Monday, March 16, 2015

Auditors' reports

Foley "fulfilling our fiduciary responsibilities"
Allen annual occurance, School Committee meeting directly with the auditors
Matthew Hunt, CliftonLarsonAllen
six findings: three related to indirect charges, two in school nutrition, one in IA's being highly qualified "simply a matter of paperwork"
Hunt: no specific management comments to the School department
city spends more than $500,000 in federal grants, so city is subjected to a single audit
60 student files tested in school nutrition; 2 did not have applications on file (system has now changed)
disbarrment requirement: vendors have to be checked for ability to work on federal grants
"not a compliance issue, really more of the management issue"
indirect cost rate being charged by city under HUD are 3%
grants under School department say 1%
"difference of opinion there" finding is strictly that grant does not match amount charged
"highly qualified status" of IAs: just needed the files
several FY13 findings that got resolved in FY14
Stearns (city auditor): conclusion I came up with after the audit report came out
going into it I was of the opinion that the city had the right to set the rate
school department could deviate from that if they followed certain procedures
delegation agreement with state ed department: meets exception to using the approved rate
state ed department calculates the LEA for all of the state: Worcester's is 2.8%
amount applicable to city is somewhat less than 2.8%; cannot say what it is at this time
bulk of work done by school department (question by Foley, response by Stearns)
"central service cost allocation plan"
Foley: agree that we have a different rate than what the city has set
Stearns: fall under regulation of supplementing versus supplanting
Foley: resolve?
Stearns: key issue: don't want questioned costs
fed is auditing state on this issue: report coming out soon; whatever comes of that, results in disallowed costs
city side of 2.8% versus school side
Foley: have lost some significant services
for FY15 would have to be agreement for what the city is assessing as a fee
Novick: appreciate work of Stearns in honestly asking the question
how to fix it?
Stearns: DESE rates on assessing work done (like charges on administration in full budget)

Hunt: progress was made in resolving those findings
would expect some of these findings to fall away
Foley: looking forward to working with city auditor

Agreed upon procedures by Robert Alario, CPA
all interactions very positive, everything we asked for we received
two findings: initial report of school choice did not match city books (city error)
special education reported on incorrect line: was corrected
fewer findings than the year before
"I think the team is a great team" worked to resolve previous year issues
Foley: numbers of areas where things were in complete compliance: looked at in 21 areas
Allen: relates to compliance in NSS, state uses it for all numerical reports

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