From Audits to Adventures: Linda’s Next Chapter Begins
After nearly 25 years of dedicated service, Linda Lindsey has announced her retirement. Throughout her career, Linda has been a steady source of guidance, wisdom, and support to colleagues across the district. Her leadership, integrity, and unwavering commitment have left a lasting mark on all who’ve had the privilege to work with her.
In the previous newsletter, we explored how to integrate ERM into routine operations. Implementing an effective ERM plan is crucial for organizational success, though it may present some challenges. This newsletter focuses on common challenges encountered during the implementation of ERM and tips to overcome these challenges.
ERM CHALLENGES and TIPS
Isolated Risk Management Practices
Tips: Foster interdepartmental communication through regular meetings and shared platforms to ensure all departments are aware of potential risks and mitigation strategies.
Inconsistent Risk Management Processes
Tips: Develop and implement a standardized risk management framework that all departments can follow, ensuring consistency & efficiency.
Difficulties in Defining/Quantifying Risk
Tips: Use advanced analytical tools and methodologies to better define and quantify risks, making planning and resource allocations more precise.
Resistance to Change
Limited Understanding of Risk:
Tips: Conduct comprehensive risk assessment workshops and training sessions to educate staff on various risk factors and their impacts.
Lack of Qualified Personnel
Tips: Invest in hiring and training programs to build a team with the necessary skills and expertise in risk management.
Challenging Regulatory Environments
Tips: Stay updated with regulatory changes through continuous monitoring and engage with legal experts to ensure compliance without diverting too many resources.
Tips: Implement change management strategies that include clear communication, training and involvement of employees in the transition process to reduce resistance and encourage adoption of new strategies.
In the next issue, we will discuss ERM with Technology/Artificial Intelligence (AI)
Client of the Quarter
During the recent audits of Third-Party Relationships, Invitations to Bid (ITB) and Requests for Proposal (RFP), Cassandra Palm, Director of Procurement and Contracting, demonstrated exceptional cooperation and support. Her thorough understanding of the district’s procurement and contracting processes, along with meticulous record-keeping, significantly streamlined the audit procedures. Cassandra was always available to provide detailed explanations and promptly supplied all requested documentation, ensuring transparency and accuracy. Her proactive approach in identifying potential issues and suggesting improvements not only facilitated a smooth audit but also contributed to enhancing the district’s procurement controls. Cassandra’s dedication and professionalism were instrumental in achieving a successful audit outcome. Congratulations!!
What are AI agents
AI agents are autonomous systems that perform tasks on behalf of users or other systems using advanced AI techniques like machine learning (ML), natural language processing (NLP), and reasoning. Unlike conventional AI, which responds to instructions, agentic AI proactively determines what needs to be done and acts to achieve specific goals. This proactive approach allows AI agents to adapt to new situations, learn from their actions, and handle complex tasks independently.
In business operations, AI agents can interpret customer requests, retrieve relevant information, and provide personalized responses without human intervention, significantly improving efficiency and reducing response times.
It is said that by 2028, agentic AI will be integrated into 33% of enterprise software applications, reflecting the growing interest and adoption of AI agents in the market.
Source: https://www.forbes.com/councils/forbestechcouncil/2025/04/15/ five-transformative-ai-technology-trends-shaping-2025/
Cybersecurity
Tip Use Secure Payment Methods
Always use secure payment methods like credit cards or trusted payment services (e.g., PayPal) when shopping online. Avoid using debit cards or direct bank transfers, as they offer less protection against fraud. Additionally, look for websites that use HTTPS (indicated by a padlock icon in the address bar) to ensure your payment information is encrypted and secure.
Principals: Fraud Prevention and Awareness Tip
To reduce fraud risk, be alert to deposits in transit dates on the monthly bank reconciliation report. The date should only be towards the end of the month and the amount should be traceable to the following month bank statement. Deposits in transit dates that are not near the end of the month or deposits in transit that are carried forward to subsequent months are red flags and should be questioned immediately.
School Internal Accounts – Excess Fund Balance
Having too much money sounds like a great problem to have but 71 schools received an audit comment during the 2023/2024 school year for having excess funds. For comparison, 51 schools received this comment during the 2021/2022 school year and 70 schools received it during the 2022/2023 school year. School Board Policy DIB (1) (c) states “funds collected each year shall be expended to benefit those students currently in school unless those funds are being collected for a specific documented purpose.” Here are some recommendations for reducing excess funds and therefore reducing the likelihood of receiving an audit comment:
1. Evaluate the need to conduct another fundraiser.
2. Reduce the price for parents and students to attend field trips or provide complimentary.
3. Spend money on campus beautification projects or student use areas.
4. If any monies are being collected for a specific documented purpose, be sure those monies are recorded in a trust account (6000 series).
Share the Good News!
We are thrilled to announce that Andy Chen has earned the Internal Audit Practitioner designation (IAP) credential from the Institute of Internal Auditors! This credential demonstrates Andy’s internal audit aptitude and foundational knowledge of the Global Internal Audit Standards. Active Internal Audit Practitioners open a new pathway to the Certified Internal Auditor® (CIA®) designation, the only globally recognized certification for internal audit practitioners around the world. Andy has worked diligently to balance work and study, successfully passing the exam on his first attempt. In addition to this remarkable achievement, Andy has been awarded two scholarships: The Central Florida Institute of Internal Auditors Inc. Scholarship and the Barb and Doug Dyson Endowed Scholarship. Andy is truly honored to receive this recognition and thankful for the continued support of his family, friends, and coworkers.
Well done! Congratulations Andy!
Hand
for That!
Summer Break Spot Program: Ensuring Nutritious Meals During Summer Break
It is estimated that organizations lose 5% of revenue to fraud each year.
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We know you’re familiar with our “There’s a Policy for That!” feature, but in this issue, we are highlighting a different initiative. As the school year ends, OCPS is committed to ensuring every child has access to nutritious meals during the summer. The Summer Break Spot program provides breakfast, lunch and snack at no cost at various locations starting in June. For more information, visit the Food and Nutrition Services department page on the OCPS website or call their team at 407.858.3110 ext. 329-2231.
Remember, there’s always a helping hand for that! There’s a Helping
Internal Control
Perform periodic spot-checks to see whether the processes, procedures and policies in your department are being followed correctly.
Segregation Duties
What is Segregation of Duties (SoD)
Segregation of Duties (SoD) is a key internal control mechanism designed to prevent errors and fraud within an organization. It involves distributing responsibilities among different individuals or departments to ensure that no single person has control over all aspects of any critical business process. Implementing SoD helps organizations maintain integrity, reduce risks, and comply with regulatory requirements. Additionally, SoD fosters a culture of trust and collaboration among team members.
Importance of Segregation of Duties
Risk Reduction: By distributing tasks, the risk of errors and fraud is minimized. No single individual has the opportunity to both perpetrate and conceal errors or fraudulent activities.
Checks and Balances: It creates a system of checks and balances, ensuring that different individuals can review and verify each other’s work.
Compliance: Many regulatory frameworks and standards require SoD to ensure transparency and accountability within organizations.
Enhanced Accountability: By dividing tasks among multiple individuals, it becomes easier to pinpoint responsibility for specific actions, thereby enhancing accountability.
Operational Integrity: SoD helps maintain the integrity of operational processes by ensuring that no single individual has control over all aspects of a transaction.
Fraud Detection: With multiple people involved in a process, it becomes more difficult for fraudulent activities to go unnoticed. This setup increases the likelihood of detecting and preventing fraud.
Improved Audit Trails: SoD creates a clear audit trail, making it easier for auditors to track and verify transactions and processes.
Risk Management: It is a key component of an effective risk management strategy, helping organizations to manage and mitigate risks associated with errors, fraud, and operational inefficiencies.
Examples of Segregation of Duties
Accounts Payable: One person sets up and approves new vendors, while another issues payment to those vendors. One person creates a purchase order, and another approves it.
Accounting: One individual enters a journal entry, while another approves it.
Cash Handling: One person opens envelopes containing checks, while another records the checks in the accounting system. One person deposits cash, and another reconciles the bank statement.
Inventory Management: One person handles products, while another records inventory transactions.
Payroll: One individual processes payroll, while another reconciles the payroll accounts.
Software Development: Developers write code, but a separate team is responsible for moving the code to production.
Overview of Contract Management Series in Upcoming Issues
Outsourcing to a vendor can be the ideal solution when a project requires complex or specialized knowledge. This overview covers contract management, with more details in future issues.
• Considerations before contracting a project (Details September 2025)
• Identifying potential vendors (Details December 2025)
• Preliminary vendor evaluation for data sharing (Details December 2025)
• Procurement process (Details March 2026)
• Contract/SLA period (Details June 2026)
• Renew contract (Details September 2026)
• Out of contract (Details September 2026)