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Audit Comm. Mtg - Jan. 29, 2008


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Proceedings of the Audit Committee

School District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

January 29, 2008

 

Call to Order

 

Chair Jane McCracken called the Audit Committee to order at 11:03 a.m. on Tuesday, January 29, 2008 in Room 213 of the Lincoln Center. Committee members in attendance were Jane McCracken, Marcy Mutch, Joel Guthals, and Jack Eagle. Committee members Peter Gesuale and Tim Trafford were absent. Also attending were Chief Financial Officer Thomas Harper, Senior Associate Auditor Edie Hanson of EideBailly LLP, and District Clerk Leo Hudetz

 

Approval of Minutes of September 13, 2007

 

Joel Guthals moved to recommend Board approval of the minutes of September 13, 2007. Jack Eagle seconded the motion. The motion carried unanimously.

 

Review of Draft Comprehensive Annual Financial Report for Year Ended 2007

 

Committee members reviewed the first draft of the Transmittal Letter, the Management Discussion and Analysis, graphs and exhibits, and the Single Audit Section. Financial Statements will be reviewed at a subsequent meeting. We have a clean management letter and clean audit report, and there were no findings.

 

Thomas reported he secured an extension from the State to submit the CAFR by February 15, 2008. He will check to see if a Special Board meeting is required to approve the extension. An extension is necessary to complete work needed for a prior period adjustment due to incurred liability from compensated absence. Compensated absence is composed of sick time, vacation time, and service credit. Prior reports have never accounted for Teachers’ Retirement System (TRS) Option 1 liability incurred from the match the District is required to make for retirement payout. Starting last year, all employee groups were eligible for service credit. An actuarial study was required to determine that liability. It will never be a funded liability; it will always reside on the books as a “pay as you go” liability. The actuary calculated our liability at $50M using all employees who were “potentially” employed ten years; whereas, our calculations excluded non-vested employees at an estimate of $35M. Thomas is waiting for Barb Aasen and John Jacobsen of EideBailly to review these figures. We have a permissive levy to fund our “pay as you go” compensated absence on a yearly basis. We may need to adjust the Balance Sheet, Statement of Net Assets, and Statement of Activities.

 

Edie Hanson reported the audit went well. They tested IDEA and Smaller Learning Communities grants, and as of now there are no findings. They may have some verbal comments they bring to the next meeting, but there were no issues regarding documentation. They took new samples in their testing and if they found no problems, they considered prior years’ corrections to be implemented.

 

Thomas confirmed that prior issues have been corrected. Warehouse purchases now use an electronic approval process. Implementation of the Pcard has improved our ability to monitor small purchase items. We have just implemented an on-line Pay School program for parents to pay for student fees and lunch. There is a review process in place for Title grants. These activity tools enhance our internal controls.

 

The next meeting will be Tuesday, February 5, 2008 at 11:00 a.m. with location to be determined.

 

Adjournment

 

The meeting was adjourned at 1:20 p.m.

 

 

 

Jane McCracken, Chair

 

Sherrill Sullins, Recorder

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