Finding No. 1:  Bank Reconciliations

Improvements were needed in the District’s preparation of bank reconciliations.   Several monthly bank reconciliations for two of the District’s bank accounts were not timely prepared, and some lacked evidence of supervisory review.  Additionally, various errors, unsupported reconciling items, and stale items were noted on the June 30, 2004, bank reconciliations.

Finding No. 2:  Unreconciled and Unsupported Account Balances

The District did not perform reconciliations to supporting detail for various accounts, including Due From Other Agencies, Deferred Revenue, and various payroll liability accounts.  Additionally, some donated foods inventory was not properly valued.

Finding No. 3:  Capital Outlay and Capital Asset Accounting

The estimated useful lives of assets used in the District’s composite depreciation calculation were not based upon historical actual useful lives of assets.  In addition, the District lacks detailed subsidiary records for its land, buildings, and non-building improvement accounts, and the District did not record a significant non-cash transaction consisting of two parcels of land donated to the District.

Federal Awards Finding No. 1:  Allowable Cost/Cost Principles (Documentation of Employee Time and Effort)

Periodic certifications and personnel activity reports supporting the salaries charged to the Reading First-State Grants funds were not completed during the 2003-04 fiscal year. 

Federal Awards Finding No. 2:  Davis-Bacon Act/Procurement/Suspension and Debarment

For a technology wiring project paid with School Renovation Grant funds, the District did not document that prevailing wages were paid by a contractor and subcontractor.  The District also did not obtain written certification that the contractor was not suspended or debarred from receiving Federal funds and did not retain documentation that the District verified the contractor’s suspension and debarment status at the General Services Administration website.  In addition, the District did not demonstrate that payments were made in accordance with unit labor rates and materials purchase discounts specified in the bid documentation. 

Federal Awards Finding No. 3:

Cash Management

The District drew down cash advances from the Florida Department of Education (FDOE) in excess of amounts necessary to satisfy immediate cash needs for District grants funded through FDOE.

Summary of Report on Financial Statements

The Brevard County District School Board prepared its basic financial statements for the fiscal year ended June 30, 2004, in accordance with prescribed financial reporting standards. 

Summary of Report on Internal Control and Compliance

The District has established and implemented procedures that generally provide for internal control of District operations.  The District generally complied with significant provisions of laws, administrative rules, regulations, contracts, and grant agreements.  However, we did note internal control and compliance findings that are summarized in the Summary of Audit Findings.

Summary of Report on Federal Awards

We audited the District’s Federal awards for compliance with applicable Federal requirements.  The Title I Grants to Local Educational Agencies, School Renovation Grants, and Reading First State Grants programs were audited as major Federal programs.  The results of our audit indicated that the District materially complied with the requirements that were applicable to the major Federal programs tested, with the exception of the School Renovation Grants program.  In addition, we noted compliance and internal control findings that are summarized in the Summary of Audit Findings. 

Audit Scope and Objectives

The scope of this audit included an examination of the District’s basic financial statements and the Schedule of Expenditures of Federal Awards as of and for the fiscal year ended June 30, 2004.  We obtained an understanding of internal control and assessed control risk necessary to plan the audit of the basic financial statements and Federal awards.  We also examined various transactions to determine whether they were executed, both in manner and substance, in accordance with governing provisions of laws, administrative rules, regulations, contracts, and grant agreements.

Our audit objectives were to determine whether the Brevard County District School Board and its officers with administrative and stewardship responsibilities for District operations had:

• Presented the District’s basic financial statements in accordance with generally accepted accounting principles;

• Established and implemented internal control over financial reporting and compliance with requirements that could have a direct and material effect on the financial statements or on a major Federal program;

• Complied with the various provisions of law, administrative rules, regulations, contracts, and grant agreements that are material to the financial statements, and those applicable to the District’s major Federal programs; and

• Corrected, or are in the process of correcting, all deficiencies disclosed in prior reports.

Audit Methodology

The methodology used to develop the findings in this report included the examination of pertinent District records in connection with the application of procedures required by auditing standards generally accepted in the United States of America, applicable standards contained in Government Auditing Standards issued by the Comptroller General of the United States, and Office of Management and Budget Circular A-133.

The Superintendent's written response to the audit findings can be viewed in its entirety on the Auditor General's web site.