ELLY GRIMM
Leader & Times
USD 480 continues its streak of clean audits, according to a report at the USD 480 school board’s most recent meeting Monday evening.
“Like every year, we have audited the accompanying fund summary statement of regulatory basis receipts, expenditures, and unencumbered cash balances of the school district, as of and for the fiscal year ended June 30, 2024 and the related notes to the financial statement,” Craig Hay said. “In our opinion, the accompanying financial statement referred to above presents fairly, in all material respects, the aggregate cash and unencumbered cash balance of USD 480 as of June 30, 2024, and the aggregate receipts and expenditures for the year then ended in accordance with the financial reporting provisions of the Kansas Municipal Audit and Accounting Guide. In our opinion, the accompanying supplementary information is fairly stated in all material respects, in relation to the basic financial statement as a whole. We also previously audited, in accordance with auditing standards generally accepted in the United States of America, the basic financial statement of USD 480 as of and for the year ended June 30, 2023, and have issued our report thereon dated Dec. 20, 2023, which contained an unmodified opinion on the basic financial statement.”
Hay then briefly went through multiple parts of the audit materials.
“Early on in all these materials is the summary statement of receipts, expenditures and unencumbered cash regulatory basis for the fiscal year ended June 30, 2024, and that presents all of the major funds and summarizes the beginning unencumbered cash, receipts, expenditures and ending unencumbered cash, and you’ll see all the encumbrances and accounts payable, which gets us back to the actual cash in the fund,” Hay said. “Later on in all these materials is some general notes, and as you’ll see, the budget was exceeded with the Special Education Fund, the At Risk Fund and the Food Service Fund.”
Hay also briefly went over the district’s debt schedule.
“That presents all the outstanding debt and current year activity,” Hay said. “You’ll also see the debt service requirements for the next five years come right after that and the different groupings after that.”
As USD 480 is an entity that uses federal funds, Hay said those were also looked at as part of the audit process.
“What we do is we go through a process and select the major programs and then document the controls and test them and test the compliance of those major programs,” Hay said. “Not ALL of the federal programs are looked at with this, but the ones deemed to be major programs for the district. Some of those include the Child Nutrition cluster, Title I Income, Special Education, and the ESSER funds. We tested those four programs, and we did not identify any significant deficiencies or material weaknesses in those major programs. As defined in our letter, a deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.”
Overall, Hay said, while the district’s audit is in good shape, there are some adjustments that can be made.
“With the Activity Funds, the district has continued to make improvements in the controls and accounting for activity funds and they should continue to take the appropriate steps to strengthen controls. The following are some issues that we identified at the activity fund level the district needs to evaluate, such as some instances in which there was inadequate segregation of duties, and there were also instances in which adjusting journal entries were not approved and did not have adequate support. This is something you see just about every year, and it’s something you’ll probably continue to see simply because there are so many different students and so many different activities, and there are constant adjustments and changes that get made as time goes on,” Hay said. “As was pointed out earlier, the district also exceeded its budget expenditures in the Special Education, At Risk and Food Service Funds. Controls regarding the monitoring of expenditures should be reviewed and strengthened to ensure that expenditures do not exceed their budget, and budgets are amended when necessary. Something else we found is bank reconciliations are being prepared but the bank statement did not reconcile to the clerk's cash summary at year end, and that means controls regarding the bank reconciliations should be reviewed and strengthened to ensure the district's cash balances are reported accurately. One of the last things we noticed was the outstanding purchase orders on the clerk's cash summary did not reconcile to the outstanding purchase order detail, and that means controls regarding the outstanding purchase orders need to be reviewed and strengthened to ensure that unencumbered cash and expenditures are presented accurately on the clerk's cash summary. If those don’t all match up, that can create some issues that could have a ripple effect on other parts of the budget.”
Ultimately, the board voted to approve the 2024 audited financial statements as presented by a margin of 5-0, with board members Jesus Baeza and Kaylee Lopez absent.
