Summary

Summary of Report on Financial Statements

The Calhoun County District School Board prepared its basic financial statements for the fiscal year ended June 30, 2007, 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 below.

Finding No. 1:  Financial Reporting

Enhancements in procedures could be made for reporting certain account balances and transactions on the government-wide financial statements.

Finding No. 2:  Food Service Contract

Improvements could be made to the District’s procedures to monitor its contract with a food service management company. 

Finding No. 3:  Fingerprinting Requirements

The District did not timely obtain the required fingerprint or background check for 7 contractors and 11 newly hired employees. 

Finding No. 4:  Cellular Telephones

The District did not have formal policies and procedures regarding the use of cellular telephones and did not report to the Internal Revenue Service the taxable value of the cellular telephones as income.

Finding No. 5:  Information Technology – Security Controls

Improvements were needed in the District’s information technology security controls.  Specific details of these improvements are not disclosed in this report to avoid any possibility of compromising the District’s information systems data and resources.

Summary of Report on Federal Awards

We audited the District’s Federal awards for compliance with applicable Federal requirements.  The Title I and Special Education Cluster 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.  However, we did note compliance and internal control findings that are summarized below. 

Federal Awards Finding No. 1:  Allowable Costs/Cost Principles – Compensation of Personnel Services

Enhancements were needed in the District’s procedures for preparing documentation to support charges and distributions of salaries to the Title I and Special Education programs.

Federal Awards Finding No. 2:  Procurement

District procedures did not ensure that cost reimbursements to the food service management company were limited to the maximum allowable costs and that food purchase rebates were properly received pursuant to the contract provisions.

Audit Objectives and Scope

Our audit objectives were to determine whether the Calhoun 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 our report No. 2007‑068.

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, 2007.  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.