BLOUNTVILLE — The state’s annual audit of Sullivan County’s funds, for the fiscal yr that ended June 30, 2021, just isn’t good on the subject of how the county’s faculty system was preserving its books.
The audit contains eight findings, all associated to high school system funds. Audit officers stated faculty system personnel stopped doing issues that they had been doing, despite the fact that they remained their accountability.
Tennessee Comptroller of the Treasury Jason Mumpower advised the Occasions Information on Wednesday that he desires the general public to grasp the unhealthy audit displays the previous and never the current or future monetary image of the county.
As of July 1, 2021 the county’s finance division started dealing with the college system’s accounting. The consolidation of the what had been separate accounting places of work for the college system and the remainder of county authorities got here after the Tennessee Basic Meeting permitted a personal act requested by the Sullivan County Fee.
It was identified for months forward of time that the county finance division can be taking on the college system’s accounting.
Mumpower stated as a lot as something, the eight damaging findings had been the results of “animosity and exhausting emotions” from faculty system officers.
“It is unlucky the college system shut down on a few of its monetary duties and wasn’t as cooperative because the might have been,” Mumpower. “That is why consolidation was wanted. The folks of Sullivan County shouldn’t be discouraged. The outcomes will probably be higher in subsequent yr’s audit.”
The Occasions Information requested Director of Faculties Evelyn Rafalowski if she had any response to Mumpower’s feedback. Rafalowski stated she would merely stand on written responses she and Assistant Director of Faculty Ingrid DeLoach submitted to auditors and included within the audit.
Particulars inside the eight findings vary from the college system not preserving observe of its payroll to the extent it was paying former workers for as much as 4 months after they’d left the system, to capital property, web of collected depreciation, having been understated by almost $20 million.
The eight findings:
1) Faculty division funds required materials audit changes for correct monetary assertion preparation. (A cloth weak point.)
2) Deficiencies had been famous within the upkeep of capital asset information. (A cloth weak point.)
3) The accounting information for varied funds had not been maintained correctly. (A major deficiency.)
4) The varsity division had deficiencies in finances operations.
5) The varsity division did not request reimbursement for grant expenditures on a well timed foundation leading to a deficit in unassigned fund stability within the Faculty Federal Tasks Fund. (A cloth weak point.)
6) The varsity division had deficiencies associated to the administration of payroll that resulted in overpayments to some workers. (A major deficiency.)
7) Monetary reviews weren’t introduced to the county fee in compliance with state statutes.
8) The varsity division made funds primarily based on expired contracts for pupil transportation. (A major deficiency.)
Pattern particulars from auditors on every discovering:
1) ” At June 30, 2021, sure basic ledger account balances within the Basic Goal Faculty, Faculty Federal Tasks, Central Cafeteria, Faculty Enchancment, and Training Capital Tasks funds weren’t materially appropriate, and audit changes totaling $3,482,566, $1,480,432, $471,663, $150,000, and $20,000,000, respectively, had been required for the monetary statements to be materially appropriate at year-end.”
And “It’s a robust indicator of a fabric weak point in inside controls if the division has ineffective controls over the upkeep of its accounting information, that are used to arrange the monetary statements, together with the associated notes to the monetary statements. This deficiency is a results of an absence of administration oversight.”
Response from Rafalowski and DeLoach: “We hereby concur with this discovering, and we agree that audit changes had been required. Nonetheless, some had been brought on by circumstances past our management. The Faculty Enchancment Fund finances was keyed into the monetary administration system. Nonetheless, there was a glitch within the software program that didn’t permit it to course of by way of utterly. Additionally, many state and federal grants had been permitted and awarded on the finish of the yr and weren’t keyed in due to the frenzy of exercise concerned within the yr finish shut and the consolidation of the finance division.”
2) “Up to date capital property information weren’t made out there as of January 9, 2022. The failure to correctly preserve, full, and shut accounting information on a present foundation diminishes the usefulness of the monetary information as a administration software, leads to the lack of accounting controls, and will increase the chance that errors is not going to be found and corrected in a well timed method.”
Since capital asset information had not been up to date since June 30, 2020, auditors used alternate strategies to find out quantities, which ought to have been acknowledged for capital property exercise within the monetary statements.
“From our assessment of accounting information and college board minutes, in addition to different audit procedures, we decided that capital property, web of collected depreciation, had been understated by $19,455,680.”
Response from Rafalowski and DeLoach: “We hereby concur with this discovering. Capital asset information had been pulled and out there, however the ultimate report was not accomplished till January 9, 2022. This was the results of the transition of duties to the newly created consolidated finance division.”
3) “Our audit revealed deficiencies associated to the administration and upkeep of the fund accounting information. These deficiencies are the results of administration’s failure to appropriate the findings famous within the prior-year audit report and the failure to implement their corrective motion plan.”
Response from Rafalowski and DeLoach: “We hereby concur with this discovering however imagine some further data must be shared. Whereas the ultimate audit log does present that April, Could, and June 2021 had been closed in January, 2022, correct reconciliation and closure did happen well timed.”
4) “These deficiencies exist resulting from an absence of administration oversight and administration’s failure to carry spending to the boundaries licensed by the county fee, which resulted in unauthorized expenditures. These deficiencies have been reported within the prior-year audit report. Administration has beforehand supplied written responses and corrective motion plans to deal with these deficiencies; nevertheless, these deficiencies live on.”
Response from Rafalowski and DeLoach: “We hereby concur with this discovering and can work to make sure that all finances amendments are permitted and accounted for.”
5) “Faculty division personnel did not request reimbursement for grant expenditures associated to the COVID-19 – Training Stabilization Fund Program – Elementary and Secondary Faculty Emergency Aid Fund (ESSER II) federal program on a well timed foundation. Requests totaling $1,741,872 weren’t submitted to the Tennessee Division of Training for reimbursement till December 8, 2021, for expenditures constituted of the Faculty Federal Tasks Fund from March 2021 by way of June 2021 plus encumbrances excellent at June 30, 2021.”
Response from Rafalowski and DeLoach: “We hereby concur with this discovering. Some Elementary and Secondary Faculty Emergency Aid Fund grant functions had been caught up in assessment standing by way of the approval course of and wouldn’t permit for a reimbursement to happen.”
6) ” Two former faculty division workers notified the division that that they had continued to obtain payroll checks for a number of months after that they had terminated employment with the division. These workers remained on the payroll for 2 to 4 months leading to overpayments totaling $31,033. The previous workers reimbursed the division for these overpayments. This deficiency is because of an absence of administration oversight.”
Response from Rafalowski and DeLoach: The human assets division has been regularly providing help to the finance division to establish and treatment every case. The overpayments occurred after July 2021 and after applicable documentation had been shared with the newly established payroll division.”
Response from Finance Director Bailey: The workers had been entered into the payroll system for the 2021-22 faculty yr by the college system’s human useful resource employees. There was no course of in place to stop and establish these points when the Sullivan County Finance Division assumed the accountability of the college payroll in August of 2021.
7) The varsity division’s annual monetary report was not filed with the county mayor and with the county clerk to be introduced to the county fee on the subsequent fee assembly after June 30, 2021, as required by state legislation. Moreover, quarterly reviews weren’t filed with the county fee, one other requirement of state legislation.
Response from Rafalowski and DeLoach: “It was our understanding that the county finance director can be presenting stated reviews. Entry was requested to the monetary administration system with a purpose to accomplish this process. Entry was granted, and it was assumed these reviews had been being introduced.”
Response from Bailey: “The Sullivan County Finance Division was not chargeable for publishing the monetary (finances) report for the varied funds of Sullivan County Faculties for the fiscal yr ending June 30, 2021. As well as, this workplace didn’t have entry to the college’s information to provide the reviews for the 2021 FY.
8) The varsity system’s contracts with bus firms expired throughout the 2020-2021 faculty yr and in March new bids had been sought. The Board of Training didn’t award bids and the contracts had been re-bid in September. As of January 19, the college board has taken no motion on awarding any bids. The varsity system has continued making funds to bus firms primarily based on expired contracts, a deficiency auditors stated leaves the college system open to legal responsibility.
Response from Rafalowski and DeLoach: “We hereby concur with this discovering. Contracts for pupil transportation are very complicated and contain weeks’ value of assessment and negotiation. Sadly, that wasn’t accomplished in a well timed method with the contracts that expired throughout the present yr. The cost on expired contracts was not due to lack of effort or planning.”