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Presented By Jan Page, Audit Manager, West TN Area DIVISION OF LOCAL GOVERNMENT AUDIT (731) 421-7473. AUDIT AND ACCOUNTING ISSUES. YEAR END closing and related records. - PowerPoint PPT Presentation



AUDIT ANDACCOUNTING ISSUESPresented ByJan Page, Audit Manager, West TN AreaDIVISION OF LOCAL GOVERNMENT 421-74731YEAR END closing and related records2DOCUMENTS PREPARED FOR AUDITORS (for auditors to prepare your financials)Capital Asset Records should be prepared at year end (6-30). Should also be complete with additions, deletions (and current depreciation calculations)Accrued Leave Balances (if any) list by employee with current leave balance, amounts and extensionsFund Balance Worksheets worksheet documenting calculations for restricted, committed and assigned fund balances 3Other remindersClose Records ASAP check with your area audit manager for when you are scheduled to be audited and coordinate with them to arrange a date. Contact local education field rep if their assistance is needed in year end calculations and arrange a scheduleInform Auditors of any Unique Issues Early any issues that are unusual or unique should be discussed with auditors early in the audit process to allow for audit planningUpdate Contact List of Officials/Board Members Please have an updated contact list (correct names, mailing addresses, and email addresses if available) for the Director of Schools and all board members who have served from July 1st of the previous audit year through current including new board members. If the board members have served only a portion of the time, please include their dates of service 4EMPLOYEE COMPENSATION


The only exception to this is a direct reimbursement for expenses incurred personally for the benefit of the school departmentAnd then only subject to restrictions of department and board policies (i.e., reimbursement for school department approved travel/training expenses)6Improper payments to employees includeGift Cards (seems popular lately in some systems)Payments made through vendor system and reported on 1099sContract with retired employees (currently receiving payment from TCRS) through the vendor system. (These employees should have contracts reported to TCRS and should be paid by payroll system subject to work restrictions approved by TCRS)Any other inventive way of compensating employees outside of the payroll system and/or appropriation authority7PREVALENT AND/OR SIGNIFICANT RECENT AUDIT FINDINGS

8EXTENDED SCHOOL PROGRAMSViolations of 3 day deposit law for collectionsRelated cash and internal control deficiencies over cash collections/receipting/depositing9Payroll deduction accountsSome payroll deduction (liability) accounts are not reconciled these accounts should zero out at some point if classified, coded and paid correctly and timely10Credit/purchasing card policies and paymentsThe board should adopt specific policies governing credit/purchasing cardsCredit/purchasing cards should not be paid from statements without some method of obtaining and reviewing original invoices/receipts and comparing them back to the statements11Debt issuance SHOULD BE properly approved and reportedAll debt instruments issued on behalf of the school department should be approved by the board of education and the board of county commissioners PRIOR TO ISSUANCEIn addition, a report on the debt obligation should be filed with the Division of State and Local Finance in the Comptrollers office within 45 days of issuance12Cash flow issues in school federal projects fundFile for reimbursement timelyIf necessary, approve provisions allowing interfund loan (aka, permanent transfers)Interfund loans as above should be approved by the Division of State and Local Finance as previously mentioned for other debt instruments13Cell phone policies should be adopted by the boardGeneral policies addressing who is to receive phones paid for by the school system and the usage thereof should be adopted by the board of educationEnsure proper budget is postedThe budget approved by the County Commission should be the one posted to your accounting records/financial statementsEnsure that the original budget and all properly approved amendments are posted to the accounting recordsBudget reports should include the available beginning balances approved in the budget process15Construction contract requirementsAn escrow account for contract retainage is required for all contracts of $500,000 or greater (Section 66-34-104, T.C.A.)A licensed contractor is required on all construction contracts of $25,000 or more (Section 62-6-102, T.C.A)Construction contracts of $25,000 or more involving architecture, engineering or landscape architecture require plans made by a registered architect (Section 62-2-107, T.C.A)16Conflict of interest for a county commissioner to have a construction contract with school boardIt is a conflict of interest for a county commissioner to enter into a construction contract with the board of education (Section 12-4-101(a)(1), T.C.A) This statute has been upheld more than once by the state attorney general. (Opinion 91-31) and others referring to 91-31 as authoritativeWe consider this opinion binding until such time that it is specifically contradicted by subsequent litigation17Financial statementsFinancial Statement presentation changesGASB statements 63 & 65 change some long-term assets and liabilities in the financial statements to deferred inflows and deferred outflows. Will not affect many accounts and auditors will work with you to record these items in the financial statementsAny long-term debt currently shown on your financial statements as liabilities of the school department (notes, bonds, certain capital leases) will be moved for financial statement presentation to the primary government financial statements. Again, auditors will work with you to help record these items?Questions?20Have a great day!Contact Information:

Jan Page, Audit Manager, West TN AreaDIVISION OF LOCAL GOVERNMENT 421-7473