STATE OF MISSISSIPPI OFFICE OF THE STATE AUDITOR PHIL BRYANT State Auditor RAMONA HILL, CPA Director, Financial and Compliance Audit Division BRENT BALLARD, CPA Director, Education Audit Section_part5 pdf

37 SUNFLOWER COUNTY SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS 38 SUNFLOWER COUNTY SCHOOL DISTRICT (This page left blank intentionally) 39 Section 1: Summary of Auditor=s Results 1. A qualified opinion was issued on the general purpose financial statements. 2. As described in Section 2 of this schedule, reportable conditions in internal control were disclosed by the audit of the general purpose financial statements. The reportable condition described in Finding 97-1 is considered to be a material weakness. 3. The audit did not disclose any noncompliance which is material to the general purpose financial statements. 4. The audit did not disclose any material weaknesses in internal control over major programs. 5. An unqualified opinion was issued on compliance for major programs. 6. The audit did not disclose any audit findings which are required to be reported under Section ____.510(a) of OMB Circular A-133. 7. The major program was Title I grants to local education agencies - CFDA #84.010. 8. The dollar threshold used to distinguish between Type A and Type B programs was $300,000. 9. The auditee did not qualify as a low-risk auditee. Section 2: Findings Relating to the Financial Statements 97-1. Finding The district did not maintain adequate subsidiary records documenting the existence, completeness and valuation of its General Fixed Assets. This lack of substantiation resulted in a scope limitation and a modified opinion in the independent auditor=s report. This finding was also reported in the 1995-1996 fiscal year audit report. Recommendation We recommend that the district maintain a complete fixed asset subsidiary ledger as prescribed in Section G of the Financial Accounting Manual for Mississippi Public School Districts. The district should also conduct an annual inventory of all fixed assets and reconcile this to the subsidiary records. 40 97-2. Finding The school district shares townships with other school districts. The state law requires that the sixteenth section revenue derived from the shared townships be divided according to the applicable percentage of educable children. Controls are not in place to adequately divide this sixteenth section revenue since the district failed to prepare a current list of educable children and file it with the applicable superintendent as required by Section 29-3-121, Miss. Code Ann. (1972). The district apportioned sixteenth section revenue using a non-current educable child count that was mutually agreed upon by the districts. Recommendation The district should develop controls to properly comply with Section 29-3-121, Miss. Code Ann. (1972). The list of educable children is required to be filed by December 31 of each year and used to properly divide all earnings from those shared townships for the subsequent twelve-month period. 97-3. Finding The following items were noted during the testing of activity fund revenues and expenditures: 1. The district did not use prenumbered receipts for a portion of the fiscal year at one of its schools. 2. Nonconsecutive receipt books were used at several schools during the year. 3. Several receipts were classified as General Fund revenues instead of being classified as Agency Fund liabilities. 4. There was no signature evidencing receipt of funds on two requests for activity fund disbursement forms. 5. One school did not use prenumbered activity fund checks for a portion of the school year. 6. Three activity fund bank statements were reconciled at June 30, 1997 to a balance other than the general ledger balance. Recommendation We recommend that policies and procedures be implemented, to the greatest extent possible, to correct the above noted weaknesses. At a minimum, the district should perform the following: 1. The district should only use prenumbered receipts and checks. 2. The receipt book should only be used in consecutive order. 3. Activity fund transactions should exhibit proper fund integrity between the General Funds and Agency Funds. 41 4. There should always be a signature evidencing receipt of funds on the request for activity funds. 5. The activity fund bank statements should be reconciled to the general ledger balance. Section 3: Findings and Questioned Costs for Federal Awards The results of our tests did not disclose any findings and questioned costs related to federal awards. . purpose financial statements. 2. As described in Section 2 of this schedule, reportable conditions in internal control were disclosed by the audit of the general purpose financial statements. The. prescribed in Section G of the Financial Accounting Manual for Mississippi Public School Districts. The district should also conduct an annual inventory of all fixed assets and reconcile this to the subsidiary. the Financial Statements 97-1. Finding The district did not maintain adequate subsidiary records documenting the existence, completeness and valuation of its General Fixed Assets. This lack of