a) The special issues that should be covered during conducting audit of educational institutions are as under:
EBooksKenyaAct 2028 (Revised) and
EBooksKenyaRules 2029 (Revised) contain following provisions with respect to audit of an educational institute. The requirements differ in the case of types of school registered under Trust Act or Company Act.
Section 13 A of
EBooksKenyaAct stipulates that the audit of the educational institution shall be done as prescribed. Rules 171 of
EBooksKenyaRules provides following with respect to auditing:
1. The headmaster (HM) shall require annual audit of school from the auditors appointed the District
2. The HM shall make available all books of accounts, records and information asked the auditor.
3. The auditors shall report to School Management Committee, District
EBooksKenyaOffice and Regional
EBooksKenyaDirectorate mentioning specified comments.
As an auditor, s/he should consider following steps in carrying out the audit of an educational institute:
1. Review of trust deed, registration documents with special attention to requirement for finance/account and audit
2. Review of minutes of the meeting of the School Management Committee or Governing Body, noting resolutions affecting accounts to see that these have been duly complied with, specially the decisions as regards the operations of bank accounts and sanctioning of expenditures.
3. Cross check names entered in the Students‟ Fee Register for each month with the respective class register and verify amount of fees and internal control system in place.
4. Check fees received comparing counterfoils of receipts granted with entries in the cash book and tracing the collections in the Fee Register.
5. Total up the various columns of the Fees Register for each month or term to ascertain that fees paid in advance have been carried forward and the arrears that are irrecoverable have been written off under the sanction of the appropriate authority.
6. Check admission fees with admission slips signed the head of the institution and confirm that the amount had been credited to capital fund, unless SMC has taken a decision in contrary.
7. See that free studentship/scholarship and concessions have been granted appropriate authorized person, having regard to standard rules.
8. Confirm that fines for late fee payments or absence, etc. have either been collected or written off under proper authority.
9. Confirm that hostel dues are recovered before student accounts were closed and their deposits have been refunded.
10. Verify rental income, if any from agreements, etc. and interest and other dividends incomes.
11. Verify government and other local authority grants with the relevant papers.
12. Identify the reasons for any expenses disallowed the authorities and future compliance thereof.
13. Assess internal control system adopted for review and realization of dues.
14. Ensure proper accounting and disclosure of deposits and other liabilities, income, reserves, expenses, etc.
15. Vouch expenses as per school rules, SMC‟s decision and Financial Administration Policies.
16. Ensure compliance with respect of disclosure of accounting policies and notes to account for any material transactions and requirement of legislations.