BLOUNTVILLE — The state’s annual audit of Sullivan County’s funds, for the fiscal yr that finished June 30, 2021, is not superior when it will come to how the county’s university process was retaining its guides.
The audit involves eight findings, all relevant to faculty system funds. Audit officers mentioned school procedure personnel stopped doing issues they experienced been performing, even while they remained their accountability.
Tennessee Comptroller of the Treasury Jason Mumpower informed the Times News on Wednesday that he wants the general public to recognize the bad audit displays the earlier and not the existing or long run monetary picture of the county.
As of July 1, 2021, the county’s finance office started handling the school system’s accounting. The consolidation of what had been different accounting workplaces for the college system and the rest of county government came immediately after the Tennessee General Assembly permitted a personal act requested by the Sullivan County Fee.
It was recognised for months in advance of time that the county finance section would be taking about the college system’s accounting.
Mumpower mentioned as a great deal as everything, the eight adverse results have been the result of “animosity and challenging feelings” from university system officers.
“It’s regrettable the faculty program shut down on some of its monetary obligations and wasn’t as cooperative as it could have been,” Mumpower. “This is why consolidation was necessary. The individuals of Sullivan County ought to not be discouraged. The success will be greater in next year’s audit.”
The Situations News requested Director of Educational facilities Evelyn Rafalowski if she had any reaction to Mumpower’s responses.
Rafalowski reported she would merely stand on composed responses she and Assistant Director of Colleges Ingrid DeLoach submitted to auditors and provided in the audit.
Information within the eight findings selection from the school program not keeping monitor of its payroll to the extent it was having to pay previous personnel for up to four months soon after they’d remaining the system, to cash property, net of accumulated depreciation, getting been understated by practically $20 million.
The 8 findings:
1) College department cash necessary material audit changes for appropriate money statement preparing. (A materials weak point.)
2) Deficiencies ended up observed in the maintenance of funds asset information. (A material weak point.)
3) The accounting records for various resources experienced not been managed effectively. (A major deficiency.)
4) The school department had deficiencies in spending plan operations.
5) The college department failed to request reimbursement for grant expenditures on a well timed foundation, ensuing in a deficit in unassigned fund stability in the University Federal Tasks Fund. (A substance weakness.)
6) The university division had deficiencies associated to the administration of payroll that resulted in overpayments to some employees. (A substantial deficiency.)
7) Economical studies were not presented to the county commission in compliance with state statutes.
8) The faculty section created payments primarily based on expired contracts for student transportation. (A sizeable deficiency.)
Sample facts from auditors on every single acquiring:
1) “At June 30, 2021, specific general ledger account balances in the Common Objective School, School Federal Jobs, Central Cafeteria, Faculty Improvement, and Education and learning Money Initiatives resources were not materially right, and audit changes totaling $3,482,566, $1,480,432, $471,663, $150,000, and $20,000,000, respectively, ended up demanded for the economic statements to be materially right at calendar year-end.”
And “It is a sturdy indicator of a product weak point in inner controls if the department has ineffective controls about the maintenance of its accounting records, which are utilized to get ready the money statements, like the similar notes to the fiscal statements. This deficiency is a consequence of a absence of management oversight.”
Response from Rafalowski and DeLoach: “We hereby concur with this discovering, and we agree that audit changes ended up necessary. On the other hand, some had been brought on by circumstances outside of our regulate. The College Enhancement Fund spending plan was keyed into the money management system. However, there was a glitch in the software package that did not allow it to method via wholly. Also, several condition and federal grants ended up approved and awarded at the stop of the 12 months and were being not keyed in for the reason that of the frenzy of action involved in the calendar year close near and the consolidation of the finance office.”
2) “Updated cash belongings data had been not designed obtainable as of January 9, 2022. The failure to effectively maintain, entire, and shut accounting information on a latest basis diminishes the usefulness of the fiscal records as a management software, effects in the decline of accounting controls, and raises the possibility that glitches will not be found out and corrected in a timely method.”
Considering the fact that funds asset information had not been up to date considering the fact that June 30, 2020, auditors utilised alternate methods to figure out amounts, which really should have been recognized for money belongings action in the economic statements.
“From our evaluation of accounting information and college board minutes, as properly as other audit techniques, we identified that funds assets, internet of gathered depreciation, were understated by $19,455,680.”
Reaction from Rafalowski and DeLoach: “We hereby concur with this locating. Capital asset information were being pulled and available, but the final report was not concluded until finally January 9, 2022. This was the result of the changeover of duties to the newly designed consolidated finance section.”
3) “Our audit unveiled deficiencies linked to the administration and routine maintenance of the fund accounting information. These deficiencies are the consequence of management’s failure to appropriate the findings famous in the prior-year audit report and the failure to put into practice their corrective action system.”
Reaction from Rafalowski and DeLoach: “We hereby concur with this discovering but consider some supplemental facts ought to be shared. While the remaining audit log does display that April, Could, and June 2021 were being shut in January, 2022, right reconciliation and closure did come about well timed.”
4) “These deficiencies exist because of to a deficiency of administration oversight and management’s failure to hold spending to the limitations approved by the county commission, which resulted in unauthorized expenses. These deficiencies have been claimed in the prior-12 months audit report. Management has formerly furnished written responses and corrective motion plans to tackle these deficiencies however, these deficiencies go on to exist.”
Reaction from Rafalowski and DeLoach: “We hereby concur with this acquiring and will work to make sure that all price range amendments are authorised and accounted for.”
5) “School office staff unsuccessful to request reimbursement for grant expenditures connected to the COVID-19 — Schooling Stabilization Fund Method — Elementary and Secondary School Emergency Reduction Fund (ESSER II) federal application on a well timed foundation. Requests totaling $1,741,872 had been not submitted to the Tennessee Division of Instruction for reimbursement until eventually December 8, 2021, for expenses produced from the College Federal Jobs Fund from March 2021 by June 2021 moreover encumbrances outstanding at June 30, 2021.”
Reaction from Rafalowski and DeLoach: “We hereby concur with this finding. Some Elementary and Secondary Faculty Unexpected emergency Relief Fund grant purposes had been caught up in review status as a result of the approval method and would not let for a reimbursement to come about.”
6) “Two former college department personnel notified the division that they had continued to receive payroll checks for a number of months just after they experienced terminated employment with the office. These personnel remained on the payroll for two to 4 months ensuing in overpayments totaling $31,033. The previous staff members reimbursed the section for these overpayments. This deficiency is owing to a absence of administration oversight.”
Response from Rafalowski and DeLoach: The human resources section has been continuously providing guidance to the finance section to establish and remedy every single circumstance. The overpayments happened right after July 2021 and just after suitable documentation experienced been shared with the recently established payroll division.”
Response from Finance Director Bailey: The personnel have been entered into the payroll method for the 2021-22 school calendar year by the college system’s human useful resource team. There was no method in position to reduce and determine these problems when the Sullivan County Finance Section assumed the responsibility of the school payroll in August of 2021.
7) The university department’s yearly fiscal report was not submitted with the county mayor and with the county clerk to be offered to the county commission at the upcoming commission conference following June 30, 2021, as required by condition law. Also, quarterly experiences had been not submitted with the county commission, yet another need of condition regulation.
Reaction from Rafalowski and DeLoach: “It was our knowledge that the county finance director would be presenting explained experiences. Obtain was requested to the money administration method in get to achieve this task. Entry was granted, and it was assumed all those reviews have been becoming presented.”
Reaction from Bailey: “The Sullivan County Finance Department was not dependable for publishing the economic (funds) report for the various cash of Sullivan County Schools for the fiscal 12 months ending June 30, 2021. In addition, this business did not have accessibility to the school’s records to produce the studies for the 2021 FY.
8) The school system’s contracts with bus businesses expired all through the 2020-2021 college yr and in March new bids were sought. The Board of Training did not award bids and the contracts had been re-bid in September. As of January 19, the school board has taken no motion on awarding any bids. The school method has continued producing payments to bus firms based mostly on expired contracts, a deficiency auditors explained leaves the university technique open up to legal responsibility.
Response from Rafalowski and DeLoach: “We hereby concur with this obtaining. Contracts for student transportation are incredibly elaborate and involve weeks’ worth of overview and negotiation. Regretably, that was not completed in a timely way with the contracts that expired for the duration of the existing year. The payment on expired contracts was not mainly because of absence of effort or organizing.”