Audit of books of educational institutions like school, college, universities etc. or other such institutions which are engaged in the educational field is known as audit of educational institutions. Auditor should check income and expenditure account and balance sheet of such institutes in order to verify and report the true and fairness of results presented by income statements and financial position presented by the balance sheet. Generally, the methods and procedures for vouching and auditing is same even though an auditor of educational institution should perform following tasks:
1. The auditor should go through the University Act. Trust deeds and should note the rules and regulations relating to accounts. The governing body may pass resolutions from time to time in respect to accounts. A copy of minutes books should be made available to him so that he may be able to confirm whether the decision of the government body have been compiled with.
2. Auditor should obtain a copy of budget or financial statements to study of different heads of income and expenditure.
3. Auditor should thoroughly assess the strength of internal check.
4. Auditor should vouch the grant-in-aid from the government carefully.
5. Auditor should verify the receipts of monthly fees from students, from counterfoils or carbon copy of the receipts. He should also see whether cash received has been banked daily or not.
6. Other charges from the students such as examination fees, laboratory fees, fines etc. should be carefully verified.
7. Any fees received in advance should be properly adjusted.
8. The concession of fees and other charges should be duly authorised by the proper authority. Any charges becoming irrecoverable should be written off only after proper authority has recommended.
9. Any grant-in-aid or funds received for a particular purpose must be utilised for the same.
10. The donations and other subscriptions from the various authorities have been accounted for and acknowledged.
11. The income from property, investment etc., should be properly verified from the vouchers.
12. Auditor should vouch the amount of salaries paid with the Salary Register. Any increment given to an employee shall be duly sanctioned.
13. The staff provident fund should be verified and it should be seen that it is invested as per the rules.
14. The establishment expenses must be carefully vouched and it should be seen that capital expenditure has not been treated as revenue expenditure or vice versa.
15. The payment of scholarship should be verified with the receipt from students and Scholarship Register.
16. All the assets and liabilities should be properly exhibited in the balance sheet.
17. The stock of equipment, stationary, furniture should be carefully verified.
18. While making payment of staff salaries, income tax should be deducted at source and shall be duly deposited with the Income Tax Department.