Summary

Summary of Report on Financial Statements

The Orange 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:  QZAB Bond

Proceeds and interest earnings from the 2002 QZAB Bonds were not expended in a timely manner. 

Finding No. 2:  Professional Services

The District did not advertise separately for construction management services to construct four new high school projects, contrary to Section 287.055, Florida Statutes.

Finding No. 3:  Construction Documents

Improvements could be made in District monitoring procedures over construction projects and related documents.

Finding No. 4:  Acquisitions of Schools

The District did not adequately document that it had proper authority to purchase schools built by a developer.

Finding No. 5:  Independent Reviews of Construction Projects

Reviews of construction manager billings and final payments by an independent CPA firm were not obtained in a timely manner, hindering the District’s ability to implement timely corrective action.

Finding No. 6:  Subcontractor Invoices

Pre-audit procedures could be enhanced for construction-related expenditures to ensure that construction manager payment applications are properly supported by subcontractor invoices.

Finding No. 7:  Program Manager Contract

The District did not initially provide documentation to evidence the reasonableness of costs paid to an independent contractor for program management services.  Subsequent efforts by the District resulted in changes to the costs paid for the service.

Finding No. 8:  Annual Facility Safety Inspections

Many instances were noted in which previously cited firesafety deficiencies remained uncorrected.

Finding No. 9:  School Advisory Councils

Seven of the ten school advisory council memberships reviewed included one to three additional administrative employees, contrary to Section 1001.452, Florida Statutes.

Finding No. 10:  School Internal Funds

The independent audit of the District’s school internal funds noted that many findings had been repeated from previous years, indicating that follow-up on audit findings and recommendations was insufficient.

Finding No. 11:  Monitoring of Charter Schools

The District could make improvements in monitoring its charter schools to ensure that the schools maintain the required insurance coverage and that floor plans are submitted to area law enforcement agencies and fire departments.

Finding No. 12:  Fee Collections

The District did not perform independent fee audits for adult and community educational course fee collections.

Finding No. 13:  Time Records

Improvements could be made in payroll processing procedures to properly document and approve employee attendance.

Finding No. 14:  Insurance Premiums

The Board approved the Board attorney’s health insurance without documenting the educational purpose served by this approval.

Finding No. 15:  Fingerprinting and Background Checks

The required fingerprint and background screening check was not performed for six of ten contracted employees tested. 

Finding No. 16:  Cellular Communication Devices

The District had not obtained Board approval of policies and procedures governing the use of cellular communication devices and had not implemented procedures established for the monitoring of cellular device usage.

Summary of Report on Federal Awards

We audited the District’s Federal awards for compliance with applicable Federal requirements.  The Food Donation, Child Nutrition Cluster, Fund for the Improvement of Education, 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 Fund for the Improvement of Education program.  Internal control and compliance findings are summarized below. 

Federal Awards Finding No. 1:  Reporting – Reimbursement

The District’s School Breakfast and National School Lunch Program reimbursement claims were overstated by approximately $27,460 due to the improper classification of some schools as severe need. 

Federal Awards Finding No. 2:  Special Tests and Provisions – Competitive Food Sales

Contrary to Federal regulations and State rules, competitive foods were sold to students outside the authorized times.

Federal Awards Finding No. 3:  Matching

Documentation was not available to support $244,618 of $448,051 reviewed as claimed for matching funds, subjecting a total of $474,849 in program expenditures to disallowance by the grantor.

Federal Awards Finding No. 4:  Special Tests and Provisions – Verifications

Contrary to Federal regulations, records indicate that the District did not limit its verification sample of free and reduced-price meal applications to error-prone applications.

Audit Objectives and Scope

Our audit objectives were to determine whether the Orange 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 prior 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.