Audit Finding Information

The state audit for the School District is available. The district has some findings. Some of these findings could use some context and brief explanation.  

Findings 2024 -003 and 2024-007 deal with a retainage account being opened for the construction of the new high school.

As we said in our response to the audit, this was a USDA loan, and we were following USDA rules. Because the entire project was governed by the USDA, we believed in good faith that federal rules applied to our portion of the cost.

Finding 2024-004 deals with submitting a budget as the “original” budget or “amended” budget in our finance software. Lewis County Schools budget was approved by the School Board and County Commission. Later in the year, our state grant funds began to be released to the district. When the state grant funds were received, the district simply entered the original budget transaction instead of an amended budget transaction in the software. This was an easy correction and can be avoided in the future.

Finding 2024-005 deals partly with documentation and invoicing of received goods. The district was cited for our MLEC monthly bill and our monthly Highland Oil invoice. It was stated that we should sign our monthly invoice. As far as we can see, this has never been required before. However, this is something we can do moving forward.

Some other examples relate to counting and verifying materials received and signing the packing slips to verify delivery. The district was told this is no longer sufficient. The district should sign the invoice rather than the packing slip for verification.

Item D deals with purchasing copy paper. The district had funds left over from ESSER and teachers stated they needed more copy paper. We ordered around $31,000 in paper for the schools. The district felt that since this is only one item (paper) and that we needed several boxes, we ordered the paper. Moving forward we can seek bids on purchasing paper if it is going to cost more than $25,000.

Finding 2024 -006 deals with reconciling with the Trustee. The district has had numerous conversations with the Local Government Software and auditors about a reoccurring issue where the district is not balanced with the Trustee. The district was advised to create a separate spreadsheet to verify that we are reconciled with Eplan. The district did as was recommended and we reconciled month after month with our Eplan. The district posed the question to the auditors to see if it was possible that the error was on the Trustee side, and they said yes it is possible. They added that it was our responsibility to balance with the Trustee. The districts Local Government representative recommended that we ask the Trustee for “Read Only” access to verify with our software. The district was not given permission. The district is happy to provide “Read Only” access of our software if it could expedite finding the issue between the school amounts and the Trustee’s amount. The district has acted on every recommendation provided to us.

Finding 2024-008 deals with liabilities. It is important for a quick history of the finance department. The former finance director and payroll director resigned in late April of 2023. New employees were hired. Fiscal year 2024 started two months later on July 1^st, 2023. There were liability reports that were reconciled incorrectly due to lack of training. Training was provided and the issues have been corrected.

Finding 2024-009 is similar to the previous finding.

Finding 2024-010 deals with the use of journal entries. We were critiqued for too many journal entries, but journal entries are an accepted practice to explain the details of transactions that might otherwise escape attention. We use journal entries in an effort to increase transparency and this office remains committed to that practice.

I understand that 8 findings look like a lot. I believe some of these findings could not be avoided because the district is following the USDA contract to build the new high school. Also, I am very proud of the hard work of the central office staff to take on such a large job in a short amount of time!

Our goal is to follow the example set by the Mayor's Office in improving audit findings. The County reduced its findings from seven last year to just two this year. As a school system, we are committed to making similar progress and continually improving.

Finally, I would welcome anyone who wants to discuss these findings to drop by the central office or call any time.

All the best,

Tracy McAbee