By MIKE COURSON
Great Bend Post
USD 431 Hoisington has a little work to do on its accounting. That was the message from Adams Brown CPA Danielle Hollingshead during last Monday's board of education meeting. She opened her summary of the district's audit with the independent auditor's report.
"At the very beginning of the letter, we give you an adverse opinion on generally accepted accounting principles," she said. "That's because you waive GAAP (Generally Accepted Accounting Principles) and you follow regulatory basis of accounting instead, which is KMAG (Kansas Municipal Audit Guide)."
Some of the issues in the audit caused delays, and the figures presented at Monday's meeting reflected balances from June 30, 2023. One issue was the accounting behind federal programs.
"Some of them have positive cash balances but they're reimbursement-based, meaning you can't pull them down until you've spent them," Hollingshead said. "Just watching that closer because, when they see these reports, they're not going to like that. They don't want to see that you're pulling money before you've spent it."
Hollingshead reported two statutory violations. School districts are required to notify the state 20 days prior to when bond payments are due to ensure the state money for payment is available. USD 431 did not meet that requirement. Districts must also put any projects exceeding $20,000 out for bid, and Adams Brown reported two violations.
Hollingshead suggested several policy changes in the district to shore up accounting practices, including standardizing how checks are signed and how bank reconciliations are completed.
"While some of the bank reconciliations were completed, they were completed incorrectly," she said. "They weren't done right. We had to go in for the audit and we had to actually re-reconcile from September on. Just making sure those are done timely, that they're reviewed correctly, that the person reviewing them understands them and making sure there are some good controls there so your financial statements are accurate that you're making your decisions on."
Hollingshead also suggested better accountability on receipt submission. In the month reviewed, 18 of 43 credit card receipts were missing. She also suggested a review of policy on adjusting journal entries.
"Any entries that are made, they need to have a preparer and a reviewer sign off and document and making sure that whoever is reviewing those is truly understanding what those journal entries are doing," she said.
Hollingshead acknowledged some turnover in the district and a staffing shortage, but said stronger policies would benefit employees new to the accounting processes.