The provision of auditing services for educational institutions in the United Arab Emirates (UAE) is essential for ensuring the efficient and effective management of resources. A financial audit evaluates the accuracy of financial statements, identifies misappropriations, and detects possible fraud. Furthermore, auditing services ensure that all government laws, regulations, and policies are being followed. However, these audits are time-consuming and can add extra stress to staff and administrators.
By seeking assistance from an experienced audit firm in Dubai, you can streamline audits and avoid making legal mistakes. Throughout the article, you’ll find tips on implementing educational audits and an analysis of different aspects of educational audits a whole.
Why are audits for educational institutes in Dubai required?
There are many reasons why educational institutions may be audited. Audits do not imply that your school or university is practising unethical practices. State and federal requirements typically require annual audits.
Since most schools, universities, or departments receive federal funding, audits often focus on how funds are spent. The audit serves as an additional means of ensuring that funds and budgets are compliant with the requirements of the state or federal government.
Additionally, schools may conduct internal audits. Students’ needs, new services, and funding can all be assessed during these audits.
What are the Taxable Services for Educational Institutions in Dubai?
While recognized educational institutions may provide the following services, they will be taxable at 5 percent :
1. The provision of goods and services to people who are not enrolled at the institute.
2. Providing goods or services other than educational materials that are not related to the educational institute’s curriculum.
3. Provision of school uniforms in accordance with the needs of the educational institution.
4. The provision of electronic devices, regardless of whether they are part of an educational program.
5. Educational institutions’ food and beverage supplies
6. A field trip or excursion that is not directly connected to the curriculum.
7. Various extracurricular activities offered by or through educational institutions.
8. Supply of Student organization membership.
Tax laws and regulations set forth by Dubai’s Department of Finance and the Federal Tax Authority must be followed by all educational institutions in Dubai. There are significant fines and penalties associated with non-compliance with these regulations.
To ensure compliance with relevant tax laws and regulations, all Dubai educational institutions should obtain professional tax advice from top audit firms in Dubai.
Expenses and income of educational institutions in the UAE
Educational institutions in the UAE receive funding from the following sources and incur a variety of expenses: In order to comply with audit procedures, the records of these translations will be required.
Main Source of Collection
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Fees for admission, tuition, examinations, and fines, etc
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Government grants for building, prizes, maintenance, etc
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Public donations
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Student deposits as security
Types of Payments / Expenses
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Cost of the examination
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Purchase and maintenance of fixtures and furniture
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Distribution of stipends and scholarships
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Expenses for stationery and printing
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Wages, allowances and provident fund contribution for teaching and non-teaching employees
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Charges for events and functions
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Sports and game-related costs
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Prizes
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magazines and newspapers
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Library books
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Medical costs
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Building maintenance and repairs
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Cost of electricity
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Audit costs and auditing fees
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Operating and maintaining a laboratory
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Laboratory equipment
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Telephone costs
Types of Audits for educational institutes in UAE
To ensure that state and federal guidelines are being followed, schools undergo internal and external audits. A curriculum audit and a security and safety audit can also be conducted at schools or districts in addition to financial audits.
External Auditing for Compliance with Federal and State Government Standards
Federal and state government standards must be adhered to, particularly when it comes to funds used for public and charitable purposes.
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An annual comprehensive financial report (ACFR) audit is a commonly used external audit in Dubai’s education sector. It promotes transparency and accountability in the management of public resources and ensures schools and districts meet stakeholders’ expectations.
The audit will be conducted by an independent auditor certified by the International Organization of Supreme Audit Institutions (INTOSAI).
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Other types of external audits may also be performed by educational institutions in Dubai, such as performance audits or program-specific audits that focus on specific aspects of the institution’s operations. Such audits provide an in-depth and targeted evaluation of the operation of the institution, as well as identify areas for improvement or non-compliance.
Internal Auditing to Evaluate Internal Procedures
A school or district’s internal audit is typically a smaller audit that addresses specific questions posed by the board of directors or the community the school serves. It is possible for an audit to concentrate on a particular program, department, classroom, or school, for instance. Audits of internal programs, budgets, and departments assist management in analyzing and evaluating these factors. Further, this process provides data that can be used to justify recommendations for schools and districts.
School or district internal audits provide a check and balance on the systems in place. Identifying areas of improvement and ensuring that funds are spent appropriately can be achieved through this method. Audits of this type can also facilitate external audits for schools or districts.
Even though internal auditing and external auditing may seem similar, it is important to keep in mind that the former is a management tool to ensure that school funds are managed effectively every day, whereas the latter assesses whether accepted management principles, practices, and legal requirements are followed when conducting financial transactions.
What are the documents required for the audit of educational institutions in Dubai?
Several documents are required when conducting an audit of an educational institution in the United Arab Emirates (UAE). It depends on the size and nature of the institution whether some documents are necessary. Generally, auditors will require the following documents:
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Plan of action for the institution, including a list of objectives and goals
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Financial statements from the past three years
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An operational and risk management policy, as well as procedures for its implementation
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A copy of the institution’s governing documents, such as the charter and articles of incorporation
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A list of the institution’s employees and their qualifications and certifications
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A list of any grants and/or funding received by the institution
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Any relevant regulatory or legal documents, such as permits or licenses
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Documentation of external audit reports from the past three years
The documents listed above are the most commonly required for an audit of an educational institution in the UAE. It is important to ensure that all documents are up-to-date and accurate to ensure that the audit process goes as smoothly as possible.
Tips to Prepare for an Educational Audit in UAE
A smooth and successful educational audit requires preparation. A workflow process should be in place and the steps outlined in advance to make the process easier. Here are five tips to help you prepare for an educational audit.
Evaluate Past Audit Recommendations:
A review of the recommendations from the last audit is recommended as a prelude to the upcoming audit. Determine what worked well, what needs to be improved, and any other observations. Assess whether your administration has implemented all recommendations. The auditor will want to know why a suggestion was not implemented during the upcoming audit.
Understand the Purpose of the Audit:
An audit’s purpose must be understood, whether it’s an audit of financial statements or a compliance audit. Analyze the audit scope, timeline, and responsibilities of the auditor. For better preparedness, ask questions ahead of time if you need additional information.
Review Reasons for the Audit with Key Members:
The reason for the audit should be discussed with anyone who will be directly affected to ease their concerns. A better understanding of the audit’s impact and how the data will be used will reduce stress.
Identify an Audit Process Coordinator:
The audit process should be overseen by one individual. The ideal candidate for this position should have experience with past audits and a thorough understanding of both legal and financial issues. As well as coordinating preparations, this individual will serve as a point of contact for any questions that may arise.
Organize Data Using Asset Management Software:
In order to ensure a smooth audit process, it is imperative that all the necessary data is presented in an easy-to-access format. Asset tracking systems can also prove useful when undergoing an asset audit or budget review. With this system, you will be able to efficiently display your assets, their usage, frequency of use, and more, enabling you to save time and make the auditor’s job easier.
To summarize, preparing for an educational audit requires careful planning and consideration. You can prepare your educational institution in UAE for an audit successfully by following these tips.
audit firms in the UAE
With the help of top audit firms in the UAE, educational institutions can get the best value for their investment and make sure that their finances are in order.
At Farahat & co., we have a team of experienced and qualified professionals to provide auditing services to educational institutions in the UAE.
Our firm is well suited to handle the complexities associated with auditing educational institutions and provide a comprehensive view of their financial performance. Furthermore, we possess the necessary tools, technology, and resources to thoroughly examine the financial statements of educational institutions and derive meaningful conclusions from them.
Our professionals provide an unbiased and objective review of the financial performance. They assess the financial position of the institution, look for any financial irregularities, and identify any areas of improvement. Furthermore, they provide an independent opinion on the accuracy and reliability of the financial statements and assess the internal control systems of the institution.
