The state auditor’s office wants the Everett School District to change the way it lists the charges for some construction projects on its books and have the school district tighten its policies on vehicle use by employees.
These issues were among those discussed in a 14-page report by the state auditor’s office in an annual review of district finances. The report is scheduled to be posted on the state agency’s website next week.
Four members of the audit team met Monday evening with all five members of the Everett School Board, Superintendent Gary Cohn and other school employees to discuss the audit.
One of the issues involved $5.1 million in construction costs that came near the end of the school district’s budget year. The bills were paid the following year.
Essentially, the construction bills should be subtracted not when a check is written for the work, but as the work is being conducted, the report found. “You recognize a (financial) liability even though it’s several months before you report the invoice,” said Chuck Pfeil, the state agency’s director of state and local audits.
This meant the construction expenses were unreported in one financial year and over-reported in the next, said Casey Dwyer, audit manager in the state auditor’s office.
This issue was found only in the capital projects fund and not the school district’s general fund, said Lucky Bradley, another member of the audit team.
Jeff Moore, who directs the school district’s finance department, said that the school district had misinterpreted a recommendation on how to account for construction charges.
In its formal written response, the school district noted that for the past 23 years, it has received an award from the Association of School Business Officials as well as awards from the Government Finance Officers Association for excellence in financial reporting.
The school district promised to changes its practices to meet the requirements laid out by the auditor’s office.
The issue, called a finding, is a step the auditor’s office takes to bring attention to an issue, said Mindy Chambers, spokeswoman for the auditor’s office.
The school district has agreed to put systems in place to ensure it doesn’t happen again, she said. “That’s the best outcome of an audit,” she said. “They take our recommendations and put in practices and procedures to make sure there’s great accountability over public resources.”
The audit team also noted that the school district owns five vehicles that are assigned to department supervisors and managers who regularly drive the vehicles home.
For the financial year ending Aug. 31, 2011, these vehicles cost the school district $23,285.
Without adequate monitoring, the school district cannot ensure vehicles and fuel are used only for official district purposes, the auditor’s office said.
Maintaining logs on government vehicles is a big deterrent against improper use, Pfeil said. “They’re much less likely to take advantage if they know it’s being monitored,” he said.
The state report also called for better marking of the vehicles with contrasting colors to clearly identify them as district property. The vehicles were marked, but not in contrasting colors, as required by state law.
The school district has changed the markings on the cars and now has photographs of every vehicle in its fleet, Cohn said.
The five vehicles mentioned by state auditors are assigned to transportation and maintenance employees who can be called out in the middle of the night to respond to snow and other emergencies, Cohn said.
Issues with vehicle use and theft of fuel have been found elsewhere on a spot basis in government agencies by the auditor’s office, Chambers said.
“The whole point behind this is to be sure, especially in times when gasoline is very expensive … that they have really good controls in place to make sure that it doesn’t happen to them,” Chambers said.
Sharon Salyer: 425-339-3486; email@example.com.