State audit calls for changes

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Printed Date: Nov 21 2024 at 5:03pm

Topic: State audit calls for changes

Posted By: Vivian Moon
Subject: State audit calls for changes
Date Posted: Mar 17 2016 at 5:26pm

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 http://www.journal-news.com/news/news/state-middletown-needs-to-reduce-teaching-staff/nkqbn/" rel="nofollow - - “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.

“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.”

Replies:

Posted By: VietVet
Date Posted: Mar 18 2016 at 7:44am

"“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.”"

So, we knew about this little problem in 2014, but it occurred again in 2015 and we got nailed on it again because we ignored it at the time.

Nice job.

About time for a promotion for this gentleman, right?

After all, the way it's going in the working world nowadays, a mistake by a higher position employee usually results in a promotion and a nice big raise when one screws up. Seems organizations like to promote those who allow things like this to happen.

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I'm so proud of my hometown and what it has become. Recall 'em all. Let's start over.

Posted By: middletownscouter
Date Posted: Mar 18 2016 at 10:57am

As someone who's gone through more audits at work than I care to count over the years, a finding recurring in two years can have everything to do with audit timing and isn't always a case of a finding being ignored.

The school district's fiscal year ends on 30-June. The state performed a FY2014 audit in 2015. That means that at minimum the school district was already 6 full months (50%) into FY2015 before the audit started. The journal article about the FY2014 audit was posted in early April 2015, so it was probably closer to 9 months (75%) into FY2015 before the finding was identified and reported.

When the finding is reported (a problem is identified), the corrective action is to contain the problem, identify the root cause and then implement necessary actions to ensure it doesn't happen again. In a case where it is documentation on time spent, trying to go back and create 6-9 months worth of records on time spent is at best inaccurate guesswork, and at worst straight up pencil-whipping. No value added, and a waste of taxpayer time and money. So the proper course of action is to ensure that the documentation is there from that point forward and that new controls are put in place to ensure that it remains in place. Sounds like that was done.

If the state didn't identify the problem until 3/4 of the way through the next year, there's no way it wouldn't be a finding for the next year's audit. The bigger question is was it corrected before the end of FY2015, and making sure it doesn't become a finding again in FY2016 or later. If it is still there at that point, then it is a case of a finding being ignored.

Posted By: VietVet
Date Posted: Mar 18 2016 at 11:48am

“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 districts own admission, they had a prior knowledge that this was required and therefore, an item for the audit. If they had prior knowledge of requirement, it doesn't matter when the audit occurred, they should have had it covered prior to the audit.

The issue brought forth in defense of the district seems mute. Bottom line....they dropped the ball when they were presented the rules beforehand.

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I'm so proud of my hometown and what it has become. Recall 'em all. Let's start over.