A recently completed audit of the finances of the Clancy School District for the year ended June 30, 2016 found serious deficits in record keeping. The problems led to overstatement of the district’s net capital assets to state education officials, unverifiable amounts in student extracurricular activity funds, and an inadequate receipting process or supporting documentation for those funds, says the audit report by the accounting firm of Strom and Associates.
According to a response to the audit prepared by the district, changes are being made, or in most cases already have been made, to alleviate the problems. While the faults found by the audit sound serious, in some of the situations accurate figures were available within the district records but not transferred correctly to some required reports. For instance, the audit found the district overstated net capital assets in a Trustees’ Financial Summary, an annual report required to the State.
Before the report was submitted to the State, the district did not update it with changes in capital assets and depreciation, even though those figures were available in the district’s capital asset spreadsheet, said auditors. In addition, purchases in machinery and equipment were incorrectly added to buildings. That meant building, land and machinery and equipment depreciation in the trustees’ report was incorrect by $2457.
There was also incorrect spreadsheet reporting of equipment, including three copiers that had been disposed of in prior years and a lack of inclusion of two copiers that were purchased in 2013, says the audit report. School officials say the spreadsheet will be updated annually and matched with the trustees’ report. According to the audit, problems in the extracurricular and student activity funds had two primary causes: the accounting software in that area crashed and no backups were available. Receipts were inadequate, “so there is absolutely no detail for receipts, making the revenue received unverifiable,” found auditors.
The district told auditors it is now making regularly scheduled accounting backups and printing relevant reports. The district also said sequentially numbered receipts are now being used and other documentation issues with the receipting process have been corrected. The complete audit report is available for public review through the district office.
