Summary

Summary of Report on Financial Statements

The Miami-Dade 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:         Monitoring of the Purchased Food Cost per Meal

There was a broad range in the purchased food cost per meal among schools within each educational level which may be indicative of unauthorized or inefficient usage of food supplies.

Finding No. 2:        Purchased Food Inventory Turnover Rates and Related Reconciliations

A wide range of purchased food inventory turnover rates was noted within each educational level suggesting that the efficiency of the inventory controls at the food preparation locations is not consistent throughout the District.  Enhancements were also needed in the District’s inventory reconciliation process.

Finding No. 3:        Food Production and Menu Record

Our review of Production and Menu Record forms from ten school cafeterias disclosed instances in which the Department’s procedures were not followed.

Finding No. 4:        Overtime Payments

During the 2006-07 fiscal year, overtime expenditures in the District’s General Fund totaled approximately $27.8 million and 789 employees were paid $10,000 or more for overtime hours worked.  District records did not evidence that management justified and balanced the negative effect of extensive overtime against the immediate needs of the District’s operations.

Finding No. 5:        Overtime Payments - Monitoring Procedures

The District did not evaluate the reasonableness of staffing and personnel utilization based on reports of overtime worked and paid in the individual departments.  Office of Management and Compliance Audits personnel performed limited reviews of overtime reports which consisted primarily of inquiries of management regarding the reasonableness of unusual overtime activity; however, there was no documentation to evidence these reviews or the resolution of questionable overtime payments.

Finding No. 6:        Fingerprinting Requirements

The District should improve its procedures for timely obtaining the required fingerprinting and background checks of noninstructional staff that have direct contact with students.

Finding No. 7:        Annual Facility Inspections

We noted 323 deficiencies or facility maintenance needs for four school facilities that remained unresolved for two or more years after facility inspections were performed.

Finding No. 8:        Architect Errors and Omissions

Architectural and engineering contracts entered into by the District in the 2006 calendar year contained provisions precluding the District from recovering, from the architect/engineer and their liability insurance carriers, specified portions of the additional construction costs resulting from architectural or engineering errors and omissions.  

Finding No. 9:        Project Closeout

Improvements were needed in the District’s contract and project closeout procedures.

Finding No. 10:      Facilities Work Program

Information reported in the District’s facilities work program was inconsistent with the District’s annual capital outlay budget and did not always include the required information.

Finding No. 11:        Guaranteed Maximum Price (GMP) Contract Allowances

The terms and conditions for the use and disposition of GMP contract allowances were not provided for in the District’s Construction Manager At-Risk contracts.  Written procedures were not in place to provide for the proper management of GMP contract allowances.

Finding No. 12:       Ad Valorem Taxation

District records disclosed instances in which capital outlay millage proceeds, totaling $18,631,575, were not spent for authorized purposes.

Finding No. 13:        Workforce Development Education Program – Match of Student Records to Death Files

We noted 13 students who had registered for adult or vocational education courses using social security numbers belonging to individuals shown as deceased in the death records of the Bureau of Vital Statistics. 

Finding No. 14:        Monitoring Fuel Efficiency of Vehicles

Instances were noted in which fuel consumption reports for May 2007 and June 2007 contained errors or exceptions related to vehicle odometer readings and calculated miles per gallon.  There was little or no documentation to evidence that these errors or exceptions noted on the fuel reports were ever resolved or corrected by management. 

Finding No. 15:       Cellular Telephones

Improvements were needed in the District’s monitoring of cellular telephone (cell phone) usage.  As such, the District was required to, but did not, report to the Internal Revenue Service the value of cell phone services as income for employees.

Finding No. 16:      Monitoring of Charter Schools

Our review of insurance certificates for 15 charter schools disclosed several instances in which the insurance coverage maintained by the charter schools did not comply with the requirements of the charter school agreements.

Summary of Report on Federal Awards

We audited the District’s Federal awards for compliance with applicable Federal requirements.  The Adult Education – State Grant Program, Title I, Vocational Education – Basic Grants to States, Magnet Schools Assistance, Fund for the Improvement of Education, and Refugee and Entrant Assistance  - Discretionary 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.  However, we did note internal control and compliance findings that are summarized below.

Federal Awards Finding No. 1:  Allowable Costs/Cost Principles - Vendor Payments

The District did not maintain adequate documentation to support payments, totaling $175,855, from Federal Adult Education program proceeds.

Federal Awards Finding No. 2:  Procurement – Contract Administration

Improvements were needed in the District’s contract administration procedures to include certain required provisions in purchase order contracts funded with Federal moneys.

Federal Awards Finding No. 3:  Activities Allowed or Unallowed

The District paid $106,813.90 to an employee as a Federal program project director; however, District records did not evidence that the required United States Department of Education approval was obtained for the employee to perform this function.

Federal Awards Finding No. 4:  Matching, Level of Effort, Earmarking

Enhancements could be made in District procedures to ensure that certain grant performance requirements are met.

Federal Awards Finding No. 5:  Program Administration

Inventory recordkeeping deficiencies and lack of monitoring procedures over meal costs were noted which impact the administration of the Federally-funded food service program. 

Audit Objectives and Scope

Our audit objectives were to determine whether the Miami-Dade 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 prior 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.