Question

INTERNAL AUDITOR – WRITING EXAMPLE / FINDING & CONCLUSION

Introduction and Background

The Internal Audit department of the XYZ College District has completed an audit of the Veterinary Technology Program (VTP), offered at Local Community College (LCC). The LCC is the only one of the four colleges of XYZ College District to offer the VTP. LCC offers Veterinary Technology both on-site and via distance-learning courses which have been accredited by the American Veterinary Medical Association (AVMA) since 1978 and the American Animal Hospital Association (AAHA). Upon completion of the Veterinary Technology Associate degree, graduates are eligible to take the Examination for Registered Veterinary Technicians (RVT) and the Veterinary Technical National Examination (VTNE). Most states also require the VTNE for credentialing as a technician.

Scope and Objectives

For the period of (BEGIN _ END DATES), ### transactions, which included prescription drugs, controlled substances, travel, and supplies, were recorded in the General Ledger; a judgmental sample of ## transactions were reviewed. The AVMA policy and procedures were tested and compared with the District policy and procedures including purchasing, the accounting and inventory of controlled substance drugs, and related hazardous materials disclosures. Site visits were conducted to review the medication inventory, which included all prescription drugs, non-controlled drugs, controlled substance drugs, and expired controlled substance drugs that are locked and secured in the pharmacy room area, and the drugs stored in the refrigerator and the barn.

The objectives of the audit were to:

• Review sampled expenses, program income, employee travel, and the sale of assets transactions to ensure that they were relevant to the VTP.

• Review the costs associated with the medical treatment of animals and related medical supplies to ensure that they were appropriate to the program.

• Review all medical supplies, prescription drugs, expired drugs, and controlled substance drugs to ensure that they were properly safeguarded against theft and/or improper use.

• Review the ordering, usage, and inventory as documented on the control substance drug logs for accuracy and completeness.

• Review the hazardous material safety data sheets (MSDS) to ensure they were properly displayed in the classrooms and laboratories.

Finding:

Question part 1: During the course of the audit, the auditor noted that the control substance drugs were not inventoried and reconciled on a regular basis. As a result :

Question part 2: Management should :

Question part 3:Based on the audit work performed :

The audit did not identify any significant or material issues, which would necessitate a more comprehensive review or follow-up monitoring, other than in the normal course of internal auditing activities by the Internal Audit Department.

Answer 1

Answer:

Question part 1: During the course of the audit, the auditor noted that the control substance drugs were not inventoried and reconciled on a regular basis. As a result:

1. Inventory accounted in books will not match with physically available stock
2. Inventory of drugs will show less in books
3. Cost of inventories consumes would not have been accounted records.

Question part 2: Management should:

1. Management shall keep control in place to account for all the inventories received t stores
2. Shall reconcile the physically available stock with that of books on regular intervals. Reconciliation statements shall be prepared. Accounting entries shall be passed for the differences identified.

Question part 3: Based on the audit work performed:

The audit did not identify any significant or material issues, which would necessitate a more comprehensive review or follow-up monitoring, other than in the normal course of internal auditing activities by the Internal Audit Department.