The Marlboro County School District received an unmodified clean opinion for the fiscal year 2022 audit.
But board members had questions about the two findings from the audit during the Jan. 3 meeting.
Adrienne Berg of Mauldin and Jenkins said there were two audit findings.
They were in financial closeout and reporting and cash management policy-Teacher and School Leader Incentive program.
In the first one, auditors said the internal controls were not sufficient to detect certain misstatements in the District’s year-end balances that were submitted for audit. As a result, material audit adjustments were required to properly report balances in accordance with generally accepted accounting principles. In total, audit adjustments totaling
approximately $685,000 were required across multiple of the District’s funds.
Auditors recommended the district carefully review the required year-end adjustments necessary to properly close out the fiscal year and to report all transactions in the proper period and in accordance with GAAP.
In the second finding, The TSLIP is a reimbursement-based grant. As required by the Uniform Guidance (2 CFR section
200.305(b)(3)), when non-federal entities are funded under the reimbursement method, the District is required to pay for the costs for which reimbursement is requested prior to the date of the reimbursement
request. Internal controls were not sufficient to ensure unspent funds were returned in a timely fashion,
resulting in the district drawing down grant funds before expenditures had occurred. We recommended finance and management should be familiar with all aspects of the Cash Management Policy and ensure that it meets the requirements of the Uniform Guidance.
The auditors gave three recommendations. One was for bank account reconciliations.
In the audit, it was noted Monthly bank account reconciliations are the primary internal
control procedure relating to the district’s cash accounts. During the fiscal year 2022, bank account
reconciliations were prepared; however, the accounts were not completely reconciled. As of June
30, 2022, there was an unreconciled difference ranging from $700 to $17,000, in two (2) of the
District’s accounts. Although these amounts are not material to the financial statements (and thus
no audit entry was required), it may obscure significant but offsetting items (such as bank errors or
improperly recorded transactions) that would be a cause for investigation if the items were
apparent. We recommend that the District take steps to perform complete bank reconciliations
each month, which includes addressing any unreconciled amounts by investigating them and posting corrections in the general ledger as necessary so that these amounts are not allowed to
carry over from month to month.
The second recommendation was about credit cards.
During our testing of disbursements with District issued credit cards, we noted that
there was one cardholder who turned in receipts between 3 months and 7 months after the credit card statement was received. The District needs to make sure that all personnel using District-issued credit cards are following all policies governing the use of such cards.
The third recommendation was oversight of capital expenditures. The District needs to improve its oversight, tracking, and monitoring of its capital spending. Currently, the District has approximately $10 million in outstanding project commitments but only $8 million in remaining ESSER funding. Furthermore, several entries have been required during the last couple of
audits to transfer funds from the General Fund to the Capital Projects fund to cover project costs.
It was recommended the District review all planned capital expenditures and ensure the funding stream(s) from
which the project(s) will be paid for and are clearly identified so that as projects progress, the funding and
related expenditures can be tracked and monitored.
During her financial report, Chief Financial Officer Sharon Hubbard was questioned about the audit and why one of the findings was a repeated one.
In the previous year, $11 million in adjustments had to be made, but for the fiscal year 2022, there were less than $700,000 in adjustments.
“It was a repeat finding, but we have made great improvements,” she said. “We have implemented a checklist.”
Hubbard noted the finance department has been dealing with a short staff since June 2021.
“The volume of work that we do on a daily, weekly, monthly basis, yearly and quarterly basis, I think we do a good job. We make sure things get paid and make sure things are done.”
Board member Dr. Rippin McLeod said he would like to see the finances spot on.
Hubbard noted the fund balance since she has been with the district that the fund balance has increased tremendously due to ESSER funding and others.
The fund balance is at $14 million.
“These two findings do not define me as a person, nor does it define my department. We do a great job. We do what we need to do to get things done.”
Vice chairman Michael Toms wanted to make sure the positions were being advertised so the district wouldn’t have repeat findings.
Other business
In other business, board members:
– nominated and elected Michael Toms as vice chairman and David Flowers as secretary.
-approved the second and final reading of the BBAA-Board Member Authority and Responsibilities and BBAA-R-Board Member Authority and Responsibilities.
-approved receiving an Innovation Grant from Special Olympics in the amount of $1,400 to Wallace Elementary Middle school for the outside learning space.
-approved a $1,000 donation by Kollock Hawks Alumni of Wallace to Clio Elementary School’s food pantry on behalf of The Campbell Group.
-Received Food Service updates from Anna Chappell and Adult Education Updates from William Jorgensen.