pays to have a clear understanding of what’s required as part of the auditing process. This not only ensures everyone is on the same page but guarantees a stress free auditing experience. 

Some things worth considering include planning the auditors visits around staff workloads and schedules, making sure your finance team are aware of what’s expected of them and confirming exactly what the auditors need. 

This might include clarifying how often they need to be onsite, which staff members they need to spend time with and what documents they need access to.

Minimise risks throughout the year

In order to ensure there are no surprises come audit time, it’s a good idea to keep an eye on your financial situation throughout the year so you can address any potential risks as they arise and implement appropriate action before the annual audit takes place.

This includes maintaining source documents, undertaking monthly reconciliations as well as reviewing your accounts and procedures manual regularly to check they are being followed correctly.

For more information on what’s required for auditing independent schools, get in contact with our experienced audit team today.