Project Description

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Charleston County School District

Extending the audit scope and operational risk management of a South Carolina school district

As the second largest school system in South Carolina, Charleston County School District (CCSD) has 6,000 full-time employees that support 86 schools and more than 49,000 students. It’s a diverse district, with a blend of urban, suburban and rural facilities.

From an internal audit perspective, it’s important to note that more than 500 of those employees have procurement cards, which add up to nearly 43,000 annual transactions and US$12 million in spending. “With so many P-Card holders, we wanted to make sure that the controls are well maintained,” says Cathleen Milne, Director of Internal Audit for CCSD.

In addition to the large number of cardholders, the District’s P-Card transactions are processed through a third-party system that lies outside the CCSD Accounts Payable system. That separation increases the risk of duplicate payments, split transactions, and other undesirable scenarios.

Internal audit was managing this P-Card risk by testing paper-based samples—a process that every auditor knows can be frustrating and highly time consuming. The analysis took months, and the six-member team could only start testing after a year-end close. It was time to automate the review and cut the lag between purchase and analysis.

Enter ACL™ GRC and ACL™ Analytics Exchange.

Implementing end-to-end operational risk management

Milne and her team partnered with both Procurement and AP to identify key risks, relevant controls, and ensure new P-Card data analytics accurately assess both. They’re in the process of swapping months of paper-based sampling for an automated analysis that operationalizes risk management by catching red flags and violations in near-real time.

“Instead of going in long after the transactions are done and getting stale information,” says CCSD Senior Auditor Andrea K. Sevy, “we’re able to do the month close, run the suite of analytics, identify anomalies, clear them up faster, and take corrective action.”

Internal Audit will also pass the project over to Procurement, where management will use ACL GRC and ACL Analytics Exchange to continuously monitor the identified risks and controls and close the loop between identifying and resolving exceptions. Meanwhile, the audit team uses the new P-Card scripts for ongoing audit work—testing full data populations and adding efficiencies at every turn.

While the P-Card project was a catalyst for incorporating risk analytics at CCSD, ACL technology is not the sole domain of Internal Audit. A multi-functional team, which includes Procurement, Finance, AP, and IT, uses the collaborative cloud-based solution. Combining ACL’s data analytics and workflow, including the ACL GRC results management workflow functionality in particular, to work directly with P-Card holders as an end-to-end solution is promoting stronger teamwork across the organization.

“The whole package together is awesome,” says Milne. “Before, we were chasing paper, but now we’re assigning exceptions to the audit client and saying, ‘hey, you can now attach what we need to clear these anomalies.’”

Audit as a partner, consultant and internal resource

As more CCSD business owners learn about risk analytics, they are increasingly coming to Milne and her team with questions, like how to reconcile a tricky payroll report without manually comparing 5,000 lines of data. By loading the data into ACL, the audit team found the problem (a box that wasn’t checked) in less than two hours. It’s moments like this when internal audit becomes a sought-after partner in the district.

“We’re becoming more of a resource for other business divisions,” says Milne, adding that when analytics can turn one-off questions into repeatable monitoring tools, “and the Audit & Finance committee is seeing more value in what we do.”

Thinking globally, auditing locally

At CCSD, the risk management solution puts more ambitious projects in reach. Audit can answer both specific and big-picture questions, while partnering with business owners to find and resolve anomalies. As time goes on, the audit team will continue to implement a broad range of scheduled analytics that management can use for continuous operational risk management—freeing auditors to focus their energy where it’s needed most.

For example, instead of choosing just 10 locations per year, the CCSD team can audit all 75 schools each month and close risk gaps, such as viewing cash versus check totals for school-based deposits. These deposits don’t involve big dollar amounts, but they were the subject of a past embezzlement case—and that risk alone makes it an area worthy of close investigation. The audit team has since used ACL technology to automate the deposit analysis and transform this small test into a continuous auditing function. It’s fast, and it delivers a quick win for all the stakeholders.

Perhaps most importantly, automating risk management and closing the loop on exceptions is better serving Charleston County taxpayers. From specialized monitoring projects (like the P-Card analysis), to creating visual heat maps that identify risk and guide the audit plan, CCSD teams can ensure they’re effectively managing funds and maintaining compliance. According to Milne, “our capabilities are limitless.”

charleston-county-acl-case-study

Charleston County School District (CCSD) is the second largest school system in South Carolina representing a unique blend of urban, suburban, and rural schools that span 1,000 square miles of coastal lands. CCSD serves more than 49,000 students in 86 schools and several specialized programs. CCSD offers a diverse, expanding portfolio of options—including neighborhood, charter, magnet, IB (international baccalaureate), and Montessori schools—and is divided into elementary and early, middle, and secondary Learning Communities, each led by an associate superintendent. With approximately 6,500 employees district-wide, CCSD is the fourth largest employer in the region.

Products in use:

ACL GRC

ACL Analytics Exchange

"The whole package together is awesome. Before, we were chasing paper, but now we’re assigning exceptions to the audit client and saying, ‘hey, you can now attach what we need to clear these anomalies."

Cathleen Milne

Director of Internal Audit, CCSD

“Instead of going in long after the transactions are done and getting stale information, we’re able to do the month close, run the suite of analytics, identify anomalies, clear them up faster, and take corrective action.”

Andrea K. Sevy

Senior Auditor, CCSD

Customer-Advocate-Andrea-Sevy