By GLYNIS HART
[email protected]
UNITY – The Unity School Board took another step out of a slough of financial mismanagement the district has been mired in for years. On Tuesday night, the board voted on a new job description for the school board treasurer. Mike O’Neill, new business manager for School Administrative Unit #6, also presented the results of an independent audit of Unity school finances for 2015 and described the remedies he has applied to what the accountants term “material weaknesses and significant deficiencies” in the school’s books.
School Treasurer Bob Day was present for the discussion and reviewed the new job description. Day previously served as treasurer several decades ago, when his children were in school. He told the Eagle Times he stepped down from the school board last March in order to become treasurer this time.
Sarah Lowe, chair of the school board, introduced the second reading of the treasurer’s job description. The main point of discussion was that the new treasurer must “keep an accurate ledger of all sums received and paid.”
“As of right now, the treasurer does not keep their own separate ledger from the SAU,” said Lowe.
Day said, “I did keep a ledger 20-plus years ago. On a monthly basis, you’re always more than one month behind; by two months, 90 percent of the checks are in.”
The Town of Unity collects the tax money for the school and deposits the funds at Claremont Savings Bank; the SAU allocates money to the school every month to meet its expenses. In previous meetings Lowe and others pointed out that the school has been out of the loop and the board hasn’t been kept up to date.
“In the past, our town treasurer and school treasurer were the same person,” said Lowe. “She’s been reluctant [to keep a ledger for the school board]. That’s part of why we’re getting this clear, so we can be clear with the town as well.”
Day, O’Neill (who arrived later in the meeting) and Interim Superintendent Keith Pfeifer said the SAU’s ledger is much more detailed, and it would be very difficult for the treasurer to be as detailed.
“He doesn’t need a correct balance,” said O’Neill. “He would just list it by voucher.”
After a bit more back-and-forth, the board agreed to change the language to “keep an accurate summary.” All voted in favor except Bob McDevitt.
O’Neill presented the findings of independent auditors Plodzik & Sanderson for the fiscal year ended June 30, 2015. O’Neill, who was hired this year, and the auditors are working their way through the last four years: “2016 is done,” he said.
Overall, the district has responded to the audit by tightening financial oversight procedures and restoring checks and balances in areas where duties were too segregated.
The auditors listed the following problems:
“The general ledger is not reconciled on a monthly basis.” O’Neill said this has been remedied, and all cash accounts are reconciled every month and invoices are paid when they are entered. Further, all payroll liabilities are reconciled and paid monthly.
“Most journal entries were not authorized and did not have supporting documentation.” O’Neill described a confusion of entries, in which some staff would make entries and other staff would change them. This has been changed so that the Director of Business and Finance – O’Neill – approves all journal entries.
The auditors found that custody of the capital project bank account should have been under the Treasurer instead of the Director of Business and Finance, providing additional oversight. The capital project bank account, however, is no longer active.
Cash receipts “should be handled by more than one member of the school district’s personnel,” the auditors wrote. “One employee… should open the mail, make a control list of receipts, and restrictively endorse all items received as ‘for deposit only.’… The receipts should then go to another employee for further processing and deposit to the bank on a timely basis.”
O’Neill said this has been implemented, with the receptionist opening the mail and making the list, the Assistant Director of Finance making the deposit, and the Director of Business and Finance reviewing all the deposits and reconciling the cash accounts.
A similar process was followed to make sure vendor and payroll manifests were approved by the Board and O’Neill. In 2015, checks were often signed and released before the board approved them.
The district failed to apply in a timely manner for federal grant reimbursements in 2015, sometimes lagging six months behind. Now, the SAU has a grant management consultant to make sure reimbursement requests are on time.
Student activity funds also raised red flags for the auditors, as supporting documentation was missing for some payments and it could not be proven the funds were used solely for student activity purposes. O’Neill said that Claremont schools have all student activity accounts on Quicken (a bookkeeping system) and recommended that Unity do the same.
Finally, food service deposits were made late, and that has been changed so they are made weekly.
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