Oxford Area Community Schools recently received a “clean” audit from Plante & Moran, PLLC, that made some recommendations and gave some commendations to the district.
The audit covered the fiscal year ending on June 30, 2003. According to the report, Oxford Schools brought in a total of $32,333,076 in revenue, with 78 percent coming from state aid members, 12 percent from local and the remaining from federal and inter-district sources. The district spent $31,941,850 on expenditures with 67 percent going to instruction and support services, 21 percent to business and central services and the remaining to school and general administration and capital outlay.
With such a large percentage of the revenue coming from state funding, Oxford Schools is highly dependent upon the per pupil foundation allowance. For the 2002-2003 fiscal year, Oxford received $6,958 per pupil – well below the county average of $8,121 and Bloomfield’s high amount of $11,835.
“Oxford Schools scrutinize every dollar because you have less resources to offer the same services with,” said a representative with Plante & Moran.
The district was commended by the auditors for “proactive planning in maintaining a fund equity.” According to the report, Oxford Schools carried around $3,860,000 in fund equity or about 12.5 percent of total expenditures. This would run the district for approximately 22 school days. The state average is around 15.17 percent.
“The district has been served well by its conservative financial management and budgetary standards for the past several years,” said an August 28 summary letter from Plante & Moran.
The letter also recommended for the school district to work towards maintaining and slightly increasing the fund balance. However, Plante & Moran conceded that maintaining fund balances will be difficult “given the ‘no increase’ funding plan put in place by the state.”
One problem identified by the auditors was the untimely reconciliation of the District’s primary bank accounts. Plante & Moran found “an instance where there was a two month lag in preparation of the bank reconciliations for the primary cash accounts.” Also, an independent individual should review the items to guarantee accuracy and completeness.
Another recommendation was for the district to provide documentation of a “semi-annually signed ‘certification’” for employees funded for and working “solely on a single federal program. After discussing the requirement with district officials, the auditors were “told that steps have been taken to ensure future compliance.”
The district also lacked documentation showing its comparability status with non-Title I schools for providing general education services. The school district must present this documentation at least once every two years.
“Upon discussing this requirement, the district prepared the comparability report, which met the comparability requirements, but it was not performed in a timely manner,” stated the August 28 summary letter.
Some other items that need to be addressed by the district include:
n Making sure that an authorized individual reviews and verifies the monthly construction work billings, and evidence this procedure by initialing or signing the invoices.
n Consider adopting a policy for the use of electronic funds transfer.
n And perform random reviews of all student activity accounting locations, such as athletic or co-curricular events.
Finally, Plante & Moran recommended the district review and form any needed tools for deterring and detecting fraud. In order to help reach this end, the auditors offer several tools for school district use, and will be administering a new standard in this area.
“Effective with the district’s June 30, 2004 financial audit, auditors will apply a new auditing standard, Statement on Auditing Standard #99 – Consideration of Fraud in a Financial Statement Audit,” reads the summary letter.
In completing this segment, Plante & Moran will be reviewing a district’s process for identifying areas of potential fraud and the related controls put in place to prevent or detect it.
“Fraud prevention and detection is clearly a joint effort and it is our hope that these tools, along with a refined audit approach will aid the district in responding to the fraud concerns that seem to surround us all,” said Plante & Moran in their report.
The final audit for June 30, 2003, was presented to the board of education during the Oct. 28 regular meeting.