Posted: 4:50 p.m. Thursday, March 17, 2016

State audit calls for changes at Middletown Schools

By Michael D. Clark

Staff Writer

MIDDLETOWN — 

Middletown School officials say an annual state audit finding three areas of problems with its financial records and procedures are already being addressed.

The audit of the city schools released Thursday by Ohio Auditor Dave Yost cited three “findings” — or areas of improper procedures — against the Butler County school system.

The audit, which covers the fiscal year ending June 30, 2015, found no instances of missing money.

Last year a performance audit by the Ohio Auditor, based on the district’s 2013-2014 finances, recommended staff reductions. The district eliminated 27 positions.

“Changes are being implemented to improve processes and controls,” said Randy Bertram, treasurer of the 6,400-student district.

The audit found two financial statement findings and one finding involving the procedures around the district’s handling of some federal funds.

The findings in the audit cited financial overstatements and understatements of a handful of programs with amounts ranging from $74,000 to $1.8 million.

Middletown Schools’ annual operating budget is $85 million.

“Throughout the year, the school district maintains its books and records on a cash basis, and at year-end, it converts its financial statements to generally accepted accounting principles,” said Bertram. “Audit adjustments to these financial statements were necessary on four occasions. Because of the necessity to make these adjustments the district received a finding.”

The second finding, said Bertram, was due to “two instances that the district was unable to provide to the auditors two electronic copies of approved payment reports” but has since installed additional accounting controls.

And the final citation was carryover from the state’s 2014 audit, said Bertram, and has been corrected.

“The district is required to maintain time and effort documentation on every employee who is paid through federal funding to verify their time spent on the grants was correct and accurate. The district failed to do this for 100 percent of these employees,” he said.

“By the time the audit for 2014 was completed and the district was aware of this requirement, the same error occurred for the 2015 audit,” he said. “The district is in compliance now and does have strong internal controls to maintain this requirement.”