Repeat Finding: Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2018-001.

Recommendation: We recommend the District continue to evaluate its financial reporting process to determine if an internal control policy over the annual financial statements is beneficial.

Views of responsible officials and planned corrective actions: of responsible officials and planned corrective actions: There is no disagreement with the audit finding. The Director of Business Affairs reviews the drafted financial statements and footnote disclosures prior to issuance of the financial statements. This includes comparing information in the financial statements to the UFARS Compliance Table and other District documents. Since the District does not possess the expertise to ensure all required disclosures are included in the financial statements, the District will rely upon the audit firm for completeness of these disclosures.

## Finding: 2019-002 – Financial Statement Findings of Student Activity Accounts PROCEDURES TO PROVIDE ASSURANCE THAT ALL CASH COLLECTIONS ARE RECORDED IN THE ACCOUNTING RECORDS

Condition – The District has not established accounting procedures to provide assurance that all cash collections are recorded in the accounting records. The District records student activity revenues on the cash basis and does not have an accounting system and internal controls in place to ensure all student activity receipts have been collected and recorded. The potential exists that a material misstatement could occur in the financial statements and not be prevented or detected by the District’s internal controls.

Effect – The potential exists that a material misstatement could occur in the financial statements and not be prevented or detected by the District’s internal controls.

Views of responsible officials and planned corrective actions: of responsible officials and planned corrective actions: There is no disagreement with the audit finding. The District records student activity revenues on the cash basis and does not have an accounting system and internal controls in place to ensure student activity revenues and receipts have been properly recorded. In consideration of the guiding principles under which the student activity funds were established, the District provides opportunities for substantial student involvement in the selection, direction, and management of fundraisers. This student involvement, although of great value to those students, is an inherent internal control weakness. The District has determined the costs of implementing controls over fundraising activities, in light of the multiple locations and times of these activities, outweigh the benefits; therefore, the District will continue to rely on activity fund advisors for appropriate oversight and supervision, but will not, at this time, implement procedures and policies to provide for detail internal control processes at each fund raising location and activity.

## Finding: 2019-003 – Internal Control over Compliance with the Manual for Activity Fund Accounting INAPPROPRIATE EXPENDITURES UNDER MANUAL FOR ACTIVITY FUND ACCOUNTING GUIDANCE

Condition – – A student activity account disbursement was made to pay for an athletic trainer’s services at a student activity event. According to the Manual for Activity Fund Accounting for accounts not under board control, inappropriate expenditures for student activity accounts include labor or service payments. When student activity accounts need to reimburse the District for contracted services, the payment will be through the general fund of the District through usual district procedures.

## Effect

– This disbursement was not in compliance with the Manual for Activity Fund Accounting.

Views of responsible officials and planned corrective actions: of responsible officials and planned corrective actions: There is no disagreement with the audit finding. The District will ensure that such services are paid for by the through the District’s general fund and reimbursed by the student activity account going forward.

## Year: 2019-2020 Date of Report: October 27, 2020 Auditor: MMKR