Summary

Summary of Report on Financial Statements

The Manatee 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

Improvements could be made in District procedures to ensure that certain account balances are properly reported at fiscal year-end.

Finding No. 2:  Debt Administration

The District did not calculate and report an arbitrage rebate liability on its financial statements.

Finding No. 3:  Cellular Telephones

District procedures did not provide for the value of cellular telephone (cell phone) services, provided to each employee assigned a cell phone, to be reported to the Internal Revenue Service, contrary to Federal requirements.

Finding No. 4:  Fingerprinting Requirements

Contractual personnel, such as construction personnel, subcontractors, and day laborers hired by subcontractors, were permitted access on school grounds when students were present without undergoing the required background screenings.

Finding No. 5:  Monitoring Charter Schools

The District did not timely obtain evidence of the required insurance coverage for the charter schools sponsored by the District. 

Finding No. 6:  Architect and Engineer Professional Liability Insurance

The District did not evidence the basis upon which it determined the sufficiency of architect and engineer professional liability insurance, potentially resulting in coverage which may not be adequate based on the anticipated project costs.   

Finding No. 7:  Timely Deletion of Computer Access Privileges

Controls, related to the immediate removal of access privileges for terminated employees, needed improvement.

Finding No. 8:  Group Health Self-Insurance Plan – Annual Report

As of December 5, 2007, or 249 days after the required filing date, the District had not submitted its group health self-insurance annual report for the plan year ending 2006, contrary to Section 112.08(2)(b), Florida Statutes.

Finding No. 9:  Cash Management

Cash draws were not sufficient to meet Federal program expenditure needs during the 2006-07 fiscal year, with monthly cash deficits ranging from approximately $102,600 to $8,283,650, necessitating the use of other District funds to temporarily pay Federal program costs.

Summary of Report on Federal Awards

We audited the District’s Federal awards for compliance with applicable Federal requirements.  The Child Nutrition, Special Education, Improving Teacher Quality, and Student Financial Assistance 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 internal control and compliance findings that are summarized below. 

Federal Awards Finding No. 1:  Allowable Costs/Cost Principles – Services to Charter Schools

The District did not properly provide funding, totaling $12,289, for Special Education program services to two charter schools, resulting in questioned costs.

Federal Awards Finding No. 2:  Allowable Costs/Cost Principles – Salary and Benefit Charges

Procedural improvements could be made to ensure that salary and benefit charges to the Special Education program are correct.    

Federal Awards Finding No. 3:  Special Tests and Provisions

The District could enhance its procedures to ensure that Federal Student Financial Assistance funds are properly disbursed in accordance with Federal requirements.

Federal Awards Finding No. 4:  Allowable Costs/Cost Principles - Workers’ Compensation Cost Allocation

Workers’ compensation insurance costs were not allocated in a consistent manner to both Federal and non-Federal activities, resulting in questioned costs totaling $239,664.

Federal Awards Finding No. 5:  Procurement – Contract Administration

The District entered into two contracts, totaling approximately $53,000, that excluded the Federally required language, contrary to Title 34, Section 80.36(i), Code of Federal Regulations.

Federal Awards Finding No. 6:  Suspension and Debarment

The District entered into two contracts with one vendor for goods and services for $26,325.00 and $26,617.50, using Special Education program moneys, without verifying that the vendor was not suspended or debarred from receiving Federal funds.

Audit Objectives and Scope

Our audit objectives were to determine whether the Manatee 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 previous audit reports.

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.