BLOUNTVILLE — The state’s once-a-year audit of Sullivan County’s funds, for the fiscal yr that finished June 30, 2021, is not very good when it comes to how the county’s university process was holding its books.
The audit consists of 8 results, all connected to university method funds. Audit officers mentioned school procedure personnel stopped carrying out issues they experienced been doing, even however they remained their obligation.
Tennessee Comptroller of the Treasury Jason Mumpower instructed the Times News on Wednesday that he wants the community to have an understanding of the terrible audit reflects the past and not the present or foreseeable future economic photo of the county.
As of July 1, 2021, the county’s finance department began dealing with the university system’s accounting. The consolidation of what experienced been independent accounting places of work for the faculty method and the rest of county federal government came right after the Tennessee Typical Assembly accepted a non-public act requested by the Sullivan County Fee.
It was acknowledged for months forward of time that the county finance section would be having in excess of the university system’s accounting.
Mumpower explained as much as nearly anything, the eight detrimental results ended up the end result of “animosity and hard feelings” from school process officials.
“It’s unlucky the college system shut down on some of its money duties and was not as cooperative as it could have been,” Mumpower. “This is why consolidation was necessary. The persons of Sullivan County ought to not be discouraged. The effects will be better in up coming year’s audit.”
The Occasions News questioned Director of Schools Evelyn Rafalowski if she experienced any response to Mumpower’s responses.
Rafalowski reported she would basically stand on composed responses she and Assistant Director of Schools Ingrid DeLoach submitted to auditors and incorporated in the audit.
Aspects in just the 8 results assortment from the college program not keeping keep track of of its payroll to the extent it was paying out former personnel for up to four months after they’d still left the procedure, to capital belongings, web of accumulated depreciation, having been understated by nearly $20 million.
The eight results:
1) School section money necessary material audit changes for proper economical statement preparation. (A content weakness.)
2) Deficiencies were observed in the upkeep of money asset information. (A product weakness.)
3) The accounting information for numerous money had not been managed effectively. (A important deficiency.)
4) The faculty section experienced deficiencies in price range operations.
5) The university division failed to ask for reimbursement for grant expenses on a timely basis, ensuing in a deficit in unassigned fund equilibrium in the Faculty Federal Projects Fund. (A content weak spot.)
6) The university division had deficiencies associated to the administration of payroll that resulted in overpayments to some staff. (A considerable deficiency.)
7) Economic stories have been not introduced to the county commission in compliance with point out statutes.
8) The university department manufactured payments dependent on expired contracts for university student transportation. (A considerable deficiency.)
Sample aspects from auditors on each and every locating:
1) “At June 30, 2021, specific normal ledger account balances in the Typical Goal Faculty, College Federal Assignments, Central Cafeteria, School Enhancement, and Education and learning Cash Tasks money have been not materially appropriate, and audit adjustments totaling $3,482,566, $1,480,432, $471,663, $150,000, and $20,000,000, respectively, were demanded for the fiscal statements to be materially proper at calendar year-close.”
And “It is a powerful indicator of a content weak spot in inner controls if the division has ineffective controls above the maintenance of its accounting data, which are applied to get ready the economic statements, together with the similar notes to the money statements. This deficiency is a final result of a lack of administration oversight.”
Reaction from Rafalowski and DeLoach: “We hereby concur with this discovering, and we agree that audit changes were expected. Nevertheless, some ended up brought on by situations past our regulate. The University Advancement Fund price range was keyed into the monetary administration process. Having said that, there was a glitch in the software that did not make it possible for it to method through absolutely. Also, a lot of condition and federal grants had been accredited and awarded at the conclusion of the 12 months and have been not keyed in because of the frenzy of action involved in the yr conclude close and the consolidation of the finance office.”
2) “Updated money belongings information ended up not manufactured available as of January 9, 2022. The failure to effectively preserve, finish, and close accounting data on a current basis diminishes the usefulness of the money records as a administration resource, final results in the decline of accounting controls, and raises the possibility that problems will not be identified and corrected in a well timed way.”
Due to the fact funds asset documents had not been up-to-date given that June 30, 2020, auditors made use of alternate techniques to identify quantities, which really should have been regarded for cash property exercise in the monetary statements.
“From our critique of accounting records and college board minutes, as very well as other audit procedures, we established that capital belongings, web of accumulated depreciation, have been understated by $19,455,680.”
Response from Rafalowski and DeLoach: “We hereby concur with this locating. Funds asset documents were pulled and obtainable, but the ultimate report was not concluded until eventually January 9, 2022. This was the outcome of the changeover of obligations to the freshly established consolidated finance section.”
3) “Our audit exposed deficiencies connected to the administration and maintenance of the fund accounting documents. These deficiencies are the outcome of management’s failure to proper the results noted in the prior-calendar year audit report and the failure to put into practice their corrective action prepare.”
Response from Rafalowski and DeLoach: “We hereby concur with this getting but believe some added details really should be shared. Although the remaining audit log does display that April, May, and June 2021 were being closed in January, 2022, good reconciliation and closure did take place timely.”
4) “These deficiencies exist due to a absence of administration oversight and management’s failure to hold spending to the limits approved by the county commission, which resulted in unauthorized expenses. These deficiencies have been reported in the prior-year audit report. Management has formerly delivered penned responses and corrective action options to handle these deficiencies even so, these deficiencies go on to exist.”
Response from Rafalowski and DeLoach: “We hereby concur with this getting and will function to assure that all budget amendments are authorised and accounted for.”
5) “School department personnel failed to ask for reimbursement for grant expenses similar to the COVID-19 — Training Stabilization Fund Software — Elementary and Secondary University Emergency Reduction Fund (ESSER II) federal system on a well timed basis. Requests totaling $1,741,872 ended up not submitted to the Tennessee Division of Education and learning for reimbursement until eventually December 8, 2021, for expenses made from the College Federal Jobs Fund from March 2021 through June 2021 as well as encumbrances fantastic at June 30, 2021.”
Response from Rafalowski and DeLoach: “We hereby concur with this finding. Some Elementary and Secondary Faculty Emergency Reduction Fund grant programs had been caught up in evaluate position by the approval procedure and would not allow for for a reimbursement to take place.”
6) “Two previous faculty department workforce notified the division that they experienced ongoing to acquire payroll checks for many months right after they had terminated work with the division. These staff members remained on the payroll for two to 4 months ensuing in overpayments totaling $31,033. The former personnel reimbursed the division for these overpayments. This deficiency is owing to a lack of administration oversight.”
Reaction from Rafalowski and DeLoach: The human sources section has been constantly supplying guidance to the finance section to determine and solution every single scenario. The overpayments transpired after July 2021 and soon after proper documentation had been shared with the freshly recognized payroll section.”
Reaction from Finance Director Bailey: The employees ended up entered into the payroll technique for the 2021-22 faculty calendar year by the university system’s human resource team. There was no course of action in spot to avert and establish these concerns when the Sullivan County Finance Section assumed the duty of the university payroll in August of 2021.
7) The university department’s yearly economic report was not filed with the county mayor and with the county clerk to be introduced to the county commission at the following fee assembly just after June 30, 2021, as essential by state regulation. Furthermore, quarterly reviews had been not filed with the county commission, one more prerequisite of state law.
Response from Rafalowski and DeLoach: “It was our knowledge that the county finance director would be presenting explained stories. Entry was requested to the economical management program in buy to accomplish this endeavor. Access was granted, and it was assumed those reviews were currently being introduced.”
Response from Bailey: “The Sullivan County Finance Department was not liable for publishing the economical (spending budget) report for the several cash of Sullivan County Colleges for the fiscal yr ending June 30, 2021. In addition, this office environment did not have entry to the school’s data to generate the reviews for the 2021 FY.
8) The college system’s contracts with bus corporations expired in the course of the 2020-2021 university yr and in March new bids had been sought. The Board of Education and learning did not award bids and the contracts have been re-bid in September. As of January 19, the university board has taken no action on awarding any bids. The faculty method has continued making payments to bus organizations based on expired contracts, a deficiency auditors mentioned leaves the faculty system open to liability.
Response from Rafalowski and DeLoach: “We hereby concur with this acquiring. Contracts for scholar transportation are pretty elaborate and contain weeks’ really worth of review and negotiation. Unfortunately, that wasn’t done in a timely fashion with the contracts that expired throughout the current 12 months. The payment on expired contracts was not for the reason that of absence of hard work or organizing.”