Audit turns up good news for Wadena-Deer Creek School District
Only one issue was discovered, a lack of segregation of duties, a finding that is common in smaller organizations.
The Wadena-Deer Creek School Board was given the results of an audit during the Monday, Nov. 21 board meeting.
The audit was conducted by Eide Bailly, an accounting firm located in Fargo, North Dakota.
“During fiscal year 2022, the district expended $2.7 million (of federal awards), approximately, which triggered that federal audit. Very common that your district exceeds that threshold and then we are required to do that audit,” said Brian Stavenger, CPA and Eide Bailly partner.
Stavenger shared his findings with the board over a Zoom call.
“Specific to the audit, it’s very compliance and control heavy, so we’re just making sure that you’re spending the money the way the federal awards intend to be spent, and do you have proper controls?” he said.
The audit looked at three categories: financial statements, federal awards and legal compliance.
The audit found one repeat issue within all three areas, a lack of segregation of duties.
Segregation of duties is an internal control meant to minimize any issues such as fraud or errors by spreading out duties and responsibilities among several employees.
“So within all three of these areas, just one finding is a repeat find of a lack of segregation of duties. Very, very common in smaller entities and you just don’t have enough staff in your business office to adequately spread across all different transactions, all different areas of proper segregation of duties,” Stavenger said.
With that finding, Stavenger emphasized that the school district does the best it can with the resources it has, but the audit does have to note it.
Outside of that single finding, Stavenger said there were no other issues discovered.
“No finding in regards to federal awards, which is very, very good. And legal compliance, which is a wide variety of things that we look at based on what the state auditor and department of education say – bidding, conflicts of interest, if you’re issuing debt, are you following all the rules, and there’s several other items – no findings there,” he said.
The presentation also showed how much cash the district has had on hand since 2013. Cash on hand comes from several funds, including the general, food service, debt service and community service funds. Cash on hand totals is as follows:
- 2013: $4.69 million
- 2014: $4.81 million
- 2015: $4.16 million
- 2016: $3.59 million
- 2017: $3.82 million
- 2018: $4.47 million
- 2019: $4.77 million
- 2020: $4.83 million
- 2021: $5.38 million
- 2022: $4.25 million
“We see there was a decrease from 2021 mainly due to some budgeted deficit spending in the general fund …” Stavenger said.
Stavenger also reviewed the district's budget for fiscal year 2022.
For 2022 the district budgeted $14.68 million in revenue and received an actual revenue of $14.88 million. The district received $201,849 more in revenue than budgeted.
“If you’re within 5% on the revenues we’re going to be very satisfied with that. You can see you’re within 1.4%, a very, very good job with that … You had more state aid than anticipated,” Stavenger said.
The increase in state aid is due to increased student enrollment for fiscal year 2022 compared to 2021.
In terms of expenditures in fiscal year 2022, the district was 2.1% over what was budgeted.
The district anticipated $14.92 million in expenditures, and actual expenditures totaled $15.23 million, a difference of $312,475 more in expenditures than anticipated.
“We generally like to see you within 3%, you were within 2.1%, a little over-budget, but really, from an overall standpoint … came in very, very well,” Stavenger said.
Stavenger attributed the overage to supplies and materials costs, as well as the purchase of services.
“But again, nothing significant from our standpoint. A very, very good job,” he said.
The general fund started the fiscal year with $3.5 million and decreased by $422,237 to $3.08 million by year’s end.
Ten-year fund balances were also given for the community service fund and the food service fund.
The community service fund was in the red from 2013-2017. In 2018, the fund balance became positive. The balance has remained fairly consistent since 2018, with a peak in 2021 of just over $200,000 in funds. At the end of 2022, the fund had a balance of just over $150,000.
The food service fund balance was just over $350,000 at the end of fiscal year 2022.
The school board unanimously approved the audit after the presentation.