BLOUNTVILLE — The state’s once-a-year audit of Sullivan County’s finances, for the fiscal 12 months that finished June 30, 2021, is not fantastic when it comes to how the county’s college procedure was trying to keep its publications.
The audit involves eight findings, all linked to faculty system funds. Audit officials stated university technique staff stopped carrying out issues they experienced been carrying out, even though they remained their obligation.
Tennessee Comptroller of the Treasury Jason Mumpower advised the Times News on Wednesday that he wants the public to understand the poor audit reflects the previous and not the present or potential financial image of the county.
As of July 1, 2021, the county’s finance section began managing the faculty system’s accounting. The consolidation of what had been different accounting places of work for the school system and the relaxation of county govt came after the Tennessee General Assembly accepted a personal act requested by the Sullivan County Commission.
It was recognised for months forward of time that the county finance department would be having around the university system’s accounting.
Mumpower explained as significantly as nearly anything, the 8 negative results were being the result of “animosity and hard feelings” from university process officers.
“It’s regrettable the college system shut down on some of its money obligations and was not as cooperative as it could have been,” Mumpower. “This is why consolidation was wanted. The folks of Sullivan County really should not be discouraged. The final results will be much better in following year’s audit.”
The Periods Information requested Director of Educational institutions Evelyn Rafalowski if she had any response to Mumpower’s reviews.
Rafalowski stated she would just stand on prepared responses she and Assistant Director of Universities Ingrid DeLoach submitted to auditors and bundled in the audit.
Facts within the eight results array from the school system not maintaining monitor of its payroll to the extent it was paying previous employees for up to four months right after they’d left the technique, to funds belongings, web of gathered depreciation, getting been understated by approximately $20 million.
The 8 results:
1) College office money required substance audit adjustments for appropriate money assertion planning. (A substance weakness.)
2) Deficiencies were famous in the upkeep of funds asset information. (A material weak spot.)
3) The accounting information for a variety of resources experienced not been maintained thoroughly. (A considerable deficiency.)
4) The faculty division experienced deficiencies in budget functions.
5) The school section failed to request reimbursement for grant expenditures on a timely basis, resulting in a deficit in unassigned fund stability in the University Federal Tasks Fund. (A material weak spot.)
6) The university office experienced deficiencies related to the administration of payroll that resulted in overpayments to some staff members. (A significant deficiency.)
7) Fiscal experiences were being not presented to the county fee in compliance with state statutes.
8) The college office produced payments dependent on expired contracts for scholar transportation. (A considerable deficiency.)
Sample facts from auditors on just about every getting:
1) “At June 30, 2021, certain typical ledger account balances in the Basic Purpose University, College Federal Jobs, Central Cafeteria, Faculty Enhancement, and Instruction Money Initiatives resources ended up not materially proper, and audit adjustments totaling $3,482,566, $1,480,432, $471,663, $150,000, and $20,000,000, respectively, were demanded for the economical statements to be materially accurate at yr-end.”
And “It is a sturdy indicator of a content weakness in inner controls if the division has ineffective controls over the maintenance of its accounting data, which are employed to get ready the economical statements, like the connected notes to the money statements. This deficiency is a outcome of a absence of management oversight.”
Response from Rafalowski and DeLoach: “We hereby concur with this locating, and we concur that audit adjustments were being essential. Nonetheless, some were being brought on by circumstances beyond our regulate. The University Advancement Fund price range was keyed into the economical administration system. However, there was a glitch in the program that did not allow it to process through absolutely. Also, numerous point out and federal grants ended up authorized and awarded at the stop of the yr and have been not keyed in since of the frenzy of activity concerned in the calendar year stop near and the consolidation of the finance office.”
2) “Updated funds assets information were not built obtainable as of January 9, 2022. The failure to thoroughly retain, entire, and near accounting documents on a existing basis diminishes the usefulness of the economical documents as a management software, final results in the loss of accounting controls, and boosts the possibility that glitches will not be identified and corrected in a timely fashion.”
Considering the fact that funds asset records had not been up-to-date considering the fact that June 30, 2020, auditors employed alternate techniques to establish quantities, which need to have been identified for capital property activity in the fiscal statements.
“From our critique of accounting data and school board minutes, as effectively as other audit procedures, we determined that capital property, net of amassed depreciation, ended up understated by $19,455,680.”
Response from Rafalowski and DeLoach: “We hereby concur with this locating. Money asset data were pulled and available, but the ultimate report was not concluded until finally January 9, 2022. This was the consequence of the transition of responsibilities to the newly made consolidated finance office.”
3) “Our audit unveiled deficiencies connected to the administration and servicing of the fund accounting information. These deficiencies are the end result of management’s failure to accurate the findings mentioned in the prior-yr audit report and the failure to employ their corrective motion program.”
Response from Rafalowski and DeLoach: “We hereby concur with this locating but believe some further information and facts ought to be shared. Though the final audit log does exhibit that April, May, and June 2021 were shut in January, 2022, good reconciliation and closure did come about well timed.”
4) “These deficiencies exist thanks to a lack of administration oversight and management’s failure to hold expending to the restrictions licensed by the county commission, which resulted in unauthorized expenses. These deficiencies have been documented in the prior-yr audit report. Administration has earlier supplied published responses and corrective motion designs to deal with these deficiencies nevertheless, these deficiencies proceed to exist.”
Response from Rafalowski and DeLoach: “We hereby concur with this getting and will function to assure that all spending budget amendments are permitted and accounted for.”
5) “School office staff unsuccessful to ask for reimbursement for grant expenditures associated to the COVID-19 — Instruction Stabilization Fund Program — Elementary and Secondary College Emergency Relief Fund (ESSER II) federal application on a timely foundation. Requests totaling $1,741,872 had been not submitted to the Tennessee Department of Training for reimbursement right up until December 8, 2021, for expenses made from the School Federal Jobs Fund from March 2021 by June 2021 furthermore encumbrances excellent at June 30, 2021.”
Response from Rafalowski and DeLoach: “We hereby concur with this finding. Some Elementary and Secondary School Crisis Relief Fund grant programs had been caught up in evaluation position as a result of the acceptance system and would not let for a reimbursement to come about.”
6) “Two previous university office workforce notified the office that they had ongoing to get payroll checks for numerous months right after they experienced terminated work with the department. These staff members remained on the payroll for two to four months ensuing in overpayments totaling $31,033. The former staff reimbursed the division for these overpayments. This deficiency is because of to a deficiency of management oversight.”
Response from Rafalowski and DeLoach: The human methods section has been regularly offering aid to the finance section to establish and cure each and every scenario. The overpayments transpired soon after July 2021 and just after proper documentation had been shared with the newly recognized payroll office.”
Response from Finance Director Bailey: The workforce were being entered into the payroll method for the 2021-22 faculty yr by the faculty system’s human source staff members. There was no system in area to reduce and determine these troubles when the Sullivan County Finance Department assumed the obligation of the faculty payroll in August of 2021.
7) The university department’s annual financial report was not submitted with the county mayor and with the county clerk to be presented to the county commission at the following commission assembly just after June 30, 2021, as expected by condition law. Also, quarterly reports were being not submitted with the county commission, yet another need of condition regulation.
Response from Rafalowski and DeLoach: “It was our comprehending that the county finance director would be presenting reported studies. Obtain was asked for to the fiscal administration process in get to accomplish this undertaking. Entry was granted, and it was assumed those reviews were getting introduced.”
Reaction from Bailey: “The Sullivan County Finance Department was not dependable for publishing the money (price range) report for the many resources of Sullivan County Faculties for the fiscal yr ending June 30, 2021. In addition, this place of work did not have obtain to the school’s documents to make the studies for the 2021 FY.
8) The college system’s contracts with bus corporations expired through the 2020-2021 faculty 12 months and in March new bids were being sought. The Board of Education and learning did not award bids and the contracts had been re-bid in September. As of January 19, the university board has taken no motion on awarding any bids. The faculty program has continued creating payments to bus businesses centered on expired contracts, a deficiency auditors mentioned leaves the faculty method open to legal responsibility.
Reaction from Rafalowski and DeLoach: “We hereby concur with this acquiring. Contracts for university student transportation are very intricate and entail weeks’ worthy of of overview and negotiation. Unfortunately, that was not concluded in a timely fashion with the contracts that expired for the duration of the current calendar year. The payment on expired contracts was not for the reason that of absence of hard work or arranging.”