Audit Comm. - Dec. 01, 2008

[Guest sullinss]

Proceedings of the Audit Committee

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

December 01, 2008

 

Call to Order

 

Chair Marcy Mutch called the Audit Committee to order at 11:35 a.m. on Monday, December 01, 2008 in Room 219 of the Lincoln Center. Committee members in attendance were Marcy Mutch, Tim Trafford, Laura Bailey, Peter Gesuale, and Jack Eagle. Absent was member Joel Guthals. Also attending were Chief Financial Officer Thomas Harper, Auditors John Jacobsen and Edie Hanson of EideBailly LLP, and District Clerk/Internal Auditor Leo Hudetz.

 

The Chair introduced Laura Bailey and welcomed her as a new community member to the Committee.

 

Approval of Minutes of October 02, 2008

 

Tim Trafford moved to approve the minutes of October 02, 2008. Jack Eagle seconded the motion. The motion carried unanimously.

 

Draft Comprehensive Annual Financial Report (CAFR) for Year Ended 2008

 

John Jacobsen said the auditor’s report expresses an unqualified opinion of the basic financial statements. No instances of noncompliance material to the financial statements were disclosed during the audit.

 

There are three issues disclosed in the Schedule of Findings and Questioned Costs. One control deficiency considered to be a significant deficiency is reported in the Report on Compliance and on Internal Control Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. This is not considered a material weakness.

 

Two control deficiencies considered to be significant deficiencies were disclosed during the audit of internal control over major federal award programs and is reported in the Schedule of Findings and Questioned Costs. The auditor’s report on compliance of the major federal award programs expresses an unqualified opinion. The programs tested as major programs included: Title I, CFDA #84.010 and Title II, CFDA #84.367.

 

Billings Public Schools was determined to be a low-risk auditee.

 

John explained a control deficiency exists when the design or operation of a control does not prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency that affects the ability to report financial data reliably in accordance with generally accepted accounting principles. They considered the deficiencies described in the schedule of findings and responses to be significant deficiencies in internal control over financial reporting. A material weakness is a significant deficiency that results in the likelihood that a material misstatement of the financial statements will not be prevented or detected by the entity’s internal control. They do not consider the significant deficiency in the schedule of findings and questioned costs to be a material weakness.

 

Thomas said we have an on-going process to rewrite financial policies and procedures, particularly as it pertains to fixed assets and capitalization. With respect to incurred but not reported tax revenue, we will change our process of recognizing late personal property tax revenue.

 

With regards to the Title I grant questioned costs of $138, the District will conduct additional staff training in on legitimate expenditures paid out of grants, and check with both OPI and the non-federal audit team office of the Inspector General on questionable issues.

 

With regards to the Title I grant questioned costs of $5,000, the District will conduct additional staff training on requirements for documentation.

 

The Transmittal Letter, the Management Discussion and Analysis and the Footnotes of the draft Comprehensive Annual Financial Report (CAFR) for year ended 2008 were reviewed and edited. The balance of the report will be reviewed and edited at a subsequent meeting to be scheduled next week.

 

Adjournment

 

There being no further business, Tim Trafford moved to adjourn the meeting at 1:22 p.m. Jack Eagle seconded the motion. The motion carried unanimously.

 

 

 

 

 

Marcy Mutch, Chair

 

 

 

 

Sherrill Sullins, Recorder