FAC Explorer

Finding 398483 (2023-002)

Significant Deficiency Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2023
Accepted
2024-05-24
Audit: 307206
Organization: Crazy Horse School (SD)
Auditor: Donna Denker & Associates

AI Summary

  • Core Issue: Year-end balance sheet accounts were not adjusted before the audit, leading to late entries and uncorrected errors from prior years.
  • Impacted Requirements: Internal controls and segregation of duties are essential for accurate financial reporting and safeguarding assets; this finding is a repeat from the previous year.
  • Recommended Follow-Up: The Business Manager should focus on training staff and ensuring all year-end adjustments are made to enhance audit timeliness and accuracy.

Finding Text

Criteria: Internal controls including proper segregation of duties should be in place to provide reasonable assurance that all financial transactions are properly reported, and assets are safeguarded. This is essential to ensure accurate internal and external financial statements can be prepared. Management must have accurate financial information in order to monitor, control and execute decisions in the best interest of the School. All year-end adjustments should be completed prior to commencing the audit. Condition: The business staff had prepared many schedules and journals in anticipation of the year end closing and audit, but they did not actually adjust some of balance sheet accounts, before the audit commenced. From the information provided by the School we did post 15 late client entries. During our testing we also identified additional accounts needing adjustment. This process did identify several errors coming forward from prior years that had not been identified previously. Context: Many issues reported previously were corrected in the current year but there are still several closeout processes that need to be finished. A new Business Manager was hired in March of 2020. She and her new business office staff spent considerable time over the last several years correcting, researching and recording for the past years in order to complete the audits and get the School back in compliance. Cause: Dealing with many of the prior issues takes time and attention away from current duties. Effect: The effectiveness of the internal control system relies on prudent policies and enforcement by management and the Board of Education. Close out and reconciliation of all balance sheet accounts at year end is the final step of reviewing transactions and accounts to assure all errors are corrected in your accounting records. Identification of Prior Audit Findings: This finding is a repeat of prior year findings 2022-002. Recommendation: It is the School’s responsibility to determine the financial statements, schedule of expenditures of federal awards and related footnotes are free of material misstatement. The most effective controls lie in management and the Board of Education’s knowledge of the School’s financial operations. Supervision and review functions must be done continually during all phases of the accounting cycle. With a small staff in the business office, cross training becomes exceptionally important. The Business Manager should continue training with her staff and working to record all year end adjustments. These processes will improve disclosure information and the timeliness of the audits. Views of Responsible Officials: The views of management are included in the corrective action plan beginning on page 40.

Corrective Action Plan

2023-002 FINDING: Internal Controls over Financial Reporting Question Cost: None noted. Not considered a material weakness Response: Crazy Horse School Business Office staff will follow auditor’s recommendation. The Business Manager will determine the financial statements, schedule of expenditures of federal awards and related footnotes are free of material misstatement and the audit package is filed timely. The most effective controls lie in the management and the Board of Education’s knowledge of the School’s financial operations. Supervision and review functions will be done continually during all phases of the accounting cycle. Cross training with the Business Office staff will continue to be done. The Business Manager will continue to assist with disclosure information and approve any adjusting entries to the trial balance. She reviews and approves all draft and final copies of the financial statements including disclosures. In light of the guidance of SAS 115, the Business Manager will continue additional and continuing training for herself as well as the designated staff. The goal is still to provide training in government financial reporting and current reporting standards to enable management to continue to take the responsibility for the statements and disclosures. The school will continue their implantation of their new financial policies and take steps to ensure they are being followed. All expenditures will continue be reviewed to ensure they are properly documented, coded, and the expenditures are allowable for grant. Review of paychecks will continue to include recalculation of hours on timesheets and leave accrual calculation. With the continue Covid, Flu Seasons, Weather closures, Funeral closures, and my illness this past year has made it very difficult at times to get things done in a timely manner. We will continue to improve and hope to have a better year. This School’s financial stability is better than it has been for years with a clean opinion and no question costs. We will continue to improve, with our outstanding Business Office Staff, and we will continue to make sure we are on top of the internal controls daily. We are not perfect and there is always room to get better and better! ANTICIPATED COMPLETION DATE: June 30, 2025 PERSON(S) RESPONSIBLE: Leslie Cuny, Business Manager

Categories

Internal Control / Segregation of Duties HUD Housing Programs Reporting

Other Findings in this Audit

  • 398482 2023-001
    Material Weakness Repeat
  • 398484 2023-001
    Material Weakness Repeat
  • 398485 2023-002
    Significant Deficiency Repeat
  • 398486 2023-001
    Material Weakness Repeat
  • 398487 2023-002
    Significant Deficiency Repeat
  • 398488 2023-001
    Material Weakness Repeat
  • 398489 2023-002
    Significant Deficiency Repeat
  • 398490 2023-001
    Material Weakness Repeat
  • 398491 2023-002
    Significant Deficiency Repeat
  • 974924 2023-001
    Material Weakness Repeat
  • 974925 2023-002
    Significant Deficiency Repeat
  • 974926 2023-001
    Material Weakness Repeat
  • 974927 2023-002
    Significant Deficiency Repeat
  • 974928 2023-001
    Material Weakness Repeat
  • 974929 2023-002
    Significant Deficiency Repeat
  • 974930 2023-001
    Material Weakness Repeat
  • 974931 2023-002
    Significant Deficiency Repeat
  • 974932 2023-001
    Material Weakness Repeat
  • 974933 2023-002
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
15.042 Indian School Equalization Program $2.66M
84.425 Education Stabilization Fund $1.53M
15.046 Administrative Cost Grants for Indian Schools $730,753
84.027 Special Education_grants to States $694,587
84.010 Title I Grants to Local Educational Agencies $687,188
15.047 Indian Education Facilities, Operations, and Maintenance $621,043
15.044 Indian Schools_student Transportation $548,116
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $362,716
84.299 Indian Education -- Special Programs for Indian Children $172,202
10.555 National School Lunch Program $128,078
84.336 Teacher Quality Partnership Grants $68,242
15.151 Education Program Enhancements $62,625
84.060 Indian Education_grants to Local Educational Agencies $60,398
10.553 School Breakfast Program $37,564
84.424 Student Support and Academic Enrichment Program $9,583
10.582 Fresh Fruit and Vegetable Program $6,243
10.565 Commodity Supplemental Food Program $2,140
84.369 Grants for State Assessments and Related Activities $537
84.358 Rural Education $46