By Mac Cordell firstname.lastname@example.org
February 19, 2014
Ohio Auditor of State David Yost recently released an audit of the London City School District.
The single audit, conducted by Kennedy Cottrell Richards LLC, was for the fiscal year ended June 30, 2013.
Auditors reported no fraud or findings for recovery, though they did report a “significant” deficiency in internal control regarding the districts free and reduced lunch program.
Federal guidelines require that each child receiving free and reduced lunches must submit an application to the district each year. The district then needs to certify the child’s family size and income to verify they meet the eligibility standards issued by the Office of Food Nutrition Services. The district’s food service coordinator also reviews the application and determines the level of eligibility: free, reduced or does not qualify. A different district official is to perform a secondary review of each application. The application must be approved and maintained on file.
Auditors noted that during their testing of the free/reduced applications, three of the 60 free/reduced student applications they selected for testing, could not be located, “so we were unable to verify the students’ eligibility.”
Additionally, there was no evidence of a secondary review of the eligibility determination for one of the 60 applications tested.
“Though the noncompliance we noted was not material, we consider the significant deficiency in internal control important enough to merit attention by those charged with governance,” according to the audit.
The auditor noted that the free and reduced lunch program had impact on other grant based programs.
“For the Title I program, the District elected to measure its poverty level and identify eligible school attendance areas by the number of children eligible for free and reduced priced meals under the Richard B. Russell National School Lunch Act,” according to the audit. “Thus, this significant deficiency also impacts the District’s eligibility determination for the Title I program.”
The auditors offered a suggestion.
“We recommend the district establish policies and procedures regarding eligibility determination to ensure that all applications are approved by both the Food Service Coordinator and the Assistant to the Food Service Coordinator and all applications are maintained on file,” Kennedy Cottrell Richards LLC, wrote.
When notified of the finding, district officials responded to the auditors office.
“The District has policies and procedures in place to mitigate instances of noncompliance,” according to the district response, included with the report. “The procedure will be modified to include a secondary review of all applications on file and match these applications to a master list of all eligible students.”
Kristine Blind, treasurer of London City Schools, could not be reached for comment.
According to the audit, for 2013, the general revenues accounted for $20.8 million. Program specific revenues in the form of charges for services and sales, grants, and contributions accounted for $4.2. Total revenues equaled $25.0 million. Original estimated revenues were $18.0 million and final estimated revenues were increased to $19.2 million.
“The variance between final estimated revenues and actual revenues was insignificant,” according to the audit.
Additionally, the District had $23.8 million in expenses related to governmental activities; only $4.2 million of these expenses were offset by program specific charges for services and sales, grants and contributions. General revenues — primarily grants, entitlements, property taxes, and income taxes — of $20.8 million were adequate to provide for these programs, according to the audit. The original estimated expenditures were $18.5 million and final estimated expenditures were increased “slightly” according to the audit, to $18.6 million.
“The variance between final estimated expenditures and actual expenditures was insignificant,” wrote the auditor.
According to the audit, at fiscal year-end, “the District had $53.3 million invested in land, land improvements, buildings and improvements, furniture, equipment and fixtures, vehicles, and textbooks and software, a decrease of $1.4 million in comparison with the prior fiscal year. This decrease represents the amount in which current year depreciation of $2.1 million exceeded current year additions ($675,132).”
The auditors noted, however, that numbers do not really show the success of a school district.
According to the auditors, “…the District’s goal is to provide services to our students, not to generate profits as commercial entities do. One must consider many other non-financial factors, such as the District’s property tax base, current property tax laws in Ohio restricting revenue growth, required educational programs and other factors.”
The District serves an area of approximately 54 square miles. The District is located in Madison County and encompasses all of the City of London and portions of Deer Creek, Somerford and Union townships. It is staffed by 70 non-certificated employees and 141 certificated employees who provide services to 2,032 students. The District currently operates two instructional buildings and one bus garage.
The Auditor of State is the constitutional officer responsible for auditing all public offices in Ohio, which encompasses more than 5,800 local governments, agencies and organizations.
The Auditor of State’s office conducts audits of cities, villages, schools, universities, counties, fire districts, townships, cemeteries, libraries, state and county agencies and commissions.
Mac Cordell can be reached at (740) 852-1616, ext. 21 or on Twitter @MacCordell.