[FEC Chairman Louise Epstein provided this testimony to the Board of Supervisors on April 10, 2012.]
Good evening. My name is Louise Epstein, and tonight I am speaking as the chair of the Fairfax Education Coalition.
Our bipartisan coalition is dedicated to improving public involvement in the Fairfax County Public Schools and advocating for improved transparency, public engagement and accountability. Currently, our coalition includes the Fairfax Education Association, Fairfax County Federation of Teachers, FAIRGRADE, SLEEP, FairfaxCAPS, Fairfax County Association for the Gifted, Fairfax Zero Tolerance Reform and Real Food For Kids. We also have members who are active in Coalition of The Silence, the FCCPTA and school PTAs. In addition, three former Coalition members now serve on the School Board.
Everyone in Fairfax County has a vested interest in ensuring that we have excellent public schools. This requires public trust, which must be based on confidence that the school system is well-managed. An integral part of that management is the audit function, defined broadly to include both financial audits and program audits.
At your recent joint retreat, we were happy to hear about all the collaboration to provide comparable or improved services at reduced costs. FEC hopes that you also will collaborate with the School Board as it looks at revamping its Audit Committee, by sharing your knowledge about audit committee best practices and the effectiveness of having your independent auditor report to the Audit Committee.
1. Audit Committee Best Practices: The composition of an audit committee determines whether it is truly independent of management. Your audit committee does not include county employees. This structure is consistent with best practices recommended by the Government Finance Officers Association (GFOA), which are based on legal requirements for publicly-traded corporations.
In contrast, the School Board Audit Committee has two managers – the Superintendent and Deputy Superintendent – on its 4-member committee. The chief financial officer is a nonvoting participant. At meetings, staff typically outnumber School Board members.
At a recent forum, the School Board discussed plans to reevaluate its Audit Committee. One person proposed to add a third School Board member to the committee without eliminating the two managers. Other School Board members, however, have expressed interest in considering audit committee best practices and broader reforms.
We have recommended to School Board members that they consider best practices for audit committees. We hope that you will share information with them about how well your structure has worked.
2. Independent Auditors versus Internal Auditors: As a threshold matter, we hope you will share information about differences between your internal audit and your independent audit functions.
As you know, your Independent Auditor of the Board reports to your Audit Committee. He provides an unbiased view of county policies and programs. Your Office of Financial and Program Audit (OFPA) supports your Independent Auditor.
Analyses by your Independent Auditor provide comprehensive and accurate background information and data about county programs. They explicitly discuss past problems or situations where management has failed to execute your Board’s goals properly.
The School Board has nobody who serves the same function as your Independent Auditor and his staff. School Board Auditor reports focus on issues such as whether schools have procedures in place to minimize misuse of procurement cards.
Functionally, the recently-renamed School Board Auditor is comparable to your Internal Audit Office, not to your Independent Auditor of the Board.
So, who is responsible for evaluating FCPS programs? Basically, the same people who are responsible for creating and implementing those programs – the Superintendent and Deputy Superintendent.
In FCPS, the Office of Program Evaluation evaluates instructional programs.
The FCPS Office of Program Evaluation staff report to the Assistant Superintendent of the Department of Professional Learning & Accountability. She reports to the Deputy Superintendent, who reports to the Superintendent.
To conclude, the FEC is glad to see more collaboration between you and the School Board. We hope that this collaboration will be extended to audit functions. Indeed, one possibility – which would be consistent with the NY State guidelines on school board audit committees – would be for Supervisors with financial expertise to serve on the School Board Audit Committee.
Once our school system has an independent Audit Committee, we hope that the School Board also will have access to its own independent Auditor, who will be charged with evaluating programs instead of doing spot-checks to make sure that procurement card and petty cash procedures are in order.
Proposals to provide School Board members with their own staff are incorporated in the FCPS FY 2013 Advertised Budget. This need not require larger transfers from the county. FCPS could easily eliminate other central department positions to pay for an Independent Auditor and other staff to evaluate programs for the School Board. This structure works well for you, and we hope to see it also implemented for our schools.