School System Receives FY14 Audit

After months of waiting, the Stephens County school system has its Fiscal Year 2014 audit.

The school system received the audit for the period from July 1, 2013 to June 30, 2014 late last week.

Stephens County School Superintendent Bryan Dorsey said that there were no surprises in the audit, but it does confirm how severe of a situation that the Stephens County school system was facing financially.

Dorsey said that the school system was in the red and facing a deficit at the end of Fiscal Year 2013 and that deficit only grew by the end of Fiscal Year 2014.

“That $1.2 million deficit we had in FY13 had grown to $3.1 million plus in FY14, so you can see it had jumped more than $2 million,” said Dorsey.

Also, he said the audit shows that the school system’s budget for Fiscal Year 2014 would have grown that deficit even more.

“In FY14, we brought in more than $32 million but we spent over $37 million, so we had an excess of expenditures over revenues of over $5.1 million,” said Dorsey.

Compounding the problem, he said, was the borrowing of money across fiscal years by the school system.

Dorsey said if nothing had been done in the Summer and Fall of 2014, things would have been very bad in Fiscal Year 2015.

“Without some significant changes, our most likely outcome for FY15 would have been over an $8.2 million deficit we would have been dealing with had this not been stopped as soon as it was,” said Dorsey.

Dorsey said that the school system has recovered from this, a recovery that will begin to show in audit form in Fiscal Year 2015.

Meanwhile, the school system was cited by state auditors in the Fiscal Year 2014 audit for several findings it considers material weaknesses.

According to state auditors, the school system did not prepare financial statements in accordance with generally accepted accounting principles, the school’s system’s accounting procedures were insufficient to provide adequate internal controls over operations, and the school system reported a deficit fund balance and failed to adopt a balanced budget.

All of those findings were also present in the Fiscal Year 2013 audit.

Dorsey said it is taking time to clean up all of the errors that were in place when he arrived near the end of Fiscal Year 2014 because of when the errors were found.

One new finding involved Title I programs, where state auditors say the school system did not have sufficient procedures to provide adequate internal controls over allowable costs/cost principles, cash management and financial reporting for the Title I Grants to Local Educational Agencies program.

Dorsey said that could result in the school system having to pay back some $300,000 if it cannot account for how the money was spent.

“It might not have been spent on the conditions that Title I requires,” said Dorsey.

Overall, Dorsey said that these are problems that occurred two years ago and while he says the school system is doing everything properly now, it will take time several years of audits to show that the school system has corrected all of these issues.

FY14 Audit