Finding Text
Criteria
A process should be in place to ensure that the Academy complies with laws and regulations.
Condition
There were instances identified where the Academy was not in compliance with laws and regulations. State School Aid Act MCL 388.1718 requires that annual audits be submitted by November 1 to the Michigan Department of Education. Finally, the Academy was in violation of the Uniform Budgeting and Accounting Act in that there was a deviation from the amended budget.
Context
We noted that the Academy didn’t monitor the budget to actuals on a regular basis. Also, there were shifts in the accounting staff that led to the submission delay. In addition, the different opinions and pre-approvals received as to being an eligible sub-recipient led to delays.
Cause and Effect
There was a change in staff and staff shortages, which led to noncompliance with MCL 388.1718 and deviations in budget to actuals.
Recommendation
We recommend that the Academy implement a process that identifies specific individuals for identifying and monitoring applicable compliance requirements throughout the year.
Management’s Response
The necessary review and analysis of GL accounts will be completed according to the established month end and annual close procedure check lists. Audit engagement will begin no later than August for 2023 SY. Any new, as well as current staff, will receive periodic in-service centered around the MI Public School Accounting manual to ensure thorough understanding of the expectations and processes for school fund accounting.