Finance and Operations liveblog: audit

Agreed-upon procedures (student activity funds) and City internal controls

Allen:" first time probably ever that the student activity accounts were reviewed at one time"
"now engage services" to do so annually: now doing FY11, will do FY12 once it closes
"hopefully will find that many of them have been resolved"
Foley: "certain things not being done across the district"
Auditor: "to be expected you're going to find some of these things"
"key finding...sum of two balances (checking and agency accounts) reconcile to book balances"
"once this particular area is addressed and reconciled...you're in pretty good shape"
Allen:"just some recording issues..reconciling accounts back to 2004"
double check against the Treasurer's office (at City Hall as well)
statutorily each school has a treasurer in charge of student activity account 
"a teacher, could be an assistant principal, someone other than a principal for the separation of that duty"
working with principals to make sure that all paperwork in order
graduating classes are leaving student activity accounts: can either donate or can take funds with them (for reunions, for example)
should be practice of what happens after graduation
auditor: recommend that reconciliation done within a month
"very easy things to clean up"
"a couple of accounts that are more scholarship accounts...should really be governed under different Mass General Laws"
Foley: "a little more training"
maximum balance of $25,000 is an issue here
Allen: working on that reimbursement process with the schools...really need to get the money through that account
city makes that deposit that day (now)...reimbursement happening that day (interbank transfer as a result of the management letter)
Colorio: two elements not reconciled. Schools control checking account, treasurer controls the agency account...
Allen: review like this made it clear that greater collaboration necessary
WPS were not getting the bank statements, and now has checking account information...double-check on this
Federal grants:
"major grants"
child nutrition, Title I, Title IIA, ARRA, Head Start
there were 12 findings as to FY11: often two are related, more like five or six
documentation of supervision of application for reimbursement
verification filing
indirect cost: still being resolved internally...WPS still submits contracts that say 1%; the city is still taking 3%
"That is not for us as auditors to opine on..."
vendors with contracts over $25,000 have to give evidence of not being disbarred
Foley reviews that the state has now found that the school committee, not the city (nor the fed) set the rate at which indirect costs can be charged to grants
auditors will be in shortly; report to be issued in the fall; indirect costs still not resolved with city, so will be found for FY12
Allen notes how many of the audit finding from previous years have been resolved already, and that is the hope. Every year resolves the year before
Foley: "you come up with a better process"