Policy Statement:

Lakeway Christian Schools (LCS) is committed to providing the Board of Directors, the results of an annual financial review to ensure the integrity, accuracy, and compliance of its financial operations. This policy outlines the procedures for the annual financial review process and its importance in maintaining financial accountability.

Purpose and Frequency of Review:

• Purpose:
  • The Lakeway Board has adopted a policy to require an annual Generally Accepted Accounting Principles (GAAP) Quality review of financial statements.
  • To maintain a public trust, LCS and its employees are required to account for all money and other assets for which they are responsible. The purpose of a school review is to ensure accountability for the safekeeping and proper handling of school funds and to determine compliance with laws and board policies.
  • The external Certified Public Accountant (CPA) Firm conducting the review shall direct findings, recommendations, and other comments to the board and to the respective heads of school.
• Frequency:
  • LCS shall conduct an annual financial review as per the policy established by the Board of Directors. The annual review shall cover the fiscal year under review.

Audit Firm Selection:

• Certified Public Accountant (CPA):
  • The annual review must be prepared by a certified public accountant in good standing with the Tennessee State Board of Accountancy.
• Independent Audits:
  • When considered necessary by the Board of Directors, audits including the annual review may be performed by independent accountants. Audits may not be performed by internal staff.

Annual Financial Review Process:

• Appointment of External Auditor:
  • LCS shall engage a qualified external auditor or auditing firm, certified as a CPA in Tennessee and in good standing, to perform the annual financial review. The external auditor shall be selected based on their expertise in school financial matters and independence from LCS's financial operations.
• Scope of Review:
  • The annual financial review shall encompass an examination of LCS's financial records, transactions, and statements for the fiscal year under review. The scope of the review shall comply with applicable auditing standards and regulations.
• Audit Plan:
  • The external auditor shall develop an audit plan outlining the specific procedures, tests, and objectives of the financial review. The plan shall be communicated to LCS's finance department for cooperation and coordination.
• Financial Statement Examination:
  • The external auditor shall conduct a detailed examination of LCS's financial statements, including the balance sheet, income statement, and statement of functional expenses. This examination aims to identify any material misstatements or irregularities.
• Internal Controls Assessment:
  • The external auditor shall assess the effectiveness of LCS's internal controls related to financial reporting and compliance with relevant policies and regulations. Any weaknesses or deficiencies shall be reported.
• Compliance Evaluation:
  • The financial review shall include an evaluation of LCS's compliance with applicable laws, regulations, and financial policies. Any instances of non-compliance shall be documented.
• Audit Findings and Recommendations:
  • The external auditor shall prepare a report summarizing their findings, including any material misstatements, deficiencies in internal controls, or instances of non-compliance. Recommendations for corrective actions, if necessary, shall also be included.

Board Reporting:

• Presentation to the Board:
  • The external auditor shall present the findings and results of the financial review to the LCS Board of Directors during a designated board meeting.
• Board Review and Action:
  • The Board of Directors shall review the auditor's report and recommendations. Any necessary actions or decisions arising from the financial review shall be discussed and resolved.

Review and Revision:

This policy shall be reviewed annually to ensure its effectiveness and alignment with best practices in financial oversight. Any proposed revisions to this policy shall be presented to the Board of Directors for approval.

References:

• LCS Mission Statement
• LCS Strategic Plan
• LCS Financial Policies and Procedures
• Federal Laws, Regulations, and Standards
• Generally Accepted Auditing Standards (GAAS)