Summary

Summary of Report on Financial Statements

The St. Lucie County District School Board prepared its basic financial statements for the fiscal year ended June 30, 2006, in accordance with prescribed financial reporting standards.  Club and class activity funds of the individual schools were not included within the scope of our audit.

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 below.

Summary of Audit Findings

Finding No. 1:  Electronic Funds Transfer

Improvements were needed in controls over electronic transfer of funds to restrict the accounts to which funds may be transferred and to authorize specific individuals to change destination accounts.  Additionally, there was not always supervisory review of the electronic funds transfer transactions.

Finding No. 2:  Journal Entry Posting and Approval

The District did not always post journal entries to its accounting system in a timely manner.  Additionally, journal entries did not always evidence supervisory approval.

Finding No. 3:  Tangible Personal Property – Reconciliation with Control Accounts

The District did not reconcile the subsidiary tangible personal property records to the control accounts.  Additionally, property deletions were not accurately presented to the Board for approval resulting in differences between the property records and amounts reported on the financial statements.

Finding No. 4:  Bid Support

Improvements were needed by the District when using bids from other school districts.  We noted two instances in which the original bids of other school districts were on file to verify the discount‑off‑catalog price; however, the District did not obtain and retain documentation of the vendor’s catalog price of items at the time of the original bid.  Consequently, District records did not evidence that the correct prices were paid for the purchases tested.

Finding No. 5:  Claims Testing

Improvements were needed in internal control procedures over the District’s self-insured health plan.  The District does not perform a periodic review, on at least a sample basis, of the supporting documents for claims payments.  Periodic reviews of the underlying support for claims payments by District personnel would help ensure that payments made by the District’s third-party administrator are for valid health claims of the District.

Finding No. 6:  Fingerprinting and Background Checks

Although the District implemented procedures to perform fingerprinting and background screenings of contractors, our testing disclosed that improvements were needed in implementing the law.  Our testing of 15 special education contractual personnel who had direct access to students disclosed one individual had not been fingerprinted, nor had a background screening been performed, and two instances where evidence of background screenings had not been retained in the District’s files and could not be located for our review.

Finding No. 7:  Performance-Pay Plan

The District’s performance-pay plan contained provisions which appear to limit employee participation, contrary to Florida Statutes.

Finding No. 8: Annual Facility Safety Inspections

The District did not, in some instances, correct safety and maintenance deficiencies disclosed by annual facility inspections in a timely manner.  Our review of annual facility inspection reports for five facilities found instances in which previously cited maintenance and safety deficiencies remained unresolved for extended time periods.

Finding No. 9:  Preparation of Board Meeting Minutes

Minutes of the Board’s meetings were not timely made available for public inspection.  In these circumstances, the public’s access to information on Board actions may be limited.

Summary of Report on Federal Awards

We audited the District’s Federal awards for compliance with applicable Federal requirements.  The Special Education Cluster, Improving Teacher Quality State Grants, and Disaster 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. 

Audit Objectives and Scope

Our audit objectives were to determine whether the St. Lucie 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;

• Established management controls that promote and encourage; 1) compliance with applicable laws, administrative rules, and other guidelines; 2) the economic, effective, and efficient operation of the District; 3) the reliability of records and reports; and 4) the safeguarding of District assets;

• Complied with the various provisions of law, administrative rules, regulations, and 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 the audit reports for the 2003-04 and 2004-05 fiscal years prepared by other auditors and in our report No. 2004‑162.

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, 2006.  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.

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 response to the audit findings and recommendations is included in the full report.