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HomeMy WebLinkAbout06-0276 . v&; ;)7& ilt;J.::k~ . . BIG SPRING SCHOOL DISTRICT . SUPPLEMENTARY AUDIT REPORT ON FEDERAL AWARD PROGRAMS YEAR ENDED JUNE 30, 2005 . . . . . . . . . . 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 Its 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.c. CERTIFIED PUBLIC ACCOUNTANTS . 400 WEST MAIN STREET MECHAtlICSBURG, PENNSYLVANIA 17055 (m) 766-4763 FAX (717) 766-2731 62 WEST POMFRET STREET CARLISLE, PA 17013 (717)243-4822 FAX (717) 258.'H72 JAMES E. LYONS HOWARD R. GREENAWALT L'REEDON R. HOFFMAN DEBORAH J KELLY R. A. GREENAWALT (1956_1983) A. 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, 2005, which collectively comprise Big Spring School District's basic financi,,1 statements and have issued our report thereon dated November 14, 2005. 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 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 -- AMERICAN INSTIT\JTE Or CERTIFlED PUBLIC ACCOUNTANTS -- PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC 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 (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 anel shouid not be used by anyone other than these specified parties. . t!:::v~A:~~/ Ie. . November 14, 2005 Mechanicsburg, Pennsylvania . . . . . - 2- t . GREENAWALT & COMPANY, P.C. CER.TlFIED PUBLIC ACCOUNTANTS . 400 WEST MAIN ST.EET MECHANICSBURG, PENNSYLVANIA 17055 (11T)766-4763 FAX (11T) T6HT31 62 WEST POMFRET STREET CARLISLE, PA 1701;' (717)243.4822 FAX (711) 258-9372 JAMES E. LYONS HOWARD R. GREENAWALT CREEDON R. HOfFM<",N DEBORAH 1- KELLY R. A. GREENAWALT (19S6-19iB) A. A. REIDINGER (RETIRED) C EDWARD ROGERS, JR Independent Auditors' Report on Compliance With Requirements . Applicable to Its 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 compliance of Big Spring School District with the type,; of compliance requirements described in the U.S. Office of Management and Budget (OM B) Circular A-133 Compliance Supplement that are applicable to its major federal program for the year ended June 30, 2005. 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 thaI: 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 tl1at 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 appiicable to its major federal program for the year ended June 30, 2005. . - 3- . MEMBERS __ AMERICAl\' INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS -- PENNSYLVANIA INS'J1TUTE OF CERTIFIED PUBLIC ACCOUNTANTS . . Independent Auditors' Report on Compliance Wilth Requirements Applicable to Its 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 wants 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 Schaal District's ability to administer a major federal program in accordance with the applicable requirements of laws, regulations, contracts and grants. The reportabie condition is described in the accompanying schedule of findings and questioned costs as item 2005-1. . 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 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, 2005, and have issued our report thereon dated November 14, 2005. 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 OMS 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 Its Major Program, Internal Control Over Compliance in Accordance With OMB 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 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.w& (-~~I I!c GREENAWALT & COMPANY, P.C. . November 14, 2005 Mechanicsburg, Pennsylvania . . . . . - 5- t BIG SPRING SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED JUNE 30, 2005 Grant Period Federal Grantor/Pass Source Federai Pass Through Beginning/ Throuah Grantor Proaram Titie Code CFDA # Grantor # Ending Date U.S. Department of Aariculture Passed through PA Department of Education National School Lunch Program I(F) 10.555 N/A 7/1104-6/30/05 National School Lunch Program I(S) N/A N/A 7/1/04-6/30/05 National School Lunch Program I(F) 10.555 N/A 7/1/03-6/30/04 National School Lunch Program I(S) N/A N/A 7/1/03-6/30/04 Passed through PA Depl. of Agriculture Value of USDA Donated Commodities I(F) 10.550 N/A 7/1/04-6/30/05 Total U.S. Department of Agriculture U.S. Department of Education Passed through PA Department of Education Title I 84.010 13-050037 7/1/04-9/30/05 Title I 84.010 13-040037 7/1/03-9/30/04 Title I - Academic Achievement 84.010 77 -040037 7/1/03-9/30/04 TitieV 84.298 11-050037 7/1/04-9/30/05 Title V 84.298 11-040037 7/1/03-9/30/04 Title II - Improving Teacher Quality 84.367 20-050037 7/1/04-9/30/05 Titie II - Improving Teacher Quality 84.367 20-040037 711/03-6/30/04 Title II - Improving Teacher Quality 84.367 20-030037 7/1/02-9/30/03 Title II - Educational Technology 84.318 55-050037 7/1/04-9/30105 Safe and Drug Free Schools 84.186 100-050037 7/1/04-9/30/05 Safe and Drug Free Schools 84.186 100-040037 8/26/03-9/30/04 Passed through Capital Area Intermediate Unit IDEA-B 84.027(M) 62-050015 7/1/04-6/30105 IDEA-B 84.027(M) 62-040015 7/1/03-6/30/04 Total U.S. Department of Education Totai Federal Awards -6- . . t . BIG SPRING SCHOOL DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Cont'd.) FOR THE YEAR ENDED JUNE 30, 2005 . 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 $ 1,469,754 Less: State expenditures 26,441 Total Federal expenditures $ 1443313 I I. I Major program Special Education Cluster IDEA-B, CFDA #84.027 $ 466 646 . Total 32.33% Source codes: I - Indirect funding . F - Federal share S - State share Legends: . (M) Major program . -7 - . . BIG SPRING SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2005 . 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. There were no instances of noncompliance disclosed during the audit which could be material to the financial statements of Big Spring School District. . 4 There was one reportable condition (2005-1) 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 program for Big Spring School District expresses an unqualified opinion. 6. There was one audit finding (2005-1) relative to the major federal award program for Big Spring School District . 7. The program tested as a major program was: 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 . t - 8 - t . BIG SPRING SCHOOL DISTI~ICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Cont'd.) FOR THE YEAR ENDED JUNE 30, 2005 . . C. Findings and questioned costs - major federal award program audit 2005-1 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, five of the six budget category balances did not agree with the accounting records. Effect . The District did not report expenditures based on the underlying accounting records; instead it appears the report was based on the budgeted expenditure categories. Cause . Lack of timely communication between all individuals involved. Recommendation . We recommend that all individuals involved in the reporting procl,ss be reminded that the amounts to be reported to the granting agency be based on actual expenditures and not based on the budget. . - 9- t Questioned Costs None . BIG SPRING SCHOOL DISTRICT SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS YEAR ENDED JUNE 30, 2005 . #2004-1 Reportable Condition - Maior federal award proaram audit . Special Education Cluster IDEA-B, CFDA#84.027 The District fully expended the grant award. However, two of the six budget category balances did not agree with the accounting records. . School District's Corrective Action At the beginning of the grant accounting process, all individuals involved in the process will meet to share program information and ensure that the appropriate grant information appears identically on the grant program documentation as well as the grant accounting records. All parties involved in the program implementation process will meet . periodically throughout the year to ensure that the record-keeping is consistent. Status The District has not corrected the aforementioned deficiency in the current year. This finding is included in the current . year as finding 2005-1. . . . . - 10 - . ~ ~ ,~ ~ ~." . \~ :). '~ ~~ .~ '" ....~- .'\- .. ~ <0 7~-: S~.:1 "';1 :i, ~ ~ ~ C'J l'l ::1._ _) ,-- LL o c-..