Shelby County Schools: “making progress on righting the ship” in internal audit operations

October 30, 2015 – It is probably not uncommon for new administrators or consultants to cite failures of their predecessors. How much is valid and how much is self-promotion, or both, might be debatable.

scs-cafr-coverThe former long time internal auditor for Shelby County Schools (SCS), Melvin Burgess, was reassigned to another job at less pay within the school district during the first quarter of 2014.

Recently, Leon Pattman was hired as Chief of Internal Audit at SCS. His previous position was Chief Audit Executive/City Auditor for the City of Memphis.

Pattman, had a number of things to say about the past practices of the department at SCS and that he was “making progress on righting the ship.”

Pattman says the requirements in the Internal Audit department “were set forth to meet the floor,” meaning the minimum.  Noting that he has done peer reviews all over the country, Pattman went on to say, “[A]nd then the audit  documentation required, in my estimation, could not pass a peer review.” He said “… there were simply statements being made in audit reports I could not prove.”  Pattman says that for his six or seven weeks on the job he’s had to validate all the things that the audit department is doing and begin to retrain the way the Internal Audit staff members think.  In addition, he has asked for and gotten additional personnel from a temporary employment agency to help in finishing individual school audits by the target of November 21. He expressed confidence in meeting the deadline and also in his permanent staff. “I have good people and I anticipate that every last one of them will be – I will help them raise the level doing professional development – but they were doing things to meet what they were expected. With low expectations you get low results. So I’ve raised the expectations. So we’re going to continue to make sure that each audit report will be called adequate, sufficient, and reliable audit evidence to prove what we’re talking about.” He went on to say, “[A]nother thing we’ve done is, as opposed to putting these canned audit statements in there about what’s going on, [we’ve] told the whole story… We’ve had a lot of issues in terms of bring that audit quality level up… we’re working our way through these challenges right now to get us beyond this point where we are. And then once we get beyond this point we will begin to fully implement the new plan for how we’re going to do the next cycle of school audits which I anticipate we’re going to deliver significant quality – you’ll see the difference to be able to see what’s really going on.”

Pattman also said he will be recommending the hiring of a information technology auditor. He says he believes if SCS had had a full blown security audit … we would have known we had a vulnerability. The SCS payroll system was hacked earlier in the year and direct deposit payments for about ten employees were redirected to pre-paid cards.

After hearing reports from Pattman and newly hired Chief Financial Officer Lin Johnson, Shelby County Board of Education member Chris Caldwell, who is chairman of the board’s Audit, Budget and Finance Committee,  said he was “very encouraged, we’re very close to getting all this right.”

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