Summary

Summary of Report on Financial Statements

Our audit disclosed that the District’s basic financial statements were fairly presented, in all material respects, in accordance with prescribed financial reporting standards.

Summary of Report on Internal Control and Compliance

We noted a certain matter involving the District’s internal control over financial reporting and its operation that we consider to be a material weakness, and others we consider to be significant deficiencies, as summarized below.

The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards; however, we noted certain additional matters as summarized below.

MATERIAL WEAKNESS

Finding No. 1:          Improvements are needed in internal controls over the investment program to strengthen accountability.

SIGNIFICANT DEFICIENCIES

Finding No. 2:          Improvements are needed in District procedures to ensure that certain accounts and transactions are properly reported on the financial statements.

Finding No. 3:          The District’s monthly bank reconciliations were inadequate to ensure that the cash and investment assets agreed with the accounting records. 

ADDITIONAL MATTERS

Finding No. 4:          Procedural improvements are needed in controls over maintenance, warehouse and transportation inventories by adequately separating asset custody and record keeping responsibilities, and limiting access to inventory storage areas.

Finding No. 5:          The District could enhance its controls over vouchering by adequately separating incompatible duties.

Finding No. 6:          Improvements are needed in the District’s procedures to reconcile detailed supporting records to the general ledger for certain health plan general ledger accounts.

Finding No. 7:          The District’s accounting procedures for capital outlay and capital asset transactions could be improved.

Finding No. 8:          Procedural enhancements are needed in internal controls to strengthen accountability for a la carte food sales.

Finding No. 9:          The District incurred costs of $1,819,909, from its capital outlay millage funds that were not, of record, allowable under the provisions of Section 1011.71(2), Florida Statutes.

Finding No. 10:       Enhancements could be made in the administration of guaranteed maximum price construction contracts.

Finding No. 11:       The District transferred student fees, totaling $6,157,936, from the workforce development program to an unrestricted account in the General Fund, contrary to guidance from Florida Department of Education.

Finding No. 12:       The District has not returned $3,033,923 to the workforce development program for reimbursement of indirect costs generated during the 2004-05 fiscal year which were incorrectly transferred to an unrestricted account in the General Fund.

Finding No. 13:       The District did not always provide written statements to individuals stating the purposes for the collection of social security numbers, contrary to Section 119.071(5)(a), Florida Statutes.

Finding No. 14:       The District did not have adequate procedures for timely obtaining fingerprints and background screenings for instructional and noninstructional staff that have direct contact with students.

Finding No. 15:       The District had not developed and implemented policies and procedures requiring employees to document the business use of cellular telephones. 

Finding No. 16:       Improvements are needed in the monitoring procedures of charter schools to ensure the adequacy of required insurance coverage.

Finding No. 17:       Enhancements could be made to ensure the adequacy of insurance coverage for work performed by architects. 

Finding No. 18:       The District had not implemented procedures for review by management of user access accounts. 

Finding No. 19:        Improvements are needed in the District’s information technology (IT) security controls.

Finding No. 20:        The District’s IT program change controls needed improvement.

Finding No. 21:         District staff did not remove the IT access privileges of certain former employees in a timely manner.

Finding No. 22:      The District’s security awareness training needed improvement.

Finding No. 23:      Improvements were needed in testing the District’s disaster recovery plan.

Summary of Report on Federal Awards

We audited the District’s Federal awards for compliance with applicable Federal requirements.  The Child Nutrition Cluster and Title I 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:            The District used Title I program funds to reduce (supplant) the amount of other moneys used to operate the program, contrary to Federal regulations.

Federal Awards Finding No. 2:            District records disclosed that 19 hourly teachers, who provided services to eligible private school students, did not meet the requirements to be highly qualified, contrary to Federal regulations.

Audit Objectives and Scope

Our audit objectives were to determine whether the Pinellas 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 internal controls that promote and encourage:  1) compliance with applicable laws, rules, regulations, contracts, and grant agreements; 2) the economic 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 laws, rules, regulations, contracts, and grant agreements that are material to the financial statements, and those applicable to the District’s major Federal programs; and

• Taken corrective actions for findings included 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, 2008.  We obtained an understanding of the District’s environment, including its internal control, and assessed the risk of material misstatement 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, 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.  

Management's response is included in the report as Exhibit - N.