Clean audit for Moffat County School District |

Clean audit for Moffat County School District

Day-to-day budget ends in the black, total liabilities in the red

— A clean audit was given to the Moffat County School District by independent auditors and helped to answer the big question — is the school district budget in the black or in the red? The answer is both.

Paul Backes of McMahan and Associates presented the preliminary audit to the Board of Education on Oct. 27 and explained that a clean audit means that “financial statements are materially correct.”

The audit confirmed that the district’s general fund for day-to-day expenditures ended $814,436 in the black with a 40 percent reserve fund; however, the tally of long-term obligations owed by the district is an eight-figure deficit.

“The liabilities of the district exceeded its assets at year-end by $15,564,622,” states the report summary and results from an increase in pension obligations and a decrease in the value of assets such as school buildings and equipment.

The balance sheet approach taken by the auditors had them reviewing the district’s assets, reconciliation of accounts and conferencing with the bank to verify data matched between the district and the bank.

“If a statement says you have $2 million in an account we verify that you have that amount. We go through all receivables and money equalizations,” Backes said. “The district had an ending fund balance $7.6 million in the bank compared to $19 million that is a 40 percent reserve, a reasonable amount.”

The company also reviewed debt, depreciating assets and other liabilities including capitol leases, buildings, bonds and retirement funds. The district hasn’t fully funded depreciation and the district’s portion of the Public Employees Retirement Fund that is growing said Backes.

“Until PERA can get to a basis where they are not increasing your contribution, every district is going backwards,” Backes said. “There will be a push to increase school obligations or issue pension obligation bonds, swapping state debt for private debt.“

Recommendations for improvements

The report provides five areas where the district could improve internal controls and day-to-day operations.

The first recommendation is that the district increases restrictions to the disbursement part of the Infinite Visions software program.

The school district has already made the recommended changes to ensure that no one individual can create venders, enter invoices, print checks with a preprinted signature or complete all processes of disbursements for payment without review from other authorized users.

The district has compensation called “Teacher for Teacher” pay to compensate teachers $25 for filling in for another teacher’s class. The auditor recommended that tracking these payments in Excel should include “a log which both teachers and the secretary would sign or initial.”

The audit uncovered a potential problem with the food service department processing cash as the “same person receipting cash has the ability to void transactions. This results in risk to the district for misappropriation of district assets.”

The auditor recommended that this process be changed and also changes to how reports from the food services director are reviewed, sign and sent to the district’s business office.

The auditor recommended that instead of using an Excel spreadsheet for capital asset tracking it should use the module available in the Infinite Visions software program so that “the District will be able to more efficiently and effectively track its changes in capital assets.”

Finally, the auditor recommended that those using the pupil activity fund should submit both a voucher and supporting invoice to “ensure only appropriate expenses are reimbursed by the district” and “that a reconciliation process between Infinite Campus and Infinite Visions be established and performed on a regular and ongoing basis.”

Once certified by the Colorado Department of Education, the final “audit goes to bond holders, bond rating agencies, the Colorado state auditor, the federal government and the school district website,” Backes said.

The preliminary audit report is available through the school district. Final audits from years prior are available on the district website.

The Craig Daily Press will alert the community when the final 2015-2016 audit report is available.

Contact Sasha Nelson at 970-875-1794 or or follow her on Twitter @CDP_Education.

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