Finding Text
*24-06 Comingling of Funds
Finding: The Board of Education maintains one cash account for operations and grants. The
comingling of operational and grant monies makes it difficult if not impossible to reconcile
with the City.
Criteria: A separate bank account should be maintained for grant income and expenditures to
properly track inflows and outflows of grant monies. Assets such as grants receivable and
liabilities such as deferred inflows and accounts payable should also be recorded and
reconciled monthly.
Cause: Improper classification of grant funds.
Effect: Significant errors can occur and not be timely detected. Also see findings 24-01, 24-04 to
24-05.
Recommendation: We recommend that the Board of Education utilize the accounting system to reconcile cash,
accounts receivable, accounts payable, deferred inflows of financial resources in addition to
the income and expenditures for educational grants. In addition, we recommend moving the
grant accounting from the General Fund to a Special Revenue Fund where it is better
classified.
Management’s
Response: Completed - As of July 1, 2023, the Board of Education separated Operating and Grant
check runs to hit the respective bank accounts. This also includes the payroll account.
Grant payroll totals are transferred to the payroll account from the Grant account.