APS defends changes to audit group

The Albuquerque Public Schools Board responded to the letter from a national auditing group regarding concerns that the district is weakening its internal audit function. APS Board President Dr. David Peercy’s letter addressed concerns raised by David Jones, a city auditor in Seattle and the Advocacy Committee Chair of the Association of Local Government Auditors. […]

The Albuquerque Public Schools Board responded to the letter from a national auditing group regarding concerns that the district is weakening its internal audit function.

Albuquerque Public Schools
Albuquerque Public Schools

APS Board President Dr. David Peercy’s letter addressed concerns raised by David Jones, a city auditor in Seattle and the Advocacy Committee Chair of the Association of Local Government Auditors.

Besides addressing Jones’ concerns, Peercy also took the opportunity to question why APS has become a focus of the national group.

“I’m not sure why our internal APS organization has become a national concern of ALGA, as well as perhaps other school districts, but we do appreciate being made aware of concerns from any organization,” Peercy wrote.

NM Political Report first reported on the letter from the national organization on Monday.

Peercy’s letter was a response, point-by-point, to Jones in an attempt to clear the air. “Let me clarify some misunderstandings and misinformation that you have apparently received,” Peercy wrote.

One point of clarification Peercy offered in his letter was that APS in the only school district in New Mexico that created an internal audit department.

“We consider this a best practice and most certainly will continue to provide that Internal Audit Department function, with a more complete professional approach as well as a more cost-efficient implementation,” Peercy wrote.

The school board president also said the audit function at APS has never been fully independent given that auditors still answer to their employer — APS.

“Second, since by definition, this is an Internal Audit function, the associated implementation personnel are APS employees, and hence, must report to someone in APS and can’t be entirely ‘independent,’” Peercy wrote in his response.

Dr. Peercy went on to address other issues from the original letter from Jones.

Peercy wrote that the the audit function will not be disbanded but rather restructured and it is not due to budget constraints.

Third, to answer and/or clarify some of the statements in your letter.

“We have not disbanded the function, and budget ‘pressures’ are not the primary reason for the change, although we believe the re- organization is more cost-effective,” Peercy wrote.

He went on to explain how the new structure will strengthen the audit process.

“The Controller, who is also the director of internal audit, is a CPA who will report directly to the Superintendent, whereas before the internal audit director reported to a lower-level administrative executive,” Peercy’s letter read. “The Controller and director of the internal audit function, in addition to being a CPA, is a certified fraud examiner and has a background in independent public accounting specializing in governmental entities.”

Peercy also responded to Jones’ concern that State Auditor Tim Keller expressed his own concerns with the new auditing process.

“The State Auditor was initially also misinformed having apparently heard that the Internal Audit Department was being eliminated,” Peercy wrote.

In the letter to Jones, Peercy said APS recently met with Keller to discuss the new process.

“One specific request of the State Auditor was that the director of the internal audit function be a CPA and that is now the case,” Peercy said.

Peercy went on to reiterate that APS internal auditors never reported directly to the board and have always answered to the superintendent.

“The prior director of internal audit reported to a lower level administrative executive, but ultimately was accountable to the superintendent,” Peercy said in his letter. “The only employee of the APS Board of Education is the superintendent, so the internal audit director does not report directly to the board, as far as human resources personnel. “

In his initial letter, Jones also expressed concerns that a different department will be responding to whistleblower tips. Peercy responded by saying the move will ensure even more oversight.

“By removing the function from the internal audit department we achieve a better checks and balances system rather than having the whistle blower function located in internal audit,” Peercy said.

“Independence comes from the ethics and principles of individuals, not from assigning the role to a department,” Peercy wrote.

Keller’s office first wrote to APS regarding the changes in the audit function after an employee notified Keller’s staff that her position was being eliminated.

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