THE DALLES — At the Jan. 23 North Wasco County School District 21 (NWCSD) regular board meeting, district Chief Financial Officer Randy Anderson presented the district’s annual audit report for year-end 2024.
The audit was performed by Sensiba LLP for the second year. Usually, the report presentation is performed by the auditors, but Anderson said they could not be present at the meeting due to scheduling conflicts.
“Apparently, a lot of school districts meet on this particular Thursday, so they’re not available for the presentation,” Anderson said.
Anderson started off noting that the auditors gave the district’s report an unmodified opinion — its second in a row, following last year’s unmodified report for year-end 2023.
“In our opinion, the financial statements referred to above [as presented in the meeting packet] present fairly, in all material respects, the respective financial position of the governmental activities, each major fund and the aggregate remaining fund information of North Wasco County School District No. 21 as of June 30, 2024, and the respective changes in financial position thereof for the year then ended in conformity with the account principles generally accepted in the United States of America,” the report stated.
“So the audit report is, the financial statements … fairly reflect the operation of the district,” Anderson said.
He also noted that the submitted report was dated Dec. 20, 2024, which meant the district would not lose access to the State School Fund, as it was submitted to the Oregon Education Department (ODE) by the Dec. 31 deadline. “So that’s not an issue,” Anderson said.
In the presentation, Anderson pointed out findings that were noted in the audit report, including the requirement to disclose where budget appropriations were overspent. According to the report, “the district’s expenditures exceeded appropriations” in the areas of instruction, support services, enterprise and community services, capital outlay and transfers out.
He also pointed out the year-end general fund balance was a deficit due to not meeting expected enrollment numbers, resulting in the district’s state school fund balance to be reduced by $1.4 million. According to the report, expenditures in the 2024-25 budget have been reduced by the $1.5 million to offset the deficit, which the district “does not anticipate any impact to operations as a result of the reduction” or “any lasting impact to the financial stability” of the district.
Anderson also noted a prior period adjustment due to $89,000 worth of debt for services that were incurred in 2020 and 2022 that had not been recorded to paid for at the time.
“After establishing the claim as valid, the district concluded the obligation should be included in accounts payable as of June 30, 2024, with the expenditure recorded in the two prior years impacted,” the report said.
While giving the report an unmodified opinion, the auditors did identify significant deficiencies in internal control, the first being “a lack of formal secondary review controls before and during the monthly financial closing process.” Anderson explained the deficiency was due to him not initially signing off on all district journal entries and testing payroll.
“Historically, I have only done the journal entries that I make or that we discuss and make, I initial those. The routine ones that happen every day to record transactions, I haven’t verified, but I am now,” Anderson said.
Besides reviewing all journal entries and credit card transactions, the corrective action plan for the significant deficiency is for the CFO to test payroll inputs for accuracy.
A second significant deficiency was a lack of internal controls and timely account balancing in the Associated Student Body (ASB) Account Balances. The proposed corrective action plan to address the deficiency is for Anderson to “review with building level employees the importance of separation of duties and fund balance reconciliations," said the report.
“It is monumental to try to get the student body to comply with all of the internal controls remotely. We have budgetary control over the study body funds, but frankly, day to day operations happen in the schools and personnel changes … if you look, there will be something that’s not documented,” Anderson said.
The third and fourth significant deficiencies noted in the report's corrective action plan include being out of compliance with federal awards due to not consulting with private school officials “in order to provide equitable services to students attending private school in the public school attendance area.”
“We were written up for not inviting the private schools to participate in the after-school program,” Anderson said, noting that they have now done so. “Many of the federal grants have a requirement to include the private schools if they want to participate,” he said.
According to the corrective action plan, “all employees charged with federal program compliance have been instructed that private schools must receive equitable services.”
Anderson said that three out of the four corrective action plans are completed, with the corrective plan for the ASB internal controls and account balancing currently in motion. He ended the presentation noting two findings by the auditors, one in the testing of the district’s compliance with local budget law, identifying a transfer of $552,825 out of the district’s Local Program fund that was not adopted in the original or supplemental budging process. The second finding was in the testing of procurement methods, in which the district did not use a competitive method of procurement in awarding a public contract for construction management with payment to the vendor for approximately $130,000.
“It was big enough to qualify for the public contract bidding law, and we did not follow the law,” Anderson said.
Following the presentation, Director Dayna Wynn-Elledge thanked Anderson for his work, saying, “I just want to thank you for all the hard work you’ve done, because a lot of this that they’ve called us out on, you caught and advised us what was going on and made the corrections.”
With a motion by Director John Nelson, seconded by Director Dayna Wynn-Elledge, the board accepted the 2023-24 Audit Report along with the related corrective action plan. Other action items included approving the 2025-2026 budget calendar, appointing a budget committee member approving the re-adoption of a resolution transferring appropriations within various funds, approving a resolution that transferred appropriation expenditures within the NORCOR Perkins Grant, and approving the adoption of a supplemental budget and making appropriations within the Internal Services Fund.
The entire Jan. 23 School board meeting can be viewed on the District 21 Media Channel on YouTube.
Commented