Belleville Financial Report 2013-2014

8/10/2019 Belleville Financial Report 2013-2014

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BELLEVILLE

TOWNSHIP SCHOOL DISTRICT

COMPREHENSIVE ANNUAL FIN NCI L REPORT

FOR

THE

FISC L YE R

ENDED

JUNE

30 2014

Belleville New Jersey


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COMPREHENSIVE ANNUAL

FINANCIAL

R PORT

of the

Belleville Township School District

Belleville New Jersey

For The Fiscal Year Ended June 30 2014

Prepared by

Business Office


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BELLEVILLE

TOWNSHIP SCHOOL DISTRICT

TABLE OF CONTENTS

Letter of Transmittal

Organizational Chart

Roster

of

Officials

Consultants and Advisors

Independent Auditor s Report

INTRODUCTORY SECTION

FINANCIAL SECTION

REQUIRED SUPPLEMENTARY INFORMATION- PART I

Management s Discussion and Analysis

Basic Financial Statements

A. District-wide Financial Statements

A 1

A 2

Statement

of

Net Position

Statement of Activities

B. Fund Financial Statements

Governmental unds

B 1 Balance Sheet

B-2 Statement of Revenues, Expenditures, and Changes in Fund Balances

B 3 Reconciliation of the Statement of Revenues, Expenditures and

Changes

in

Fund Balances

of

Governmental Funds to the

Statement of Activities

Proprietary unds

B 4 Statement of Net Position

B 5 Combining Statement

of

Revenues, Expenses, and Changes in Net Position

B-6 Statement of Cash Flows

iduciary unds

B-7 Statement of Fiduciary Net Position

B-8 Statement of Changes in Fiduciary Net Position Not Applicable

Notes to the Financial Statements

i-iv

v

vi

v

1 3

4-14

15

16-17

18

19

20

21

22

23

24

25

26-55


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BELLEVILLE TOWNSHIP SCHOOL DISTRICT

TABLE OF CONTENTS

REQUIRED SUPPLEMENTARY INFORM TION PART II

C Budgetary Comparison Schedules

C 1

C-2

C-3

Budgetary Comparison Schedule - General Fund

Budgetary Comparison Schedule - Special Revenue Fund

Required Supplementary Information Budgetary Comparison Schedule-

Notes to the Required Supplementary Information

OTHER SUPPLEMENTARY INFORMATION

D School Level Schedules Not Applicable

E Special Revenue Fund

E 1

E-2

Combining Schedule of Program Revenues and Expenditures

Special Revenue

Fund

Budgetary Basis

Schedule of Preschool Aid

Expenditures

Budgetary Basis Not Applicable

F Capital Projects Fund

F 1 Summary Schedule of Project Expenditures Budgetary Basis

F-2 Summary Schedule of Revenues Expenditures and Changes in Fund

Balance

Budgetary Basis

F-2a Schedule

of

Project Revenues Expenditures Project Balance and Project

Status

Budgetary Basis

F-2b Schedule of Project Revenues Expenditures Project Balance and Project

Status

Budgetary Basis

G Proprietary Funds

nterprise Fund

G 1

Combining Statement of Net Position

G-2 Combining Statement ofRevenues Expenses and Changes in

Net Position

G-3 Combining Statement

of

Cash Flows

56-63

64

65

66-67

68

69

70

71

72

73

73

73


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TABLE

OF CONTENTS

OTHER SUPPLEMENTARY INFORMATION Continued)

H. Fiduciary Fnnds

H 1

H 2

H 3

H 4

Combining Statement of Agency Fund Net Position

Combining Statement of Changes in Fiduciary

Net

Position

Not

Applicable

Student Activity Agency Fund Schedule of Receipts and Disbursements

Payroll Agency Fund Schedule of Receipts and Disbursements

I. Long-Term Debt

1 1

I 2

I 3

J.

J 1

J 2

J 3

J 4

J 5

J 6

J 7

J 8

J 9

J 1 0

J 11

J 12

J 13

J 14

J 15

J 16

J 17

J 18

J 19

J 20

Schedule

of

Serial Bonds

Schedule of Capital Leases Payable and Lease Purchase Agreements

Debt Service Fund Budgetary Comparison Schedule

STATISTICAL SECTION Unaudited)

Net Position by Component

Changes in Net Position

Fund Balances Governmental Funds

Changes in Fund Balances Governmental Funds

General Fund

Other Local Revenue by Source

Assessed Value and Actual Value

of

Taxable Property

Direct and Overlapping Property

Tax

Rates

Principal Property Taxpayers

Property Tax Levies and Collections

Ratios of Outstanding Debt

by Type

Ratios

of

Net General Bonded Debt Outstanding

Direct and Overlapping Governmental Activities

Debt

Legal Debt Margin Information

Demographic and Economic Statistics

Principal Employers

Full Time Equivalent District Employees by Function/Program

Operating Statistics

School Building Information

Schedule

of

Required Maintenance for School Facilities

Insurance Schedule

74

75

75

76

77

78

79

80

81 82

83

84 85

86

87

88

89

9

91

92

93

94

95

96

97

98

99 100

101

102


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T BLE OF

CONTENTS

Page

K

SINGLE

AUDIT

SECTION

K 1

Rep011 on Internal Control Over Financial Reporting and on Compliance and

Other Matters Based on an Audit

of

Financial Statements

Performed in Accordance with Government Auditing Standards -

Independent Audi tor s Report 103-104

K-2

Report on Compliance for Each Major Federal and State Program; Report on Internal

Control Over Compliance; and Rep011 on the Schedule

of

Expenditures

of

Federal

Awards Required by U.S. OMB Circular A-133 and Schedule

of

Expenditures

of

State Financial Assistance Required by New Jersey OMB Circular 04-04

Independent Auditor s Report 105-108

K-3

Schedule

of

Expenditure

of

Federal Awards 109

K-4

Schedule

of

Expenditures

of

State Financial Assistance

110-111

K-5

Notes to the Schedules of Expenditures of Federal Awards and


112-113

K-6

Schedule

of

Findings and Questioned Costs

114-151

K-7

Summary Schedule

of

Prior Year Findings

152


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INTRODU TORY SE TION


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ELLEVILLE

PU LIC

SCHOOLS

Ricardo costa

cting Superintendent

December 17,2014

Honorable President and

1

02

Passaic Avenue

BELLEVILLE PUBLIC SCHOOLS

102 Passaic Avenue

Belleville, New Jersey 07109

Web Site: www.bellevilleschools.org

Members of the Board of Education

Belleville School District

Essex County, New Jersey

Dear Board Members:

Phone: 973 450-3500 ext. 1021

Fax

973 450-3504

The comprehensive annual financial report of the Belleville School District for the fiscal year ended June

30, 2014 is hereby submitted. Responsibility for both the accuracy of the data and completeness and

fairness

of

the presentation, including all disclosures, rests with the management

of

the Board

of

Education. To the best of our knowledge and belief, the data presented in this report is accurate in all

material respects and

is

reported in a mauner designed to present fairly the financial position and results

of

operations of the various funds and account groups of the District. All disclosures necessary to enable the

reader to gain an understanding

of

the District's financial activities have been included.

The comprehensive annual financial report is presented in four sections: introductory, financial, statistical

and single audit. The introductory section includes this transmittal letter, the District's organizational chart

and a list of principal officials. The financial section includes management discussion and analysis

(MD&A), the basic financial statements and schedules, as well as the auditor's report thereon. The

MD&A of the District's financial activities is added to this section under GASB 34 to introduce the basic

financial statements. The statistical section includes selected financial and demographic information,

generally presented on a multi-year basis. The District is required to undergo an annual single audit in

conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and

Budget Circular A-133, Audits of State and Local Governments , and the state Treasury Circular Letter

04-04 OMB, Single Audit Policy for Recipients

of

Federal Grants, State Grants and State Aid Payments.

Information related to this single audit, including the auditor's report on the internal control structure and

compliance with applicable laws and regulations and findings and recommendations, are included in the

single audit section of this report.

1

REPORTING ENTITY AND ITS SERVICES: Belleville School District is an independent

reporting entity within the criteria adopted by the GASB as established by GASB Statement No. 14. All

funds and account groups of the District are included in this report. The Belleville Board of Education

and all its schools constitute the District's reporting entity.

i


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The District provides a full range o educational services appropriate

to

grade levels Pre K through

12.

These include regular, vocational as well as special education for handicapped youngsters. The District

completed the 2013-2014 fiscal year with an enrollment o 4,699.0 students, which is 1.32 more than

previous year's enrollment. The following details the changes in the student enrollment o the District

over the last two years.

2013-2014

2012-2013

4,699.0

4,638.0

1.32

1.42

2 ECONOMIC CONDITION AND OUTLOOK: The Township has little undeveloped land and,

accordingly, any new industry will have to be a replacement to existing establishments.

3 MAJOR INITIATIVES: The school district is committed

to

maintaining and improving student

performance on standardized assessments. The district relocated

th

grade students from seven elementary

schools to the middle school on September 1 2013. The middle school and central office staff continued

to work with the NJDOE Regional Achievement Center 3

to

provide strategic support

to

meet middle

school academic goals. In addition, the district secured additional computers to support

PARRC testing.

The NJQSAC report indicated that the district

is

not meeting academic standards for student success

resulting in a need for additional technology, academic resources, and professional development.

4 INTERNAL ACCOUNTING CONTROLS:

Management o the District is responsible for

establishing and maintaining an internal control structure designed to ensure that the assets o the District

are protected from loss, theft or misuse and

to

ensure that adequate accounting data are compiled to allow

for the preparation o financial statements in conformity with generally accepted accounting principles

(GAAP). The internal control structure is designed

to

provide reasonable, but not absolute, assurance that

these objectives are met. The concept o reasonable assurance recognizes that: (1) the cost o a control

should not exceed the benefits likely to be derived; and (2) the valuation o costs and benefits requires

estimates and judgments by management. The district failed to maintain these controls throughout the full

school year resulting in a deficit which will impact future budgets and a need for fiscal oversight.

As

a recipient o federal and state financial assistance, the District also

is

responsible for ensuring that an

adequate internal control structure is in place to ensure compliance with applicable laws and regulations

related to those programs. This internal control structure is also subject to periodic evaluation by the

District management. As part o the District's single audit described earlier, tests are made to determine

the adequacy o the internal control structure, including that portion related

to

federal and state financial

assistance programs, as well as to determine that the District has complied with applicable laws and

regulations.

5 BUDGETARY CONTROL: In addition to internal accounting controls, the District is obligated to

maintain budgetary controls. The objective o these budgetary controls is to ensure compliance with legal

provisions embodied in the annual appropriated budget approved by the voters o the municipality.

Annual appropriated budgets are adopted for the general fund, and the special revenue fund.

Project-length budgets are approved for the capital improvements accounted for in the capital projects

fund. The final budget amount as amended for the fiscal year is reflected in the financial section.

An encumbrance accounting system is used to record outstanding purchase commitments on a line item

basis. Open encumbrances at year-end are either canceled or are included as reappropriations o fund

balance in the subsequent year. Those amounts to be reappropriated are reported as reservations o fund

balance as o June 30, 2014. During March 2014 the district acknowledged the budget controls were not


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adequate to prevent over expenditures o the 2013-14 budget. In March the board approved an

administrative change which began a process to address the projected deficit.

6 ACCOUNTING SYSTEM AND REPORTS: The District's accounting records reflect generally

accepted accounting principles, as promulgated

by

the Govermnental Accounting Standards Board

(GASB). The accounting system o the District is organized on the basis o funds and account groups.

These funds and account groups are explained in Notes to the Financial Statements , Note

I

The district

did not file appropriate monthly financial reports from December 2013 through March 2014 resulting in a

delayed reconciliation o accounts during the remainder o the school year. In March, the Board approved

an administrative change to address the projected deficit. An Acting Interim Business Administrator was

appointed who after an analysis o the district revenues and expenditures advised the Belleville

Superintendent and the Essex County Executive Superintendent that the district was in deficit estimated to

be

$3,500,000.

After several meetings with the New Jersey Department o Education and the Commissioner a fiscal state

monitor was appointed to work with the administration, staff, Board, and the community to resolve the

district's deficit. In May the district notified over 100 staff members that a reduction in force could

impact their employment for the 2014-15 school. The district continued to work with the Executive

County Superintendent and the NJDOE to remedy the fiscal deficit and improve student performance.

The Belleville Board o Education was presented a report by the certified public accounting firm o Lerch,

Vinci

&

Higgins, LLC on June 16 2014 that indicated categorical over expenditures projected at

$4,827,126 resulting in an unassigned deficit

o

$3,605,033. The report was shared with the New Jersey

Department o Education.

7

FINANCIAL INFORMATION AT FISCAL YEAR END:

As demonstrated by the various

statements and schedules included in the financial section o this report, the District did not meet its

responsibility for sound financial management. The following schedule presents a summary

o

the general

fund revenues for the fiscal year ended June 30, 2014.

Revenue mount of Total

Local Sources

$

34,303,621

52.3

State Sources 31,093,966 47.4

Federal Sources 143,334

0.2

Total $

65,540,921 100.0

The following schedule presents a summary

o

general fund for the fiscal year ended June 30, 2014.


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Expenditures

mount

of

Total

Current Expense:

Instruction

43,640,706

61.6%

Support Services

26,408,284

37.2%

Capital Outlay

45,941

0.13%

Debt Service 789 132 1.13%

Total Expenditures

70,884,243 100%

8.DEBTADMINISTRATION: The District had no outstanding debt issues (serial bonds) smce

September 1996.

9. CASH MANAGEMENT: The investment policy o the District is guided in large part

by

state statute

as detailed in Notes to the Financial Statements , Note

2

The District has adopted a cash management

plan, which requires it to deposit public funds in public depositories protected from loss under the

provisions o the Governmental Unit Deposit Protection Act ( GUDP A ). GUDP A was enacted in 1970

to protect Governmental Units from a loss o funds on deposit with a failed banking institution in New

Jersey. The law requires governmental units to deposit public funds only in public depositories located in

New Jersey, where the funds are secured in accordance with the Act.

10. RISK MANAGEMENT: The Board carries various forms o insurance, including but not limited to

general liability, automobile liability and comprehensive/collision, hazard and theft insurance on property

and contents, and fidelity bonds.

11. OTHER INFORMATION:

A Independent Audit - State statutes require an armual audit by independent certified public accountants

or registered municipal accountants. The accounting firm o Lerch, Vinci

&

Higgins, LLP was selected by

the Board o Education. In addition to meeting the requirements set forth in state statutes, the audit also

was designed

to

meet the requirements o the Single Audit Act o 1984 and the related OMB Circular

A-133 and state Treasury Circular Letter 04-04 OMB. The auditor's report on the basic financial

statements and combining and individual fund statements and schedules is included in the financial

section o this report. The auditor's reports related specifically to the single audit are included in the

single audit section o this report.

Respectfully submitted,

~

Ricardo Acosta

Acting Superintendent o Schools

iv


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atoriPa.._Throut:fo Grant or/

'

U.S. Deparlmcntof Agrkulnu.,

p..,sed-lhrough Stnft Departmentof Edacalioo

Food Dislribul.ion

Progrnm

Food Dilribution

Progrnm

National School LW>oh Program

Nal.ionnl Sclwo LW>oh Program

Special Milk

Progrnm

National School Bceokfost Program

No.lionnl School Breakfast Program

Tola1 Enterprise FUIId

U.S. Ocparnnent f E d l l < : l l ~ o n P a s e d Throut:fo

sr.re Deparlmcntof Edueotion

General Fund

Education Jobs FW>d

Tooal

General Fund

U.S.

Deparlmcntof Heallil and

Human Serviceic

IDEA Part

B.

Basic

IDEA Port

B.

Preschool Handicapped

IDEA Port

B,

Preschool Handicapped

Carl D

Perlcins Vocotion

Educotion

Carl

D. Pl

lhrough

Soate Department ofEduCiltion

Hurricane S.ndy

U.S.

Department

of Education

Passed-Through

County

of Essex

Summer Youth Employment Training

Total

Speci,_l R ~ = u e Fund

Tooal Federal Awords

Federal

CFDA GrantorSflltc

Number Projoet Number

1()550

10.550

0.555

10.555

10.556

1().553

10.553

84.41

93.778

84.010

84.010

84.027

84.027

84.15

84.151

84.048

84.048

84.162

84.162

843&6

84.366

84.367

84367

84.416

97.036

7.265

WA

W

WA

NIA

WA

W

NiA

NIA

Grant

Period

7 / l / 1 3 ~ 3 0 / 1 4

711/12-6130113

7 1 1 1 3 ~ 3 0 / 4

71 112--6/30/ 3

7/1112--6/30113

711113--6130114

711112--6/30/B

71 .'l3-61301t4

71Jit3-6,]0/ 4

7/1113--6/30/14

9/ / 2--8/31113

7/1113-6130114

9/1/12-t /31113

7 1113--6130/14

9/ 112-t /31113

71 /13--6/30/14

9 1112-t /31113

711113--6/30/14

9 1112-t /31113

7/1/13--6130/14

9/ /12--8131113

9/1112-8131113

9 1106-8/31/07

9 1112-8131113

9Allll2-t l3 /13

7/01 12-61301 3

See

AOCOinp93 s

891.049

212.429

"

1,010

58,982

4.444

1.132.194

80,655

~ - ' ' ~ ' 0 0

1.242,117 1.276.275

~ - - ' ' - 5 ~

~ - - ' ' - 5 ~

~ - ' 9

Adju


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NOTES TO THE SCHEDULES OF EXPENDITURES OF

FEDERAL AWARDS AND STATE

FINANCIAL

ASSISTANCE

FOR THE FISCAL

YEAR ENDED

JUNE

30, 2014

NOTE

1

GENERAL

EXHIBITK 5

The accompanying schedules present the activity of all federal and state financial assistance programs of the Belleville

Township School District. The District is defined in Note l (A) to the Board's financial statements. All federal financial

assistance received directly from federal agencies, as well as federal awards and state financial assistance passed through

other government agencies

is

included on the schedules

of

expenditures

of

federal awards and state financial assistance.

NOTE 2 BASIS OF ACCOUNTING

The accompanying schedules are prepared and presented using the budgetary basis of accounting with the exception of

programs recorded

in

the food service fund, which are presented using the accrual basis

of

accounting. These bases

of

accounting are described in Notes 1 C) to the Board's financial statements. The information in these schedules is presented

in

accordance with requirements of U.S. OMB Circular A-133, Audits of States, Local Governments and Non-Profit

Organizations and New Jersey OMB Circular 04-04, Single Audit Policy for Recipients of Federal Grants, State Grants,

and State Aid . Therefore, some amounts presented in these schedules may differ from the amounts presented in or used in

the preparation of, the financial statements.

NOTE 3 RELATIONSHIP TO FINANCIAL STATEMENTS

The financial statements present the general fund and special revenue fund on a GAAP basis. Budgetary comparison

statements or schedules (RSI) are presented for the general fund and special revenue fund to demonstrate finance-related

legal compliance in which certain revenue is permitted

by

law or grant agreement to be recognized in the audit year, whereas

for GAAP reporting, revenue is not recognized until the subsequent year or when expenditures have been made.

The general fund

is

presented in the accompanying schedules on a modified accrual basis with the exception

of

the revenue

recognition of the delayed state aid payments in the current budget year, which is mandated pursuant to N.J.S.A. 18A:22-

44.2.. For GAAP purposes, those payments are not recognized until the subsequent year due to the state deferral and

recording of certain state aid payments in the subsequent year. The special revenue fund is presented in the accompanying

schedules on the grant accounting budgetary basis which recognizes encumbrances as expenditures and also recognizes the

related revenues, which may include the delayed state aid payments, whereas the GAAP basis does not. The special revenue

fund also recognizes the delayed state aid payments in the current budget year, consistent with N

J

.S.A. 18A:22-44.2.

The net adjustment to reconcile from the budgetary basis to the GAAP basis is a decrease of $756,654 for the general fund

and an increase

of

$100,035 for the special revenue fund. See the Notes to Required Supplementary Information for a

reconciliation of the budgetary basis to the modified accrual basis of accounting for the general and special revenue funds.

Awards and financial assistance revenues are reported in the Board's financial statements on a GAAP basis

as

presented

as

follows:

Federal State

Total

General Fund $

143,344

$

31,093,966 $

31,237,310

Special Revenue Fund 2,322,683 127,181 2,449,864

Food Service Fund

1,276,275 25,532

1,301,807

Total Financial Assistance $

3,742,302

$

31,246,679 $

34,988,981

112


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NOTES TO THE SCHEDULES

OF

EXPENDITURES OF

FEDERAL AWARDS ND STATE FINANCIAL ASSISTANCE

FOR THE

FISCAL YEAR ENDED JUNE 30,2014

NOTE

4 RELATIONSHIP TO FEDERAL

ND

STATE FINANCIAL REPORTS

EXHIBITK-5

Amounts reported

in

the accompanying schedules may not necessarily agree with the amounts reported

in

the related federal

and state financial reports due to timing differences between the District's fiscal year and grant program years.

NOTE 5 OTHER INFORMATION

Revenues and expenditures reported under the National School Lunch Program as non-cash assistance represent current year

value received and current year distributions, respectively

of

the Federal Food Distribution Program. TPAF Social Security

contributions

in

the amount

of

2,226,611 represents the amount reimbursed by the State for the employer's share

of

social

security contributions for TPAF members for the fiscal year ended June 30, 2014. The amount reported as TPAF Pension

System Contributions

in

the amount of 1,225,221 and TPAF Post-Retirement Medical Benefits Contributions

in

the amount

of 2,008,901 represents the amount paid by the State on behalf

of

the District for the fiscal year ended June 30, 2014.

NOTE 6 ON-BEHALF PROGRAMS NOT SUBJECT TO STATE SINGLE AUDIT

On-behalf State Programs for TPAF Pension and Post-Retirement Medical Benefits Contributions are not subject to a State

single audit and, therefore, are excluded from major program determination. The Schedule

of


provides a reconciliation

of

State financial assistance reported

in

the District's financial statements and the amount subject to

State single audit and major program determination.

ll


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EXHIBIT K-6


SCHEDULE

OF

FINDINGS AND QUESTIONED COSTS

FOR THE FISCAL YEAR ENDED JUNE 30, 2014

Part -

Summary ofAuditor s Results

Financial Statement Section

Type

of

auditors' report issued on financial statements

Internal control over financial reporting:

l

Material weakness(es identified?

2) Significant deficiencies identified that are

not

considered

to be

material weaknesses?

Noncompliance material to basic financial

statements noted?

Federal wards Section

Internal Control over major programs:

(1) Material weakness(es identified?

(2) Significant deficiencies identified that are not

considered to

be

material weaknesses?

Type of auditor's report issued on compliance for

major programs

Any

audit findings disclosed that are required to be reported

in accordance with section .5IO(a) ofCircular A-133?

Identification of major federal programs:

CFDA Number(s)

10.555

10.553

84.010

84.027

84.151

Dollar threshold used to distinguish between

Type A and Type B programs:

Auditee qualified as low-risk auditee?

114

Unmodified

_ _ : X : __ yes

no

_ _ : X : __ yes

none repmted

_

_ : X : __

yes

no

_

_.:.X.:..__yes

no

_

_ : X : __ yes

none reported

Unmodified

_ _:_X : __ yes

no

Name of Federal Program

or

Cluster

National School Lunch Program

National School Breakfast Program

Title I, Part A

IDEA - Part B Basic

IDEA- Part B Preschool

300,000

yes no


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EXHIBITK-6


SCHEDULE

OF

FINDINGS AND QUESTIONED COSTS (CO NT D)

FOR THE FISCAL YEAR ENDED JUNE 30 2014

Part Summary o Auditor s Results

State Awards Section

Internal Control over major programs:

(1) Material weakness(es) identified?

(2) Significant deficiencies identified that are not

considered to be material weakness( es )?

X yes

no

yes

_ _ _ X _ _

none reported

Type of auditor s report issued on compliance for

m jor progr ms

Any audit findings disclosed that are required to be reported

in accordance with N.J. Circular Letter 04-04?

Identification o major state programs:

GMIS Number(s)

495-034-5120-078

495-034-5120-083

495-034-5120-084

495-034-5120-089

495-034-5120-044

495-034-5120-002

Dollar threshold used to distinguish between

Type A and Type B programs:

Auditee qualified as low-risk auditee?

5

Modified

yes

no

Name o State Program

Equalization Aid

Education Adequacy Aid

Security Aid

Special Education Aid

Extraordinary Aid

TPAF Social Security

863,076

yes

:_:___

no


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BELLEVILLE TOWNSHIP S HOOL DISTRI T

SCHEDULE

OF


FOR

THE


Part 2 Schedule

of

Financial Statement Findings

EXHIBIT K-6

This section identifies the reportable conditions, material weaknesses, and instances of noncompliance related to the

basic financial statements that are required to

be

reported

in

accordance with paragraphs 5.18 through 5.20

of

Government Auditing Standards

Finding 2014-001

With respect to fund deficits and budget line item overexpenditures:

The District ended the fiscal year with a General Fund operating deficit in the amount of 3,712,426 at

June 30, 2014.

We noted approximately ninety (90) budget line accounts were overexpended at June 30, 2014.

In

addition,

we noted the total General Fund budget appropriations were overexpended by 4,636,201

at

June 30,2014.

riteria

or

specific requirement

GAAP Technical Systems Manual; NJAC 6A:23A-16.1 0

Condition

The General Fund expenditures exceeded revenues resulting in an operating deficit at June 30, 2014. Numerous

budgetary line items expenditures exceeded available appropriations resulting in overexpenditures.

Context

See Finding 2014-001

The District incurred expenditures without sufficient appropriations available resulting in an operating deficit as

of June 30, 2014 in the General Fund.

Unknown.

Recommendation

The District develop, approve and implement a corrective action plan to eliminate the general operating

deficit at year end and to ensure internal control procedures are in place to prevent operating deficits

from occurring in future years.

Internal control procedures be reviewed and revised to ensure corrective measures are taken to prevent

the incurring of expenditures in excess of available budget appropriations during the year.

View

of

Responsible Officials

and

Planned Corrective Action

Management has reviewed this finding and has indicated that corrective action will be taken.

6


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BELLEVILLE TOWNSHIP SCHOOL

DISTRICT

SCHEDULE

OF

FINDINGS

AND

QUESTIONED COSTS

FOR

THE FISC L

YE R

ENDED JUNE 30, 2014

Part 2

Schedule

ofFinancial Statement Findings

EXHIBIT

K-6

This section identifies the reportable conditions, material weaknesses, and instances

of

noncompliance related to the

basic financial statements that are required to be reported

n


of


Finding

2014-002

We noted prior to the commencement of our audit, the District s financial accounting and reporting and payroll

computer systems crashed and many of the District financial transactions were lost n the system.

t

appears the

District s computer back-up procedures were inadequate.

Criteria or

specific requirement

Internal Controls Over Financial Reporting.

Condition

The procedures utilized by the District included a daily back-up which was saved and stored onsite.

t

appears

the back-up tape utilized was corrupt. As a result, the District was unable to retrieve information after the system

crashed. No offsite back-up

of

financial transactions was performed.

Context

See Finding 2014-002.

The District s financial transactions could be lost and unretrievable. The District re-entered transactions from

source documents that were lost as a result of the system crash while other information was retrieved by the

software vendor.

Inadequate data back-up and recovery procedures.

Recommendation

Internal controls be reviewed and revised to ensure daily computer back-up procedures are adequate to prevent the

loss

of

financial information and transactions n the future.

View

of

Responsible Officials and Planned Corrective Action

Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action is

taken.

117


147/181

BELLEVILLE TOWNSHIP

S HOOL DISTRI T

SCHEDULE

OF


FOR

THE FISCAL YEAR ENDED JUNE 30, 2014

Part 2 Schedule

of


EXHIBITK-6


of


basic financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20 of


Finding 2014-003:

Our audit with respect to the examination

of

claims:

We were not provided with invoices or other suppotting documentation for several payments issued during

the fiscal year.

In

some instances the invoices or supporting documentation were not clerically accurate or

sufficiently detailed to support the goods or services being paid for by the District.

Our audit revealed purchases were made and contracts were entered into prior to the approval and issuance

of

a purchase order (confirming orders).

riteria

or

specific requirement:

Internal controls over purchasing and accounts payable.

Condition:

Purchase of various goods or services were made which were not in accordance with the procedures specified in

Board policy and N.J.S.A. 18:19-4.

Context:

Effect:

Cause:

Of

the disbursements reviewed, we noted:

Thirty-one (31) disbursements were either not supported with a vendor invoice or the suppmting

documentation provided was insufficient. Total amount unsupported was 2,143,608.

Three (3) disbursements did not appear to be clerically accurate.

Twenty (20) disbursements were noted in which the date

of

the invoice preceded the purchase order date.

Lack

of

internal controls pertaining to vendor payments and purchases may result in unauthorized payments.

Unknown.

8


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BELLEVILLE TOWNSHIP

S HOOL

DISTRICT

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR

THE

FISCAL YEAR ENDED JUNE 30, 2014

Part 2 Schedule

of


EXHIBITK-6


of

noncompliance related

to

the

basic financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20

of


Finding 2014-003: Continued)

Recommendation:

Payments to vendors be made only after invoices or supporting documentation are provided, verified and in

agreement to amounts supported for payment.

n

all instances a properly executed purchase order be approved and issued prior to the purchase

of

goods or

rendering

of

services to ensure confirming orders do not occur.

View

of

Responsible Officials and Planned Corrective Action:

Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action is taken.

119


149/181

BELLEVILLE

TOWNSHIP

SCHOOL

DISTRICT


FOR THE

FISCAL

YEAR ENDED JUNE 30 2014

Part Schedule o Financial Statement Findings

EXHIBITK-6

This section identifies the reportable conditions material weaknesses and instances

of




Finding 2014-004:

Our audit of the payroll tax reporting revealed the quarterly payroll tax filings were not always remitted to the

Federal and State Agencies in a timely manner. We noted penalties and interest were charged to the District on

numerous occasions for the late submissions

of

Federal Fotm 941 State Forms NJ927 and NJWR-30.

Criteria or specific reguirement:

Intemal controls pettaining to payroll tax reporting.

Condition:

The District has incurred penalties and accrued interest due to the late filing and payment of

payroll related

liabilities.

Context:

Effect:

Cause:

The District did not file Federal Form

94

for the quarters ending September 30 2013 December 31

2013 March 31 2014 or June 30 2014 by the required due dates. The District was unable to provide

documentation to support that forms were filed for all quarters for the school year.

The District did not file State Form 927 for the quarters ending September 30 2013 December 31 2013

or March 31 2014 by the required due dates.

The District is incurring penalty and interest charges for failing to file quarterly reports in a timely manner.

Unknown.

Recommendation:

The District remit its Federal and State quarterly payroll tax filing in a timely manner.

View of Responsible Officials and

Planned

Corrective Action:

Management has reviewed this finding and indicated it will revise its procedures

to

ensure corrective action is taken.

120


150/181


SCHEDULE

OF

FINDINGS

AND

QUESTIONED COSTS

FOR

THE


Part 2 Schedule

of


EXHIBITK 6


basic financial statements that are required to be reported

in


of


Finding 2014-005

Our audit revealed that the balance in the payroll deduction account was not sufficient to pay the amounts due to

the various agencies at June 30, 2014. An audit adjustment was required to record an interfund due from the

General Fund in the amount of 365,404 at year end.

Criteria or


Internal controls over payroll processing and reporting,

Condition:

See Finding 2014-005

Context

The District payroll agency account balance

of

702,492 at June 30, 2014 was insufficient to pay the amounts

due at year end by 365,404.

An interfund balance was required from General Fund to fund liabilities in excess of the available balance at year

end in the payroll deduction account.

Unknown.

Recommendation

The required amounts be deposited into the payroll agency account for each payroll period during the year.

View

of

Responsible Officials and Planned Corrective Action


2


151/181

BELLEVILLE TOWNSHIP

SCHOOL

DISTRICT

SCHEDULE OF FINDINGS

ND

QUESTIONED COSTS

FOR


Part 2 Schedule

of


EXHIBITK 6


basic financial statements tliat are required to

be

reported

in


of


Finding 2014-006

With respect to year end encumbrances and accounts payable:

Our audit of year end open purchase orders

in

the General and Special Revenue Funds revealed certain

encumbrances should have been classified as accounts payable and certain encumbrances were deemed

overstated at June 30, 2014. Audit adjustments were maae to reclassifY and cancel these purchase orders,

accordingly.

Our audit of payments made subsequent to June 30,2014 revealed unrecorded liabilities and encumbrances

that were not reflected in the Distnct's accounting records at year end. Audit adjustments were made to

record these amounts.

Criteria or specific requirement:

Internal controls over year end closing procedures of open orders.

Condition

Certain encumbrances were determined to not have been classified properly, or were overstated and deemed

invalid at year end. n addition, certain encumbrances and accounts payable were not recorded at year end.

Context

Seven (7) purchase orders classified as reserve for encumbrances should have been classified as accounts

payable totaling 24 I ,645 in the General Fund and 22,989 in the Special Revenue Fund.

Reserve for encumbrances recorded in the General and Special Revenue Funds totaling 239,233 were

determined to be overstated.

Liabilities and encumbrances for retiree compensated absence payouts, legal expenses, worker compensation

contribution, tuition payments and gasoline for District vehicles were not recorded at June 30,2014.

o Total unrecorded payables were 269,062

o Total unrecorded reserve for encumbrances were 35,000

Financial statements do not properly reflect liabilities, expenditures and fund balance at year end.

Unknown.

Recommendation

Procedures be reviewed and revised to ensure open purchase orders are reviewed at year end for appropriateness and

proper classification as accounts payable or encumbrances.

Greater care be taken at year end to ensure all liabilities and encumbrances are recorded in the District's accounting

records at June 30.

View of Responsible Officials and Planned Correct ive Action

Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action

is

taken.

22


152/181



AND

QUESTIONED COSTS

FOR

THE


Part 2 Schedule ofFinancial Statement Findings

EXHIBITK 6


of


basic financial statements that are required to be reported in accordance with paragraphs 5 18 through

5.20

of


Finding 2014-007

Our audit of the District's year end bank reconciliation balances revealed the District's general operating account

cash balance was in an overdraft or deficit position of 1,365,369 at June 30, 2014. In addition, we noted the

workers' compensation claims account cash balance was also in

an

overdraft or deficit position of

8,010

at year

end.

Criteria or


Internal controls over cash disbursements.

Condition:

Cash balances at June

30, 2014

in the General Fund and Internal Services were in deficit positions.

Context

See finding

2014-007

Funds are not available for checks issued for payment.

Unknown.

Recommendation

Internal controls be enhanced to ensure cash balances are monitored to prevent cash overdrafts from occurring.

View

of


and

Planned Corrective Action


123


153/181



FOR

THE FISCAL YEAR ENDED JUNE 30 2014

Part

Schedule


EXHIBITK 6


o


basic financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20 o


Finding 2014-008

We noted the financial transactions o a 1,025,000 capital lease bank account with First Hope Bank for a roofing

project and a 1,950,000 capital lease bank account with TD Bank for security and network upgrades were not being

recorded in the District's accounting records. n addition, the payments made by the banks (fiscal agents) to vendors

from these accounts were not included

on

the bills list and therefore not approved by the Board in the official

minutes.


State Department o Education's GAAP Technical Accounting Manual

Condition:

The transactions relating to the

roo

project and security/network upgrades capital lease bank accounts

maintained by the Fiscal Agents were not reported on the District's accounting records or included

in

the

Treasurer's report.

Context

The transactions related to the 1,025,000 roof project capital lease and 1,950,000 security/network upgrades

capital lease bank accounts were not reflected in the District's records during the year and, therefore, were not

included

in

the Treasurer's report.

Accounting records did not reflect all financial transactions o the District.

Unknown.

Recommendation

The District record all the transactions o its capital lease bank accounts

in

their financial accounting records. n

addition, payments to vendors be included

on

the bills list presented to the Board, be approved by Board action and

be made part o the official minutes prior to payment by the Fiscal Agent.

View of Responsible Officials and Planned Corrective Action


124


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155/181


156/181



FOR THE FISCAL YEAR ENDED JUNE

30 2014

Part

Schedule


EXHIBITK 6


of




Finding 2014 011:

Our audit of the District's capital assets revealed capital assets were not updated for

2

13/2014 school year

additions and deletions.


Generally Accepted Accounting Principles.

Condition:

The District did not update its capital asset records for additions and deletions for the fiscal year ended June 30,

2014.

Context:

Effect:

Cause:

The District's total governmental activities and business-type activities capital assets and accumulated

depreciation, as reported in the CAFR, are 23, 0,863 and 74,851,174, respectively. Current year additions, as

reflected in the District's budgetary reporting system, were 2,756,190.

The District capital asset records may not agree with actual values of District owned assets.

Capital assets acquired during the year were not identified and recorded in the District' s capital asset accounting

records.

Recommendation:

The District update its capital asset records on a timely basis to reflect all current year activity.

View

of

Responsible Officials and Planned Corrective Action:


127


157/181


SCHEDULE

OF FINDINGS AND QUESTIONED

COSTS

(CONT D)

FOR

THE

FISCAL YEAR ENDED

JUNE

30, 2014

Part Schedule

of

Federal and State ward Findings nd Questioned Costs

EXHIBITK-6

This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including

questioned costs, related to the audit

of

major federal and state programs, as required by OMB Circular A-133 and New

Jersey

OMB s

Circular 04-04, as amended.

CURRENT YEAR FEDERAL AWARDS

Finding 2014-012:

Our audit of salary charges to the NCLB Title I grant program revealed the following:

Employees and their respective salaries charged to the program were not formally approved

in

the

Board minutes.

An instance was noted for an employee charged to the program who was not included on the time and

effort activity report for Title I

Federal Program

Information:

Title I

84.010A

Criteria

or

Specific Requirement

Federal Grant Compliance

Supplement-

Employee Time and Effort

Condition:

Salaries of individuals charged to the Title I grant program were not approved by the Board. The time and effort

report was not provided for one

I)

individual.

Questioned Costs:

Undeterminable.

Context:

Effect:

Cause:

We noted none of the individuals charged to Title I were approved in the official minutes

by

grant title and salary

amount allocated. We noted the time and effort repmt was not provided for one

I)

individual.

Personnel charged to Federal grants may not be allowable grant charges.

Unknown.

Recommendation:

Employees and their respective salaries charged to the NCLB Title I grant program be formally approved in the

Board minutes. In addition, all employees charged to the NCLB Title I grant program be included on the time and

effort activity report to support their salary amount charged to the grant program.

View

of


and

Planned

Corrective

Action:

Management has reviewed this finding and indicated it will review and revise its procedures to ensure corrective

action is taken.

28


158/181


SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT'D)

FOR


Part Schedule ofFederal nd State ward Findings nd Questioned Costs

EXHIBITK 6



of

major federal and state programs, s required by OMB Circular A-133 and New

Jersey OMB's Circular 04-04, as amended.


Finding 2014-013:

Our audit of the NCLB Title I grant program revealed employee benefits charged were not properly suppmied

by

a

detail calculation nor were they charged on a monthly basis. We noted the District made n entry at year end to

reallocate General Fund employee benefit charges to the grant program.

Federal Program

Information:

Title

84.010A

Criteria or

Specific

Requirement

Federal Grant Compliance Supplement Allowable Costs/Cost Principles

Condition:


Onestioned Costs:

Undeterminable.

Context:

Effect:

Canse:

The District was unable to provide us with documentation to support the amount charged to the Federal grant

program for employee benefits in the amount of 126,472.

Employee benefits charged to Federal grants may not be for allowable charges.

District did not prepare a detailed analysis of employee benefit costs allocated to the grant program.

Recommendation:

Employee benefits charged to the NCLB Title grant program be supported

by

an analysis detailing the basis for the

amount allocated to the program and the benefits be charged when paid throughout the grant period.


Planned

Corrective Action:


action is taken.

129


159/181




Part Schedule

of

Federal and State ward Findings

nd

Questioned Costs

EXIllBIT K-6



of


Jersey

OMB s



Finding 2014-014:

Our audit revealed charges to the NCLB Title I grant program for payments made to Standard Solutions, LLC for

professional development cost that appear to be for all District staff rather than specific to Title I staff members.

Federal

Program Information:

Title I

84.0IOA

Criteria or Specific Requirement

Federal Grant Compliance Supplement- Allowable Costs/Cost Principles

Condition:


Questioned Costs:

Unknown.

Context:

Effect:

Canse:

The District charged 162,192 to the program for Standard Solutions, LLC for professional development charges

that appear to include non-Title I District employees.

Professional development amounts charged to the grant program may not be for allowable charges for eligible

employees.

Unknown.

Recommendation:

The District discontinue the practice of charging the Title I grant programs for professional development costs for

District staff members not related to the Title I program.

View of Responsible Officials and Planned Corrective Action:


action is taken.

13


160/181


SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)

FOR

THE


Part Schedule

of

Federal

and

State Award Findings

and

Questioned Costs

EXHIBITK-6

This section identifies the significant deficiencies, material weaknesses, and instances

of

noncompliance, including

questioned costs, related

to

the audit of major federal and state programs, as required by OMB Circular A-133 and New

Jersey OMB s Circular 04-04, as amended.

CURRENT YE R

FEDER L

AWARDS

Finding 2014-015:

Our audit of the applications for free and reduced price meals noted the following exceptions:

Three (3) applications approved as free did not meet the eligibility requirement for free meals. These

applications should have been approved for reduced price meals.

One I) application approved as reduced did not meet the eligibility for reduced price meals. Thi

application should have been denied.

Two (2) applications approved as reduced met the eligibility requirements of free meals. These applications

should have been approved for free meals.

Four (4) applications were not located and, therefore, unavailable for audit. The students selected on these

applications were all classified as reduced

on

the list provided for audit.

We noted the applications for the 2013/2014 school year were not filed in an orderly and systemic manner.

Federal Program

Information:

National School Lunch Program

National School Breakfast Program

10.555

10.553

Criteria or Specific Requirement

Federal Grant Compliance Supplement- Eligibility

Condition:


Questioned Costs:

Undeterminable.

Context:

Effect:

Six (6)

of

the seventy one (71) students selected were reported in a category different from the category the

individual was determined to be eligible. Additionally, the District was unable to locate the lunch applications

for four (4) students selected.

Meals claimed for reimbursement may be inaccurately reported.

3


161/181



ND

QUESTIONED COSTS (CONT D)

FOR

THE FISCAL YEAR ENDED JUNE 30,2014

Part

Schedule of

Federal and State Award Findings

and

Questioned Costs

EXHIBITK-6



of

major federal and state programs,

as

required by OMB Circular A-133 and

New

Jersey

OMB s



Finding 2014-015: (Continued)

Cause:

Eligibility

of

individuals was not properly determined or supported by the District.

Recommendation:

Greater care be exercised in the determination

of

eligibility for free and reduced price meals of the child nutrition

programs.

In

addition, applications be filed in an orderly and systemic manner in accordance with the requirements

of

the child nutrition programs.

View of Responsible Officials

and

Planned Corrective Action:

Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action

is

taken.

132


162/181



FOR

THE FISCAL

YEAR ENDED

JUN

30, 2014


EXHIDITK-6


of



of

major federal and state programs, as required by OMB Circular A-133 and

New

Jersey

OMB s


CURRENT YEAR STATE AWARDS

Finding 2014-016

With respect to fund deficits and budget line account overexpendiutres:

The District ended the fiscal year with a General Fund operating deficit in the amount of 3,712 ,426 at

June 30,2014.

We noted approximately ninety (90) budget line accounts were overexpended at June 30, 2014. n

addition,

we

noted the total General Fund budget appropriations were overexpended by 4,636,201 at

June 30, 2014.

State Program Information:

Equalization Aid



Security Aid

Criteria or


495-034-5120-078

495-034-5120-083

495-034-5120-089

495-034-5120-084

State Grant Compliance

Supplement-

State Aid

Public-

Special Tests and Provisions

Condition:


Questioned

Costs:

Unknown.

Context:


Effect:

The District incurred expenditures without sufficient appropriations available resulting in an operating deficit as

of

June 30, 2014 in the General Fund.

133


163/181




Part3 Schedule ofFederal and State ward Findings and Questioned Costs

EXHffiiTK-6


of


questioned costs, related to the audit of major federal and state programs, as required by OMB Circular A 133 and New

Jersey

OMB s


CURRENT YEAR STATE AWARDS (Continued)

Finding 2014-016 (Continued)

Cause:

Unknown.

Recommendation:

The District develop, approve and implement a corrective action plan to eliminate the general operating

deficit at year end and to ensure internal control procedures are in place to prevent operating deficits from

occurring in future years.

Internal control procedures be reviewed and revised to ensure corrective measures are taken to prevent the

incurring of expenditures

in

excess of available budget appropriations during the year.

View of Responsible Officials and Planned Corrective Action:


134


164/181

BELLEVILLE TOWNSHIP

SCHOOL

DISTRICT


FOR

THE FISCAL YEAR ENDED JUNE 30,2014


EXHIBITK-6



of




Finding 2014-017:

With respect to travel and expense reimbursements, our audit noted the following:

The District did not establish by Board resolution a maximum travel expenditure amount for the

budget year for which the District will not exceed,

as

required by Board policy.

Purpose and relevance statements were not attached to the travel requests or purchase orders as

required

by

Board policy.

Instances for reimbursement of travel expenses to certain individuals for travel events that were not

pre-approved by the Board

as

required by Board policy.

Instance where the hotel room rate paid was in excess

of

the GSA approved room rate

for

the

respective event location.

State


Equalization Aid



Security Aid

495-034-5120-078

495-034-5120-083

495-034-5120-089

495-034-5120-084

Criteria or


State Grant Compliance Supplement State Aid

Public


Condition:

Certain travel expense procedures and policies are not in accordance with Board policy and State travel expense

guidelines.

Questioned Costs:

Unknown.

Context:

Effect:


Certain travel expense reimbursements and costs may not be allowable per Board policy and State travel expense

guidelines.

35


165/181

BELLEVILLE

TOWNSIDP SCHOOL

DISTRICT


FOR THE FISCAL YEAR ENDED JUNE 30,2014

Part Schedule

of

Federal and State Award Finding f

nd

Questioned Costs

EXHIBITK 6



of





Cause:

Unknown.

Recommendation:

The District annually establish by Board resolution a maximum travel expenditure amount which it will

not exceed for the budget year, in accordance with Board policy.

With respect to travel expense reimbursements, the District adhere to Board policy to ensure:

o Purpose and relevance statements are attached to travel requests or purchase orders.

o All travel events be pre-approved by Board resolution.

o Lodging room rates be verified to the GSA approved rates prior to booking overnight travel.

View of Responsible Officials

and Planned

Corrective Action:

Management has reviewed this finding and indicated it will review and revise its procedures

to

ensure corrective

action s taken.

136


166/181

BELLEVILLE

TOWNSHIP

SCHOOL DISTRICT

SCHEDULE

OF

FINJ)INGS AND QUESTIONED COSTS (CONT D)

FOR

THE



EXHIBITK-6



of



CURRENT YEAR

STATE AWARDS

Finding

2014-018:

Our audit revealed certain certificated staff salaries that were not classified and charged to the proper budget account

lines

in

accordance with the Uniform Minimum Chart of Accounts.

State


Equalization Aid



Security Aid

495-034-5120-078

495-034-5120-083

495-034-5120-089

495-034-5120-084

Criteria

or Specific

Requirement


Supplement-

State Aid

Public-


Condition:

School administrative salary expenditures were classified and charged to General Administration and

Improvement of Instruction Services line accounts rather than School Administration budget line accounts.

Questioned Costs:

Unknown.

Context:

Effect:

Cause:

Two (2) principals and the athletic director were not charged to the school administration budget line accounts.

The District

is

not

in

compliance with the State

of

New Jersey Grant Compliance Supplement

and

Uniform

Minimum Chart

of

Accounts.

Unknown.

37


167/181

BELLEVILLE TOWNSHIP

SCHOOL

DISTRICT

SCHEDULE

OF

FINDINGS

AND

QUESTIONED

COSTS (CONT D)

FOR THE

FISCAL YEAR

ENDED

JUNE 30,2014

Part Schedule

t f

Federal and State ward Findings and Questioned Costs

EXHIBITK-6

This section identifies the significant deficiencies material weaknesses and instances of noncompliance including

questioned costs related to the audit

of

major federal and state programs as required by OMB Circular A-133 and

New

Jersey

OMB s

Circular 04-04 as amended.

CURRENT

YEAR STATE AWARDS

Finding 2014-018:

(Continned)

Recommendation:

A review be made

of

certificated staff to ensure their salaries are charged to the proper budget account lines in

accordance with the Uniform Minimum Chart

of

Accounts for New Jersey Public Schools.


Planned

Corrective Action:


action is taken.

138


168/181

BELLEVILLE TOWNSHIP

SCHOOL

DISTRICT


FOR

TH FISCAL YEAR ENDED

JUNE

30,2014

Part Schedule

of

Federal and State ward Findings

nd

Questioned Costs

EXHIBITK 6



of



CURRENT YEAR STATE A WARDS

Finding 2014-019:

With respect to the monthly financial reports of the Board Secretary and Treasurer of School Monies:

We noted the monthly Board Secretary s reports were not submitted to and approved by the Board for the

entire 2013/2014 school year, as required by N.J.S.A. 8A: 17-36.

The Treasurer s monthly reports or similar type cash reports were not completed timely and submitted to the

Board for their approval for the months

of

December 2013 through June 30,2014. We noted the Treasurer

resigned in 2014, effective December 31, 2013.

State

Program

Information:

Equalization Aid



Security Aid

Criteria

or Specific Requirement:

495-034-5120-078

495-034-5120-083

495-034-5120-089

495-034-5120-084


Supplement

State Aid

Public


Condition:


Questioned Costs:

Unknown.

Context:


Effect:

Financial statements and transactions could be misstated without proper and timely completion, submission and

approval of Monthly Board Secretary reports and Treasurer s reports.

Cause:

Unknown.

139


169/181




Part Schedule ofFederal and State ward Findings nd Questioned Costs

EXHIBITK-6



of





Recommendation:

The monthly financial reports

of

the Board Secretary be submitted to and approved

by

the Board

in

accordance with the requirements ofN.J.S.A. 8A: 17-36.

The monthly reports of the Treasurer or similar reports of the Board designee be completed and submitted to

the Board

for

approval

in

a timely manner

in

accordance with N.J.S.A. 18A:l7-36 or 18A:l7-9, as required.


Planned

Corrective Action:


action

is

taken.

140


170/181



FOR

THE


Part Schedule ofFederal and State ward Findings nd Questioned Costs

EXIDBIT K-6



of



CURRENT YEAR STATE A WARDS

Finding 2014-020:

The District had aggregate budget transfers to administrative budget lines that on a cumulative basis exceeded

10 of the total of the advertised administrative budget line. The cumulative transfers over 10 were noted

prior to the appointment of the State Monitor and they were not submitted to nor approved by the Executive County

Superintendent.

State Program Information:

Equalization Aid



Security Aid

495-034-5120-078

495-034-5120-083

495-034-5120-089

495-034-5120-084

Criteria

or Specific Requirement:

State Grant Compliance Supplement State Aid Public Special Tests and Provisions

Condition:

The monthly and year to date 0 transfer reports were not submitted to the Executive County Superintendent or

State Monitor. Certain transfers which exceeded the maximum allowed were not submitted to the County for

approval.

Questioned Costs:

Unknown.

Context:

Effect:

Cause:

Monthly transfer repmts were not submitted to the Executive County Superintendent. Transfers were made into

General Administration and Central Services exceeding 10 which require approval of the Executive County

Superintendent or the State Monitor.

The District is not

in

compliance with State Aid Grant program requirements.

Unknown.

Recommendation:

Executive County Superintendent's or State Monitor's approval be sought as required for all transfers that exceed ten

percent (10 ) of the original advertised budget appropriation amount

in

accordance with

N.J.A.C.

6A:23A-13.3(g).


Planned

Correct ive Action:


action is taken.

141


171/181


172/181

BELLEVILLE

TOWNSHIP

SCHOOL

DISTRICT


FOR THE FISCAL YEAR ENDED JUNE

30, 2014

Part Schedule

of

Federal

nd

State Award Findings

nd

Questioned Costs (Cont d)

EXHIBITK 6


of



of

major federal and state programs, as required

by

OMB Circular A-133 and New


CURRENT YEAR STATE AWARDS (Continued)


Context:

Effect:

Cause:

Purchases and contracts for instructional support, outsourcing of Information Technology Department, technical

support for the telephone internet technology management system, computer supplies, professional development

services, grant writing, payment of lunch aides to the food services management company and other services

were made in excess of the bid threshold for which documents were unavailable to determine if awards were

procured through public bids advertised or other required processes in accordance with Public School Contracts

Law.

Purchases for printing services and computer supplies were made in excess

of

the quote threshold for which

documents were unavailable to determine if quotations were solicited in accordance with the Public School

Contracts Law.

Noncompliance with requirements

of

the Public School Contracts Law.

Unknown.

Recommendation:

Internal control procedures over purchasing be reviewed and revised to ensure all contract awards and

purchases which exceed the bid threshold are made in accordance with the requirements of the Public

School Contracts Law.

In

addition, documentation be maintained on file and made available for audit to

support the District s compliance with the procedures required under the Public School Contracts Law

(N.J.S.A. 8A: 18A).

Purchasing procedures be enhanced to ensure competitive quotations are solicited and attached to purchase

orders for

all

contract awards that exceed the quote threshold in accordance with N.J.S.A. 8A: 18A-37(a).

All payments for services unrelated and outside of the food service management company s contract be

procured separately

in

accordance with N.J.A.C. 5:34-4.4(b).

Views of Responsible Officials

and

Planned Corrective Action Plan:

Management has reviewed this finding and has indicated it

will

review and revise its procedures to ensure

corrective action is taken.

43


173/181

BELLEVILLE

TOWNSHIP

SCHOOL DISTRICT


FOR

THE

FISCAL

YEAR ENDED JUNE 30,2014

Part Schedale ofFederal and State ward Findings nd Questioned Costs

EXHIBITK-6


questioned costs, related to the audit of major federal and state programs, as required by OMB Circular A-133 and New



Finding 2014-022

We noted an emergency contract award for an inventory of district hardware and IT infrastructure assets as well as

IT support for a ninety day period where the written statement of emergency from District personnel required

by

N.J.S.A. lSA:ISA-7 was not available for review. In addition, we noted the required notification to the Executive

County Superintendent

of

an emergency contract award does not appear to have been made

in

accordance with

N.J.A.C. 5:34-6.1.

State

program

information:

Equalization Aid



Security Aid

495-034-5120-078

495-034-5120-0S3

495-034-5120-0S9

495-034-5120-0S4


State Grant Compliance Supplement- State

Aid

Public- Special Tests and Provisions

NJSA SA: SA- Public School Contracts Law

NJAC 5:34-6.1- Emergency Contracts

Condition:


Questioned Costs:

Unknown.

Context:

Effect:

Cause:

We noted one (I) emergency contract awarded

in

which the District was unable to provide documentation of the

required written statement

of

emergency and notification to the Executive County Superintendent.

Noncompliance with requirements

of

the Public School Contracts Law.

Unknown.

44


174/181

BELLEVILLE

TOWNSHIP

SCHOOL DISTRICT

SCHEDULE

OF

FINDINGS AND QUESTIONED COSTS (CONT D)

FOR

THE FISCAL YEAR ENDED JUN 30, 2014


EXHffiiTK 6



of

major federal and state programs, as required by OMB Circular A 133 and New


CURRENTYEARSTATEAWARDS


Recommendation:

Emergency contract awards be supported by the required written statement of emergency and notification of

emergency contract award be made to the Executive County Superintendent as required by N.J

.A.

C. 5:34-6.1.

Views

of


and Planned

Corrective Action Plan:

Management has reviewed this finding and has indicated it will review and revise its procedures to ensure

corrective action

is

taken.

145


175/181


176/181

BELLEVILLE TOWNSIDP SCHOOL DISTRICT


FOR TH FISCAL YEAR ENDED JUNE 30, 2014


EXHIBITK-6



of

major federal and state programs, as required by OMB Circular A 133 and New




Recommendation:

Change orders to original contract awards for capital projects be approved by the Board and made part of the official

minutes in accordance with N.J.A.C. 6A:23A-2l.l(c)

Views

of


and Planned

Corrective Action Plan:

Management has reviewed this finding and has indicated it will review and revise its procedures

to

ensure

corrective action is taken.

147


177/181



AND

QUESTIONED COSTS (CONT D)

FOR

THE FISCAL YEAR ENDED JUN 30, 2014


EXHIBITK-6


of



of




Finding 2014-024

A review of students Individual Education Plans (IEP) revealed certain students reported on the application for

State Extraordinary Aid did not have an intensive related service specifically included in their IEP. A minimum

of

one intensive related service is required to be included

in

a student s IEP to be eligible for inclusion on the

Extraordinary Aid application.

State program information:

Extraordinary Special Education Aid 100-034-5120-473


State Grant Compliance Supplement- Extraordinary Aid- Eligibility

Condition:

Certain students inclu

Belleville Financial Report 2013-2014

Documents

Transcript of Belleville Financial Report 2013-2014