The objectives of school council financial audits are to provide reasonable assurance:
- over the financial activities under direct control of school councils and the financial governance and financial management of the school
- that the school financial report presents fairly, in all material respects, the school’s financial position and financial performance
- that the school’s financial report has been prepared in accordance with the financial guidelines/instructions relevant to schools’ financial reporting.
The audits are also intended to:
- provide recommendations to improve the robustness of financial governance and the management of finances, accounting and internal control systems at individual schools and on a system-wide basis.
- collect information from schools for the purposes of identifying schools’ characteristics (for profiling and to inform targeted audit recommendations).
For schools registered with the ACNC, the following audit requirements apply:
The ACNC audit requirement is based on the turnover of each entity and its classification as small, medium or large.
- Tier 1: less than $250,000 in revenue.
A tier 1 association is not required to complete an audit or review of its accounts unless:
- it is a requirement of the association’s rules that one be completed;
- it is a requirement under the terms of the association’s funding agreement or licence;
- the majority of members at a general meeting pass a resolution that an audit will be completed; or
- the association is directed to do so by the Commissioner.
- Tier 2: $250,000 to $1,000,000 in revenue.
All Tier 2 associations must have their financial reports reviewed. The process of reviewing an association’s accounts is not as detailed as the process of completing an audit. A reviewer will look over the association’s financial report and provide a statement whether anything has come to their attention which might suggest that the association’s report does not comply with the requirements of the Act. In comparison, an auditor must collect evidence relating to the association’s financial records and transactions to satisfy themselves that the report is a true and correct reflection of the association’s finances. This enables them to provide a formal opinion whether the accounts meet the relevant legal requirements.
- Tier 3: over $1,000,000 in revenue.
The Act requires all Tier 3 associations to ensure that their annual financial report is audited and a copy of the audit report is presented to the members at each annual general meeting.
It should be noted, however, that most funding bodies require an audit to be performed regardless of registration with the ACNC. It could also be prescribed in the constitution of the school.
Corporations must report under the CATSI Act according to their registered size and income and may be required to be audited. Also, many funding agreements require the grant acquittal reports to be audited.
The audit process starts with obtaining a copy of your trial balance – we then select balances and transactions to test based on the size of the balances and the risk of misstatement involved, as well as to test that your control processes work appropriately. We also do some analytical procedures to ensure it all makes sense, read your minutes of meetings and other audit procedures as required by the audit standards.
Lastly, the financial statements are signed by the Board or Committee and we issue our audit report.
At AMW, we audit over 20 schools each year. Our staff have vast experience in different types of schools, different financial accounting systems and sizes of schools.
We have detailed audit requirements checklists to assist you in your preparation and of course we are only a phone call away.
AMW came to us highly recommended and have conducted our last two audits of the college’s financials. They are highly professional and have developed a good understanding of schools and their processes. Their team are a pleasure to work with. I have no hesitation in recommending AMW to other schools for the purpose of conducting an audit and the preparation of financial statements.
The auditors had a good knowledge of how schools operated and at all times were polite and considerate towards my accounting staff. I highly commend this auditing firm.