FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
PAYROLL COSTS NOT PROPERLY ALLOCATED
The Regional Office of
Education #41 did not allocate payroll based on time spent working on each
grant. Rather, payroll was allocated
based on the grant budget and work completed.
Based on allowable cost
principles, payroll costs of each employee who works for more than one grant
must be allocated to each individual grant based on the amount of time spent
on each grant. (Finding 04-1, page 12)
The Regional Office of
Education #41 agreed with the recommendation to allocate payroll costs based
on time spent on each grant.
UNRECORDED PAYABLES AND RECEIVABLES
The Regional Office of
Education #41 did not properly record the entries necessary to reflect
payables and receivables for the current and prior year. The Regional Office did not maintain
subsidiary records of accounts receivable, accounts payable, and deferred
revenue. Accordingly, the Regional
Office of Education’s general ledger did not agree to the audited financial
statements. Adjusting entries were
required as part of the 2004 year end audit to account for the receivables
and payables at June 30, 2003 and 2004.
Accounting principles
generally accepted in the United States of America require government-wide
financial statements to be prepared on the accrual basis of accounting and
the fund financial statements to be prepared on the modified accrual basis of
accounting. (Finding 04-2, page
13) This finding is repeated
from our 2003 audit.
The Regional Office of
Education #41 agreed with the
recommendation, stating that accurate records will be maintained that
reflect receivables and payables at the end of each year. (For previous
Regional Office response, see Digest Footnote #1.)
BANK RECONCILIATIONS
Although the Regional Office of
Education #41 reviewed bank statements monthly for outstanding items, they
were not reconciled to the general ledger until the end of the year. Numerous adjusting entries were required
at the end of the year to balance the bank reconciliation with the general
ledger.
Bank reconciliations should be completed on a monthly
basis and reconciled to the general ledger.
(Finding 04-3, page 14) This
finding is repeated from our 2003 audit.
The Regional Office of Education #41 accepted the
recommendation to have an individual, other than the person preparing the
bank reconciliations, verify that the bank reconciliations have been properly
prepared, and formally approve them.
(For previous Regional Office response, see Digest Footnote #2.)
INACCURATE EXPENDITURE REPORTS FILED
The expenditure report for various
grants for the grant period ending June 30, 2004 did not agree with the
actual amounts expended as shown on the general ledger. The net difference for 4 programs amounted
to $41,161 more expenditures on the general ledger than on the grant
expenditure reports.
Grant expenditure reports filed with
the State should agree to general ledger totals. (Finding 04-4, page 15)
This finding is repeated from our 2003 audit.
The Regional Office accepted the
recommendation stating it will correct the expenditure reports and reconcile
the program administrative records to the general ledger. (For previous
Regional Office response, see Digest Footnote #3.)
OTHER FINDING
The
remaining finding is reportedly being given attention by Regional Office of
Education #41. We will review
progress toward the implementation of our recommendations during the next
audit.
AUDITORS’ OPINION
Our auditors state the Regional Office
of Education #41’s financial statements as of June 30, 2004 are fairly
presented in all material respects.
_____________________________________
WILLIAM
G. HOLLAND, Auditor General
WGH:JRB
SPECIAL ASSISTANT AUDITORS
Our special assistant
auditors were J.W. Boyle & Co., Ltd.
DIGEST
FOOTNOTES
#1: UNRECORDED PAYABLES AND RECEIVABLES MATERIAL TO FINANCIAL
STATEMENTS -- Previous Regional Office Response
In
its prior response in 2003, the Regional Office accepted the finding and
stated it will maintain accurate records that will enable it to post
necessary entries to reflect the receivables and payables at year-end.
#2: BANK RECONCILIATIONS WERE NOT
RECONCILED TO THE GENERAL LEDGER TIMELY --
Previous Regional Office Response
In its prior response in 2003, the Regional Office accepted the finding stating the
Accounting Assistant would be doing the bank reconciliations and the Head
Accountant would verify that all reconciliations are balanced and accurately
reflected on the general ledger. The
Assistant Regional Superintendent would ensure all reconciliations are
correctly performed and balanced.
#3: INACCURATE GENERAL LEDGER --
Previous Regional Office Response
In its prior response in 2003, the Regional
Office accepted the finding stating the Regional Office would provide
leadership to assure that the revenues and expenditures per the general
ledger agreed with the granting agency.
Complete Regional Office responses to prior findings are available
upon request from the Auditor General’s Office.
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