Auditing Educational Instituti

Cheatsheet Content

### Introduction to Auditing Colleges Educational institutions include schools, colleges, training centers, and universities. While their main activities are similar, the audit procedures for colleges are specifically detailed. Colleges can be classified into five types based on financial support and affiliation: 1. Government colleges 2. Government-aided colleges 3. Self-financing colleges 4. Autonomous colleges 5. Private colleges The auditor must consider variations in activities and accounting practices based on the college's nature. ### General Matters for Audit 1. **Rules and Regulations:** Examine rules, statutes, and regulations of the University Grants Commission (UGC), Government, and the affiliated University. Note all provisions affecting accounts and audit. 2. **Minute Books:** Study minute books of the executive body or managing committee for sanctions and confirmations of transactions. 3. **Internal Check System:** Examine the internal check system to assess its effectiveness. ### Income Audit Points Main sources of income: fees, government grants, subscriptions, donations, investments. Auditor should note: 1. **Fees Received:** Check against student registers and carbon copies of receipt books (fee register). 2. **Advance/Outstanding Fees:** Ensure proper accounting and adjustment for fees received in advance and outstanding fees. 3. **Extra Fees:** Verify proper accounting for extra fees (laboratory, examination, sports). 4. **Irrecoverable Amounts:** Ensure irrecoverable fees, fines, and other charges are written off by authorized personnel (write off). 5. **Free Studentship/Concessions:** Verify these are duly authorized by a responsible officer (concessions). 6. **Admission Fees:** Check with the register of new entrants. 7. **Government Grants:** Verify by examining correspondence (grants). 8. **Caution Money/Securities:** Receipts should be shown on the liability side of the balance sheet. 9. **Landed Property Income:** Verify income from endowments and securities. 10. **Donations/Subscriptions:** Verify with cash book and counterfoils of receipt book. 11. **Other Income:** Vouch with proper vouchers. ### Expenditure Audit Points 1. **Salaries:** Vouch payments against salary register, cash book, pass book, and appointment letters/agreements. 2. **Salary Increases:** Check sanctions against minutes of the Managing Committee. 3. **Capital Expenditure:** Vouch as usual, ensuring necessary sanction. 4. **Internal Check System (Purchases):** Verify efficiency for purchases of provisions, linen, etc., for boarders. 5. **Stock Verification:** Verify stock of provisions, furniture, stationery, ensuring proper preservation. 6. **Reserves:** Confirm adequate reserves are maintained for contingencies. 7. **Donation Usage:** Ensure donations for specific purposes are spent accordingly. 8. **Capital vs. Revenue:** Clearly distinguish between capital and revenue income and expenditure. 9. **Cash and Bank Balance:** Verify cash in hand and bank balance as usual. 10. **Outstanding Assets/Liabilities:** Ensure these are accounted for. ### Miscellaneous Audit Points 1. **Investments (Prize Endowment Funds):** Ensure these are kept separate and not mixed with ordinary investments. 2. **Provident Fund:** Verify provident fund money is invested in securities, appearing separately on the liabilities and asset sides of the balance sheet. 3. **Taxation:** Ensure all taxes deducted at source are properly refunded. Educational institutions are usually exempt from income tax.