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HomeMy WebLinkAbout05-1266 BIG SPRING SCHOOL DISTRICT SUPPLEMENTARY AUDIT REPORT ON FEDERAL AWARD PROGRAMS YEAR ENDED JUNE 30, 2004 o~ /.).'-" C,v.f - Ie..v~ TABLE OF CONTENTS Page Number Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 1-2 Independent Auditors' Report on Compliance With Requirements Applicable to Each Major Program, Internal Control Over Compliance in Accordance With OMB Circular A-133 and the Schedule of Expenditures of Federal Awards 3-5 Schedule of Expenditures of Federal Awards 6-7 Schedule of Findings and Questioned Costs 8-9 Summary Schedule of Prior Audit Findings 10 GREENAWALT & COMPANY, P.e. CERTIFIED PUBLIC ACCOUNTANTS JA.'\lFS E. LYONS HO\X'P\lillR.GREENAWAL1 CREEDON R. HOfR>IAN JOHN H. KL1NGLER DEBORAH], KELLY 400 WEST MAIN STREET MECHANICSBURG, PENNSYLVANIA 17055 (717)166-4163 FAX (717) 766.2731 62 WEST POMFRET STREET CARLISLE,PA170l) (717) 24}.4S11 FAX (7l7) 25H.9.H2 /Z. i\. GREEN:\ W..\L T (J9:-6.198}) A ;'\. REIDINGER (RETIRED) C. EDWARD ROGERS, JR Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards Board of School Directors Big Spring School District Newville, Pennsylvania We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Big Spring School District as of and for the year ended June 30, 2004, which collectively comprise Big Spring School District's basic financial statements and have issued our report thereon dated October 20, 2004. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, Internal control over financial reporting In planning and performing our audit, we considered Big Spring School District's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions, We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. Compliance and other matters As part of obtaining reasonable assurance about whether Big Spring School District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts, However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards, ,1 - MEMBERS - AMERJCAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS ,. PENNSYL V ANl~ lNSTITUTE OF CERTIFIED PUBL[C ACCOUNTANTS Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards (Cont'd,) This report is intended solely for the information and use of the Board of School Directors, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties, ~q,WoJ:t V ~)AC. GREENAWALT & COMPANY, PC October 20,2004 Mechanicsburg. Pennsylvania ,2 - GREENAWALT & COMPANY, P.c. CERTIFlfD PUBLIC ACCOUNTANTS JAMES E. LYONS HOWARD R. GR.E.E'lAWAlT CREEDON R. HOFFMAN JOHN l-L KlINGLE.R DEBORAH J. KELLY 400 WEST MAIN STREET MECHANIGSBURG, PENNSYLVANIA 17055 {717\766.4763 FAX (717) 766.2731 6:2 WEST POMFRET STREET CARLISLE, FA 17013 (717)143-4822 FAX (717) 2~8-9372 R. t'\ GREENj\WALT It9)6..1983) A. i\. REIDINGER (RETIRED) C. EmVAHD ROGERS, JR Independent Auditors' Report on Compliance With Requirements Applicable to Each Major Program, Internal Control Over Compliance in Accordance With OMB Circuiar A-133 and the Schedule of Expenditures of Federal Awards Board of School Directors Big Spring School District Newville, Pennsylvania Compliance We have audited the compliance of Big Spring School District with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2004, Big Spring School District's major federal program is identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs, Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the District's management. Our responsibility is to express an opinion on Big Spring School District's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A- 133, Audits of States, Local Governments and Non-Profit Organizations, Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred, An audit includes examining, on a test basis, evidence about Big Spring School District's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances, We believe that our audit provides a reasonable basis for our opinion, Our audtt does not provide a legal determination on Big Spring School District's compliance with those requirements. In our opinion, Big Spring School District complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2004, - 3- MEMBERS - AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS.. PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Independent Auditors' Report on Ccmpliance With Requirements Applicable tc Each Major Program, Internal Control Over Compliance in Accordance With OMB Circular A-133 and the Schedule of Expenditures of Federal Awards (Cont'd,) Internal control over compliance The management of Big Spring School District is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered Big Spring School District's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. We noted certain matters involving the internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgment, could adversely affect Big Spring School District's ability to administer a major federal program in accordance with the applicable requirements of laws, regulations, contracts and grants. The reportable condition is described in the accompanying schedule of findings and questioned costs as item 2004-1. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts, and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration cf the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered tc be material weaknesses, However, we believe that the reportable condition described above is not a material weakness, Schedule of expenditures of federal awards We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Big Spring School District, as of and for the year ended June 30, 2004, and have issued our report thereon dated October 20, 2004, Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the Big Spring School District's basic financial statements, The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole, -4- Independent Auditors' Report on Compliance With Requirements Applicable to Each Major Program, Internal Control Over Compliance in Accordance With OMB Circular A-133 and the Schedule of Expenditures of Federal Awards (Conl'd.) This report is intended solely for the information and use of the Board of School Directors, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties, ~a.wo.1:t' -I ~~I P. Co GREENAWALT & COMPANY, P,C, October 20, 2004 Mechanicsburg, Pennsylvania - 5- Program or Total Received Award Amount For Year Accrued (Deferred) Revenue 7/1/2003 Revenue Recognized Expenditures Accrued (Deferred) Revenue 6/30/2004 N/A $ 171,192 $ $ 177,353 $ 177,353 $ 6,161 N/A 27,552 28,525 28,525 973 N/A 3,791 3,791 (1) N/A 554 554 N/A 54,593 54,593 54,593 $ 257,682 $ 4,345 $ 260,471 $ 260,471 $ 7,134 $ 433,264 $ 290,080 $ $ 397,519 $ 397,519 $ 107,439 428,147 171,259 119,200 52,059 52,059 63,460 12,557 8,371 11,866 11,866 3,495 157,361 136,379 152,503 152,503 16,124 154,131 71,928 64,763 17,440 17,440 10,275 10,323 10,323 10,323 10,323 10,835 4,334 4,330 4 4 56,411 (259) (2,729) 2,470 2,470 16,759 14,365 16,759 16,759 2,394 15,049 5,788 5,788 323,719 116,615 323,719 323,719 207,104 $ 829,183 $ 191,352 $ 984,662 $ 984,662 $ 346,831 $ 1,086,865 $ 195,697 $ 1,245,133 $ 1,245,133 $ 353,965 BIG SPRING SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Cont'd,) FOR THE YEAR ENDED JUNE 30, 2004 NOTE A - SIGNIFICANT ACCOUNTING POLICIES This schedule is a summary of the School District's federal awards programs presented on the accrual basis of accounting; that is revenues are recognized when the expenditures are incurred. NOTE B - DONATED COMMODITIES Nonmonetary assistance is reported in the schedule at market value (provided by USDA) of the commodities received, Calculation of 25% Rule Total expenditures per schedule $ 1,245,133 Less: State expenditures (28.525) Total Federal expenditures $ 1 216608 . Major program Special Education Cluster IDEA-B (26,61% of total) $ 323719 . Source codes: I - Indirect funding F - Federal share . S - State share Legends: (M) Major program . (1) Prior year accrued revenue $ 4,345 Adjustment to actual (554) Opening accrued revenue $ 3791 . -7 - t . . . . BIG SPRING SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2004 A. Summary of audit results 1. The auditors' report expresses an unqualified opinion on the financial statements of Big Spring School District. 2. There were no reportable conditions disclosed during the audit of the financial statements. 3, No instances of noncompliance which could be material to the financial statements of Big Spring School District were disclosed during the audit. 4, There was one reportable condition (2004-1) disclosed during the audit of the major federal award program. The reportable condition is not reported as a material weakness. 5, The auditors' report on compliance for the major federal award programs for Big Spring School District expresses an unqualified opinion, 6. There was one audit finding (2004-1) relative to the major federal award program for Big Spring School District. 7. The program tested as a major program included: Special Education Cluster IDEA-B, CFDA #84.027 8, The threshold for distinguishing Types A and B programs was $ 300,000, 9, Big Spring School District was determined to be a low-risk auditee, B, Findings - financial statement audit None -8- BIG SPRING SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Cont'd.) FOR THE YEAR ENDED JUNE 30, 2004 C, Findings and questioned costs - major federal award program audit 2004-1 Reportable Condition Special Education Cluster IDEA-B, CFDA #84,027 Criteria The District is required to report to the granting agency detail of the expenditures for the program based on the budget categories. Condition The District fully expended the grant award. However, two of the six budget category balances did not agree with the accounting reccrds. Effect The balance expended in employee benefits is understated by $ 11 ,429 and supplies are overstated by $ 11,429. Cause Lack of timely communication between all individuals involved, Recommendation We recommend that the report to the granting agency be revised, In addition, at the beginning of the grant we suggest all individuals involved meet and share program information. Meetings should be held periodically through the year on an as needed basis, - 9 - Questioned Costs None BIG SPRING SCHOOL DISTRICT SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2004 NONE - 10- BIG SPRING SCHOOL DISTRICT SUPPLEMENTARY AUDIT REPORT ON FEDERAL AWARD PROGRAMS YEAR ENDED JUNE 30, 2004 . . . . . . . . . TABLE OF CONTENTS Page Number Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards 1 -2 Independent Auditors' Report on Compliance With Requirements Applicable to Each Major Program, Internal Controi Over Compliance in Accordance With OMS Circular A-133 and the Schedule of Expenditures of Federal Awards 3-5 Schedule of Expenditures of Federal Awards 6-7 Schedule of Findings and Questioned Costs 8-9 Summary Schedule of Prior Audit Findings 10 GREENAWALT & COMPANY, P.C. CERTIFIED PUBLIC ACCOUNTANTS JA...'vlESE,LYONS HOW/A.RDR. GREl:NAWALT CREEDON R. HOFr"M.A,"i JOHN H. KU;--.IGLER DEBORAH j. KELLY 400 WEST MAIN STREET MECHANICSBURG, PENNSYLVANIA 17055 (1'17) 766.4763 FAX (717) 766.2731 62 WEST POMFRET STREET CARllSLE,PA 17013 (717)24:1-4821 FAX (717)253.9.172 R. 1\. GREEN;\ ~I ALT (19)6-1983) A ..\. REIDI0lGER (RETIRED) C EDWARD ROGERS,JR Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards Board of School Directors Big Spring School District Newville, Pennsylvania We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Big Spring School District as of and for the year ended June 30, 2004, which collectively comprise Big Spring School District's basic financial statements and have issued our report thereon dated October 20, 2004. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Internal control over financial reporting In planning and performing our audit, we considered Big Spring School District's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internai control over financial reporting. Our consideration of the internal control would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses, A material weakness is a reportable condition in which the design or operation of one or more of the internal controi components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions, We noted no matters involving the internal control over financial reporting and its operation that we consider to be material weaknesses. Compliance and other matters As part of obtaining reasonabie assurance about whether Big Spring School District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts, However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion, The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards, -1- MEMBERS - AMERlCAN INSTITUTE OF CERTIFIED PUBUC ACCOUNTANTS -- PENNSYL VANIA INSTITUTE OF CER'TIFIED PUBLIC ACCOUJ\.T"f ANTS Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance With Government Auditing Standards (Cont'd,) This report is intended solely for the information and use of the Board of School Directors, management and federal awarding agencies and pass,through entities and is not intended to be and should not be used by anyone other than these specified parties. ~fl0/o.U of ~)fJ.C. GREENAWALT & COMPANY, PC October 20, 2004 Mechanicsburg, Pennsylvania - 2- GREENAWALT & COMPANY, P.e. CERTIFIED PUBLIC ACCOUNTANTS J".....\1ES E LYONS HO\X'ARDKGREl:NA\x/AlT CREEDON R. HOFR.-li\N JOHN H KLINGLER DEBORAH J KELLY 400 WEST MAIN STREET MECHAN1CSBURG, PENNSYLVANIA 17055 (717) 766.4763 FAX (717} 766.2731 62 WEST POI,1FRET STREET CARLISLE, PA 17013 (717) 243-4821 FAX(7]7) 2~8-9:l72 R. n. GREEK!\ W'AL T (1956.1983) A. A. REIDINGER (RETIRED) C ED\,(! ARD ROGERS, JR Independent Auditors' Report on Ccmpliance With Requirements Appiicable to Each Major Program, Internal Control Over Compliance in Accordance With OMB Circular A-133 and the Schedule of Expenditures of Federal Awards Board of School Directors Big Spring School District Newville, Pennsylvania Compliance We have audited the compiiance of Big Spring School District with the types of compliance requirements described in the U,S, Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2004, Big Spring School District's major federal program is identified in the summary of auditors' results section of the accompanying schedule of findings and questioned costs. Compiiance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the District's management. Our responsibility is to express an opinion on Big Spring School District's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred, An audit includes examining, on a test basis, evidence about Big Spring School District's compiiance with those requirements and performing such other procedures as we considered necessary in the circumstances, We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on Big Spring School District's compliance with those requirements. In our opinion, Big Spring School District complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2004. - 3- MEMBERS - AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS -- PENNSYL V ANLA INSTITUTE OF CERTIFIED PUBLIC ACCOUNT ANTS Independent Auditors' Report on Compliance With Requirements Applicable to Each Major Program, Internal Control Over Compliance in Accordance With OMB Circular A-133 and the Schedule of Expenditures of Federal Awards (Cont'd.) Internal control over compliance The management of Big Spring School District is responsible for establishing and maintaining effective internal contrcl over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs, In planning and performing our audit, we considered Big Spring School District's internal contrcl over compliance with requirements that cculd have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133, We noted certain matters involving the internal control over compliance and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgment, could adversely affect Big Spring School District's ability to administer a major federai program in accordance with the applicable requirements of laws, regulations, contracts and grants, The reportable condition is described in the accompanying schedule of findings and questioned costs as item 2004-1, A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that nonccmpliance with applicable requirements of laws, regulations, contracts, and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that the reportable condition described above is not a material weakness. Schedule of expenditures of federal awards We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Big Spring School District, as of and for the year ended June 30, 2004, and have issued our report thereon dated October 20, 2004. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the Big Spring School District's basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements, Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whoie. -4- Independent Auditors' Report on Compliance With Requirements Applicabie to Each Major Program, Internal Control Over Compliance in Accordance With OMS Circular A-133 and the Schedule of Expenditures of Federal Awards (Cont'd.) This report is intended solely for the information and use of the Soard of School Directors, management and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties, ~~ +~~I Pc. GREENAWALT & COMPANY, P,C, October 20, 2004 Mechanicsburg, Pennsylvania -5- Pro9ram or Total Received Award Amount For Year Accrued (Deferred) Revenue 7/1/2003 Revenue Reco9nized Expenditures Accrued (Deferred) Revenue 6/30/2004 N/A $ 171,192 $ $ 177,353 $ 177,353 $ 6,161 N/A 27,552 28,525 28,525 973 N/A 3,791 3,791 (1) N/A 554 554 N/A 54,593 54,593 54,593 $ 257,682 $ 4,345 $ 260,471 $ 260,471 $ 7,134 $ 433,264 $ 290,080 $ $ 397,519 $ 397,519 $ 107,439 428,147 171,259 119,200 52,059 52,059 63,460 12,557 8,371 11,866 11,866 3,495 157,361 136,379 152,503 152,503 16,124 154,131 71,928 64,763 17,440 17,440 10,275 10,323 10,323 10,323 10,323 10,835 4,334 4,330 4 4 56,411 (259) (2,729) 2,470 2,470 16,759 14,365 16,759 16,759 2,394 15,049 5,788 5,788 323,719 116,615 323,719 323,719 207,104 $ 829,183 $ 191,352 $ 984,662 $ 984,662 $ 346,831 $ 1,086,865 $ 195,697 $ 1,245,133 $ 1,245,133 $ 353,965 BIG SPRING SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Cont'd,) FOR THE YEAR ENDED JUNE 30, 2004 NOTE A - SIGNIFICANT ACCOUNTING POLICIES This schedule is a summary of the School District's federal awards programs presented on the accrual basis of accounting; that is revenues are recognized when the expenditures are incurred, NOTE B - DONATED COMMODITIES Nonmonetary assistance is reported in the schedule at market value (provided by USDA) of the commodities received. Calculation of 25% Rule Total expenditures per schedule Less: State expenditures $ 1,245,133 (28,525) Total Federal expenditures $ 1.216608 Major program Special Education Cluster IDEA-B (26.61% of total) $ 323.719 Source codes: I - Indirect funding F - Federal share S - State share Legends: (M) Major program (1) Prior year accrued revenue Adjustment to actual $ 4,345 (554) Opening accrued revenue $ 3791 -7 - BIG SPRING SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2004 A, Summary of audit results 1. The auditors' report expresses an unqualified opinion on the financiai statements of Big Spring School District 2, There were no reportable conditions disclosed during the audit of the financial statements. 3, No instances of noncompliance which could be material to the financial statements of Big Spring School District were disciosed during the audit 4, There was one reportable condition (2004-1) disclosed during the audit of the major federal award program. The reportable condition is not reported as a material weakness. 5, The auditors' report on compliance for the major federal award programs for Big Spring School District expresses an unqualified opinion, 6. There was one audit finding (2004-1) reiative to the major federal award program for Big Spring School District. 7, The program tested as a major program included: Special Education Cluster IDEA-B, CFDA#84.027 8. The threshold for distinguishing Types A and B programs was $ 300,000. 9. Big Spring School District was determined to be a low-risk auditee. B. Findings - financial statement audit None - 8- BIG SPRING SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Cont'd,) FOR THE YEAR ENDED JUNE 30, 2004 Questioned Costs C, Findings and questioned costs - major federal award program audit 2004-1 Reportable Condition Special Education Cluster IDEA-B, CFDA #84.027 Criteria The District is required to report to the granting agency detail of the expenditures for the program based on the budget categories, Condition The District fully expended the grant award, However, two of the six budget category balances did not agree with the accounting records, Effect The balance expended in employee benefits is understated by $ 11,429 and supplies are overstated by $ 11,429. None Cause Lack of timely communication between all individuais involved, Recommendation We recommend that the report to the granting agency be revised, In addition, at the beginning of the grant we suggest all individuals involved meet and share program information. Meetings should be heid periodically through the year on an as needed basis. - 9- . BIG SPRING SCHOOL DISTRICT SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE YEAR ENDED JUNE 30, 2004 . NONE . . . . . . . -10 - . AUDITOR'S REPORT BIG SPRING SCHOOL DISTRICT FOR THE SCHOOL YEAR ENDED JUNE 30, 2004 The complete report of the audit of the School District's accounts is on file in the administrative office of the District. The auditors have completed their audit of the District's funds for the school year ended June 30, 2004 and in accordance with the provisions of Act 237 of December 1980 give notice that said report was filed in the office of the Prothonotary of the Court of Common Pleas of Cumberland County and that said report will be confirmed absolutely unless an appeal is taken therefrom within thirty days after filing thereof. " ~ GREENAWALT & COMPANY, P.c. CERTIFIED PUBLIC ACCOUNTANTS JAJl.1ES L LYONS H()\Y/ARDR GREL~A\XIAL.l' CREEDON R. HOFHtAN JOHN H. KLINGLER DEBORAH J. RELL Y 400 WEST MAIN. STREET MECHANICSBURG, PENNSYLYANIA 17055 (717)768.4763 FAX (717) 766-2731 (,2 WEST POJ'....lFRET STREET CARLlSLE,P,,\ (lel) (717)243.4822 FAX (717) ~~R-Sl372 1\ i\. GREENAWALT(19'>6-1983) A. .\. RElDIKGER (RETIRED) C. EDWARD ROGERS, JR October 20, 2004 Board of School Directors Big Spring Schcol District Newville, Pennsylvania We have audited the financial statements of Big Spring School District for the year ended June 30, 2004, and have issued our report thereon dated October 20, 2004, Professional standards require that we provide you with the follcwing information related to our audit. Our ResDonsibilitv under U.S. Generallv AcceDted Auditina Standards and OMB Circular A-133 As stated in our engagement letter dated May 6, 2004, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, assurance about whether the financial statements are free of material misstatement. Because an audit is designed to provide reasonable, but not absolute, assurance and because we did not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us. In planning and performing our audit. we considered Big Spring School District's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting, We also considered internal control over cornpliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A.133, As part of obtaining reasonable assurance about whether Big Spring School District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts, However, providing an opinion on compliance with those provisions was not an objective of our audit. Also, in accordance with OMS Circular A.133, we examined, on a test basis, evidence about Big Spring School District's compliance with the types of compliance requirements described in the US, Office of Management and Budget (OMB) Circular A.133 Compliance Supplement applicable to each of its major federal programs for the purpose of expressing an opinion on Big Spring School District's compliance with those requirements, While our audit provides a reasonable basis for our opinion, it does not provide a legal determination on Big Spring School District's compliance with those requirements, MEMBERS - AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNT ANTS -- PENNSYLVANIA. INSTITUTE OF CER'rIFIED PUBLIC ACCOUNTANTS . , Board of School Directors October 20, 2004 Page two SiQnificant AccountinQ Policies Management has the responsibility for selection and use of appropriate accounting policies, In accordance with the terms of our engagement letter, we will advise management about the appropriateness of accounting policies and their application, The significant accounting policies used by the District are described in the notes to financial statements, No new accounting policies were adopted and no existing policies were changed during the year. We noted no transactions entered into by the District during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authoritative gUidance or consensus, AccountinQ Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience abcut past and current events and assumptions about future events, Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected, The two most sensitive estimates affecting the financial statements were the adequacy of the District's balance with South Central Trust, and the estimate of taxes receivable. Management's estimate of the adequacy of the District's balance is based on various factors used by South Central Trust. We evaluated the key factors and assumptions used to develop the adequacy of the District's balance in determining that it is reasonable in relation to the financial statements taken as a whole. Management's estimate of the future collectibility of taxes receivable is primarily based on past experience and other historical data, We evaluated the key factors and assumptions used to develop the receivable in determining that it is reasonable in relation to the financial statements taken as a whole. Audit Adiustments For purposes of this letter, professional standards define an audit adjustment as a proposed correction of the financial statements that, in our judgment, may not have been detected except through our auditing procedures. An audit adjustment mayor may not indicate matters that could have a significant effect on the District's financial reporting process (that is, cause future financial statements to be materially misstated). In our judgment, none of the adjustments we proposed, whether recorded or unrecorded by the District, either individually or in the aggregate, indicate matters that could have a significant effect on the District's financial reporting process, DisaQreements with ManaQement For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, cr auditing matter that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. . Board of School Directors October 20, 2004 Page three Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations, If a consultation involves application of an accounting principle to the governmental unit's financiai statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the reievant facts. To our knowledge, there were no such consultations with other accountants. Issues Discussed Prior to Retention of Independent Auditors We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the District's auditors, However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention, Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing our audit. This information is intended soleiy for the use of the Board of School Directors and management of Big Spring School District and is not intended to be and should not be used by anyone other than these specified parties /~'~ /2 r::- ~~ eR.I?"Il4l<.owff/' " r.r;f GREENAWALT; COMPANY, . ,C. ~ P iJ -p ~ Q *- w \)--cJ - -::J. \\~ I> 'V \ " 2l c0 f-" _ \Y ......a ~ t._ -Si ((J c- \) ~ ~ "t (' 1- C) .'\1. :,;,',) - , <:::J ~"- .. r' '-' ~ --