March 27, 2006

[Guest sullinss]

Proceedings of the Audit Committee

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

March 27, 2006

 

Call to Order

 

Chair Jane McCracken called the Audit Committee to order at 12:02 p.m. on Monday, March 27, 2006, in Room 212 of the Lincoln Center. Committee members in attendance were Jane McCracken, Marcy Mutch, Stan Moser, Dale Getz, and Conrad Stroebe. Excused was member Joel Guthals. Also in attendance were Business Manager Thomas Harper, auditor John Jacobsen of Eide Bailly LLP, and Jerry Hansen.

 

Public Comment

 

Jerry Hansen addressed the Committee as being in favor of the District producing a CAFR report. Jerry said reporting the two General Funds separately would be helpful for future bond issues.

 

Minutes of December 7, 2005

 

Stan Moser moved to approve the minutes of December 7, 2005 as presented. Marcy Mutch seconded the motion. The motion carried unanimously.

 

Discussion of CAFR Requirements

 

The purpose of this meeting was to discuss the benefits of the District producing a Comprehensive Annual Financial Report (CAFR), which is the highest level of financial statement reporting for governmental units, vs. the additional resources and large commitment it would require to produce this report.

 

The additional statistical reports and separation of General Funds required in the CAFR report may be helpful when issuing bonds or applying for loans through the Montana Board of Investments. The CAFR reflects very well on an organization but beyond that the public at large does not need the report. The District would be submitting to ASBO (Association of School Business Officials) to obtain a certificate of merit. The benefits of the report would be consistent annual information, which the district could put together at anytime for internal use. The interest rate for a bond issue is affected more by our reserve levels than the type of financial report we prepare.

 

Preparation of a CAFR would require an estimated additional 200 hours of time or require an outside contractor to prepare. Bozeman Schools prepare a CAFR each year but they have a dedicated person for this task. John will check if there is any prohibition to attaching additional schedules to our current form of report.

 

The Committee discussed what more disclosure would do for the District in terms of public perception and Board understanding of the two different legal entities (elementary and high school) and were told by Thomas Harper and John Jacobsen that although they are legally different entities, reporting on the two as one entity is acceptable and common in the State.

 

Stan Moser moved that the District not adopt CAFR reporting at this time. Dale Getz seconded the motion. The motion carried unanimously.

 

Thomas gave a follow-up on last year’s audit issues. After thoroughly checking accounts payable records no additional violation of alcohol with meals was found in addition to the ones already identified on last year’s audit. The Procurement card procedure is proceeding and training will begin in April. This procedure will improve the controls and paper trail of purchases. Employees assigned a Procurement card will be instructed on policy and accountability.

 

There being no further business, the meeting was adjourned at 12:48 p.m.

 

 

 

 

Jane McCracken, Chair

 

 

 

 

Sherrill Sullins, Recorder