BLOUNTVILLE — The state’s yearly audit of Sullivan County’s funds, for the fiscal calendar year that ended June 30, 2021, is not fantastic when it arrives to how the county’s faculty procedure was holding its textbooks.
The audit features 8 conclusions, all associated to university system funds. Audit officials mentioned school program personnel stopped accomplishing items they had been performing, even nevertheless they remained their accountability.
Tennessee Comptroller of the Treasury Jason Mumpower explained to the Periods News on Wednesday that he would like the community to recognize the lousy audit displays the earlier and not the existing or foreseeable future economical photo of the county.
As of July 1, 2021, the county’s finance section commenced handling the university system’s accounting. The consolidation of what had been different accounting places of work for the school procedure and the rest of county govt arrived just after the Tennessee Standard Assembly accredited a personal act requested by the Sullivan County Commission.
It was known for months ahead of time that the county finance section would be taking in excess of the faculty system’s accounting.
Mumpower said as significantly as just about anything, the eight detrimental results had been the end result of “animosity and challenging feelings” from college method officers.
“It’s unlucky the college technique shut down on some of its money duties and wasn’t as cooperative as it could have been,” Mumpower. “This is why consolidation was desired. The individuals of Sullivan County really should not be discouraged. The final results will be much better in upcoming year’s audit.”
The Moments News asked Director of Colleges Evelyn Rafalowski if she had any response to Mumpower’s feedback.
Rafalowski reported she would merely stand on written responses she and Assistant Director of Schools Ingrid DeLoach submitted to auditors and integrated in the audit.
Information in the 8 conclusions assortment from the school program not maintaining observe of its payroll to the extent it was paying previous workers for up to four months right after they’d remaining the technique, to capital property, net of accumulated depreciation, obtaining been understated by approximately $20 million.
The 8 results:
1) Faculty office funds essential material audit adjustments for correct fiscal statement preparing. (A material weak spot.)
2) Deficiencies were observed in the maintenance of capital asset data. (A substance weak point.)
3) The accounting information for different funds had not been managed adequately. (A considerable deficiency.)
4) The faculty division had deficiencies in funds operations.
5) The college division unsuccessful to request reimbursement for grant expenditures on a well timed foundation, ensuing in a deficit in unassigned fund harmony in the Faculty Federal Projects Fund. (A content weak spot.)
6) The college department experienced deficiencies associated to the administration of payroll that resulted in overpayments to some staff. (A important deficiency.)
7) Economic studies were not offered to the county commission in compliance with condition statutes.
8) The school section designed payments primarily based on expired contracts for scholar transportation. (A significant deficiency.)
Sample information from auditors on each and every acquiring:
1) “At June 30, 2021, specific normal ledger account balances in the Common Objective School, School Federal Assignments, Central Cafeteria, College Advancement, and Schooling Funds Tasks funds have been not materially suitable, and audit changes totaling $3,482,566, $1,480,432, $471,663, $150,000, and $20,000,000, respectively, ended up needed for the monetary statements to be materially suitable at yr-conclusion.”
And “It is a sturdy indicator of a product weakness in inner controls if the office has ineffective controls above the servicing of its accounting information, which are made use of to put together the economical statements, together with the related notes to the economical statements. This deficiency is a final result of a absence of administration oversight.”
Response from Rafalowski and DeLoach: “We hereby concur with this getting, and we concur that audit changes had been demanded. On the other hand, some were brought on by situation further than our management. The University Advancement Fund funds was keyed into the fiscal administration technique. On the other hand, there was a glitch in the application that didn’t make it possible for it to approach by totally. Also, a lot of condition and federal grants were permitted and awarded at the close of the year and have been not keyed in due to the fact of the frenzy of exercise associated in the calendar year conclude near and the consolidation of the finance department.”
2) “Updated cash assets records ended up not created available as of January 9, 2022. The failure to effectively maintain, comprehensive, and shut accounting information on a present-day basis diminishes the usefulness of the money data as a administration software, outcomes in the loss of accounting controls, and increases the hazard that errors will not be found and corrected in a timely method.”
Since funds asset documents had not been updated considering that June 30, 2020, auditors applied alternate methods to ascertain quantities, which really should have been identified for cash belongings action in the economic statements.
“From our assessment of accounting information and school board minutes, as very well as other audit treatments, we identified that cash property, internet of gathered depreciation, had been understated by $19,455,680.”
Reaction from Rafalowski and DeLoach: “We hereby concur with this acquiring. Cash asset information ended up pulled and offered, but the closing report was not concluded till January 9, 2022. This was the outcome of the transition of duties to the freshly created consolidated finance office.”
3) “Our audit revealed deficiencies related to the administration and maintenance of the fund accounting records. These deficiencies are the final result of management’s failure to right the conclusions famous in the prior-yr audit report and the failure to put into practice their corrective motion strategy.”
Response from Rafalowski and DeLoach: “We hereby concur with this obtaining but feel some supplemental information and facts must be shared. Though the final audit log does exhibit that April, May possibly, and June 2021 ended up closed in January, 2022, right reconciliation and closure did take place timely.”
4) “These deficiencies exist because of to a deficiency of management oversight and management’s failure to keep paying out to the boundaries approved by the county commission, which resulted in unauthorized expenditures. These deficiencies have been documented in the prior-12 months audit report. Administration has beforehand offered written responses and corrective action designs to handle these deficiencies however, these deficiencies carry on to exist.”
Response from Rafalowski and DeLoach: “We hereby concur with this discovering and will perform to make sure that all spending budget amendments are approved and accounted for.”
5) “School department staff failed to request reimbursement for grant expenses relevant to the COVID-19 — Education and learning Stabilization Fund System — Elementary and Secondary Faculty Unexpected emergency Aid Fund (ESSER II) federal system on a timely foundation. Requests totaling $1,741,872 have been not submitted to the Tennessee Department of Instruction for reimbursement until finally December 8, 2021, for expenses built from the University Federal Assignments Fund from March 2021 via June 2021 as well as encumbrances superb at June 30, 2021.”
Response from Rafalowski and DeLoach: “We hereby concur with this finding. Some Elementary and Secondary University Crisis Reduction Fund grant programs had been caught up in review status by the approval procedure and would not allow for a reimbursement to arise.”
6) “Two previous university department employees notified the section that they experienced continued to obtain payroll checks for various months soon after they experienced terminated work with the division. These workers remained on the payroll for two to four months ensuing in overpayments totaling $31,033. The former workforce reimbursed the section for these overpayments. This deficiency is owing to a absence of management oversight.”
Reaction from Rafalowski and DeLoach: The human means section has been frequently featuring assistance to the finance division to identify and remedy every case. The overpayments transpired right after July 2021 and after ideal documentation had been shared with the newly founded payroll office.”
Response from Finance Director Bailey: The personnel ended up entered into the payroll technique for the 2021-22 school calendar year by the university system’s human useful resource workers. There was no system in put to avert and recognize these troubles when the Sullivan County Finance Department assumed the duty of the school payroll in August of 2021.
7) The school department’s annual economical report was not filed with the county mayor and with the county clerk to be offered to the county commission at the upcoming fee assembly after June 30, 2021, as needed by state law. In addition, quarterly studies were not submitted with the county commission, yet another necessity of condition regulation.
Reaction from Rafalowski and DeLoach: “It was our being familiar with that the county finance director would be presenting reported studies. Accessibility was requested to the economical administration technique in order to achieve this job. Entry was granted, and it was assumed those studies had been remaining offered.”
Response from Bailey: “The Sullivan County Finance Division was not dependable for publishing the financial (price range) report for the various funds of Sullivan County Educational institutions for the fiscal yr ending June 30, 2021. In addition, this workplace did not have entry to the school’s information to develop the studies for the 2021 FY.
8) The university system’s contracts with bus firms expired during the 2020-2021 school yr and in March new bids were sought. The Board of Education and learning did not award bids and the contracts had been re-bid in September. As of January 19, the university board has taken no motion on awarding any bids. The school method has ongoing producing payments to bus organizations primarily based on expired contracts, a deficiency auditors said leaves the college system open to liability.
Response from Rafalowski and DeLoach: “We hereby concur with this discovering. Contracts for student transportation are very intricate and entail weeks’ well worth of critique and negotiation. However, that wasn’t accomplished in a well timed way with the contracts that expired all through the present 12 months. The payment on expired contracts was not due to the fact of lack of energy or setting up.”