Frequently Asked Questions Of Office of Compliance Investigation
Q. What entities does this office investigate?
A. All schools receiving support or aid from federal or state appropriations can be investigated. These include public school districts, private schools for the disabled and charter schools.
Q. How are investigations initiated?
A. Investigations can be initiated by a specific complaint or by a directive from the Commissioner.
Q. Can anyone initiate a complaint?
A. Yes, any interested party can initiate a complaint, as long as it is in writing.
Q. Are complaints kept confidential?
A. All complaints are kept strictly confidential and the complainant is never identified.
Q. What types of investigations are performed by this office?
A. Examples of investigations are bidding violations, overspent budgets, financial malfeasance, criminal history compliance and allegations of conflict of interest.
Q. What are compliance investigations?
A. Compliance investigations are reviews to determine if certain state statutes are being adhered to, such as bidding and criminal history statutes.
Q. What are probable outcomes of investigations?
A. There can be a finding that the charges are unwarranted. If there are findings, in the case of a bidding violation, for example, state aid can be withheld. There can also be a referral to another agency, such as the Division of Criminal Justice and the Election Law Enforcement Commission.
Q. Can the outcome of an investigation be appealed?
A. Yes. The first level of appeal is to the Director of the Office of Compliance Investigation. The next level is to the Commissioner. The State Board of Education is the final level.
Q. What are the major responsibilities of the Internal Audit Unit?
A. The Internal Audit Unit’s major responsibilities consist of reporting on the department’s internal controls, conducting internal audits of various offices and programs functioning within the department, conducting internal investigations and coordinating audits and the resolution of audit findings by external auditors.
Q. What is the purpose of these internal audits?
A. The main purposes of these audits are as follows:
- To ensure that the offices and divisions within the department are following policies and procedures prescribed by the department;
- To verify existence and safeguarding of department’s assets; and
- To ensure that proper internal controls are in place.
Q. On what basis does the department prescribe its policies and procedures?
A. The department prescribes its policies and procedures based upon OMB Circulars originated from the New Jersey Department of Treasury and rules and regulations Of United States Department of Education.
Q. What is internal control?
A. Internal control is a process effected by the department’s management, designed to provide reasonable assurance regarding achievement of objectives in the following categories:
- Effectiveness and efficiency of operations;
- Reliability of financial reporting; and
- Compliance with applicable laws and regulations.
Q. How are audits selected?
A. Every year, during the month of April, the internal audit unit requests all managers to fill out an Internal Control Assessment Questionnaire (ICAQ). The audits are primarily selected based upon review of the answers provided in the ICAQ. Also included are the internal audits that are mandated by the New Jersey Department of Treasury at regular intervals, such as petty cash and off-system funds.
Q. What type of audits are performed by the Internal Audit Unit?
A. The Internal Audit Unit primarily conducts financial and compliance reviews of departmental accounts, financial transactions and programs.
Q. What steps are normally included in a typical internal audit?
A. A typical internal audit includes the following eight steps:
- Conduct a pre-audit survey.
- Prepare an audit program.
- Conduct an entrance conference.
- Perform audit procedures (field work) based on the audit program.
- Conduct exit conference.
- Issue a draft report.
- Issue a final report.
- Review the auditee’s corrective action plan.
Q. What are the normal components of an internal audit report and to whose attention is the internal audit report issued?
A. The normal components of an internal audit report include:
- Executive Summary.
- Summary of Findings.
- Findings and Recommendations.
- Comments and Recommendations on Internal Controls.
A draft audit report is issued to the attention of Assistant Commissioner of the division or function being audited. A final report, along with the corrective action plan, is issued to the Chief of Staff.
Q. What types of audits fall under this unit?
A.T he unit handles the following matters:
- The department’s single audit function encompasses the requirements dictated by the federal government and the New Jersey Department of Treasury, Office of Management and Budget. The unit does not actually audit financial statements for accuracy, but reviews them for proper type, format, reporting and reconciliation to grant amounts carried in the state accounting system. The unit is also responsible for collecting all financial statements, corrective action plans and other documents dictated by law.
- The Title I audit personnel audit the actual grants for compliance with the applicable law (Elementary and Secondary Education Act, Improving America’s Schools Act and No Child Left Behind) and the governing Federal Circulars (OMB A-87, OMB A-133, EDGAR) and state policy, guidance and reporting requirements.
- The Adult Basic Education/Vocational Education auditors audit the grants for compliance with state-approved budgets/spending, reporting requirements of both the state and federal governments and governing circulars and contract agreements.
- The IDEA auditors audit the state’s 163 Private Schools for the Disabled to ensure compliance with the state’s fiscal requirements for the private schools and to insure that the sending districts are getting what they are paying for in the way of service. (This is a federal program because the federal government partially funds the needs of the district through a grant.)
Q. What happens to the monies recovered by the Unit (Title I, ABE, Voc-Ed, IDEA)?
A. When the unfortunate event happens and monies are due back to the state department, the individual programs receive the money and either redistribute it to other grant recipients or send it back to the respective federal program, if there is not time to spend the money. In the IDEA program, the sending districts are notified of the refund/current year off-set that they should receive based on the audit.
Q. What is the most common result of an audit?
A. The most common result is the filing of a Corrective Action Plan to prevent the problems from happening again.
Q. Why are these audits conducted in the first place?
A. Most federal grants require some type of compliance and oversight function by the state agency that distributes the federal funds.
Q. How are audits selected?
A. The audits are selected on a rotating basis of the grant recipients and size of the amounts received. In general there is a three-to four-year lapse between audit cycles.