Guest sullinss Posted October 13, 2010 Report Share Posted October 13, 2010 Proceedings of the Audit Committee School District No. 2, Yellowstone County High School District No. 2, Yellowstone County Billings, Montana September 17, 2010 Call to Order Chair Marcy Mutch called the Audit Committee to order at 11:37 a.m. on Friday, September 17, 2010 in Room 213 of the Lincoln Center. Committee members in attendance were: Marcy Mutch, Laura Bailey, Lindy Graves, and Joyce Weber, Also attending were Chief Financial Officer Thomas Harper, District Clerk/Internal Auditor Leo Hudetz, and Edie Hanson, Partner and Susann Hartwig, Audit Senior Manager of Eide Bailly LLP. Communication from the Public There was no public comment. Elect Committee Chair Laura Bailey moved to nominate Marcy Mutch as Committee Chair. Joyce Weber seconded the motion. The motion carried unanimously. Approval of Minutes of December 04, 2009 Joyce Weber moved to approve the minutes of December 04, 2009. Laura Bailey seconded the motion. The motion carried unanimously. CAFR Certificate of Excellence FY2008-09 Thomas reported this was our third year of receiving the Certificate of Excellence in Financial Reporting for our Comprehensive Annual Financial Report (CAFR) from the Association of School Business Officials International (ASBO). We will prepare written responses to comments received in the submission of the CAFR. The Audit Committee congratulated the Finance Department on this accomplishment and would like to recognize the staff at the next Audit Committee meeting. Thomas is also a reviewer for other CAFR’s which provides the opportunity to see how other districts compile their CAFR. Timeline & Audit Scope FY2009-10 – Edie Hanson, Eide Bailly LLC Manager Edie Hanson with Eide Bailly LLP reported field work began last week and will be finished next week. The audit is going well, and they hope to get results to us by the end of October. There is a lot of extra ARRA fund testing to do this year. Chair Mutch asked that ASBO’s comments from last year’s CAFR be addressed in this year’s CAFR. Chair Mutch asked if there were any new standards to apply. Audit Senior Manager Susann Hartwig said GASB Statement 54 would apply next year. This Statement applies to fund balance and is effective for audits after December 15, 2010. The report for derivatives and intangible assets will probably not apply to us. Susan advised per GASB 54 you have to be careful what you consider a special revenue fund, and what you have in a fund level for reserves. Requirements must roll up into a government line. They are primarily focusing on special revenue. Financials will need to disclose what’s restricted and what is not. Parts will also affect the budget. Susan said they are willing to consult if necessary when we get to that stage. Thomas doesn’t anticipate major issues from the audit; although, we do have a lot of federal dollars which means additional detailed testing. We anticipate a few more comments due to the complexity of additional federal dollars. It will be up to the accounting staff at the Office of Public Instruction (OPI) to provide guidance regarding GASB 54 based on input from GASB and GFOA. That Statement will rearrange how we talk about fund balance as far as what is restricted and unrestricted pertaining to special revenue funds. Currently, special revenue funds are considered restricted. Thomas advised the Health Care Reform Act may impact our internal controls and the audit process as it relates to 1099’s. Currently, corporations are not sent 1099’s; but, the new rules will require everyone we pay to receive a 1099. There may be a provision in that law that says if we pay by credit card we don’t have to issue a 1099; it may be up to the credit card companies to provide those 1099’s. Thomas said in 2009 the State of MT received $125M in ARRA money to stabilize their budget. The State used $62.5M of that for state-wide school district budgets. The State substituted one-time money for on-going funding for the General Funds. That amounted to $6.2M for our District. We also received $10M in addition to our regular Title and special education funds over the last two years. In this budget year we now have $6.2M in our General Fund base that will need to be replaced by other funding, or our revenue will decrease by that amount. We also used about $1.2M of special education and Title funds for our General Fund budget solution since there were no layoffs in the Elementary District, and the High School District reduced FTE by attrition. Currently the District is funded with $7.4M of one-time money. Counting other special one-time funding, the District has an overall estimated $15M-$16M of money that will be gone at the end of this fiscal year. The State will get $30.7M under the Jobs Bill, of which our District will receive about $3.2M over two years. That money will probably replace some one-time money for the General Fund. We have the same level of expenses for declining enrollment. At some point expenses will need to decrease to match with revenue. Staffing has remained fairly constant. A Committee meeting will be scheduled the second week in November to review the CAFR. Leo advised that MTSBA is going to support legislation to be able to fund budgets for unfunded liabilities. Review Charter Committee members reviewed the Charter. Changes added were: 1) three members of the public, 2) The Chair shall be a member of the public, and 3) A quorum shall consist of a majority of Audit Committee members. The revised charter will advance to the Board for approval. A review with the internal auditor, Leo Hudetz, and affirming standards of independence will be agendaed for a future meeting. Audit Contract Discussion Eide Bailly has audited our financials for the past 9-10 years. Several years ago we went out for competitive bid, followed by a three-year extended contract. This is the last year of that contract. Thomas and Committee members agree we should bid out next year’s audit contract. This item will be agendaed for a future meeting. Adjournment There being no further business, the meeting was adjourned at 12:29 p.m. Marcy Mutch, Chair Sherrill Sullins, Recorder Link to comment Share on other sites More sharing options...
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