WEST NEWBURY – The internal controls needed to detect and prevent significant financial problems for the Pentucket Regional School District appear to be in place, according to a new report from the district’s auditor. However, in the report’s management letter, auditors identify several “opportunities” for school leaders to positively tweak controls and operating efficiencies.
The report begins by highlighting an issue pertaining to decreases in the school lunch program -- a finding that was identified in a previous year’s audit but remains unresolved. Revenues from lunch sales dropped by $56,000 in fiscal year 2011. The district raised fees the following year, but the program’s fund balance remains drastically low at under $10,000. And a plan to assess the program’s share of employee benefits was not executed.
Auditors stress the need for an annual budget for the lunch program, developed with input from those responsible for meeting its goals, that facilitates monitoring projected and actual operational expenses throughout the year. “This would allow management to better respond and plan for potential shortfalls as well as reduce the future impact on the district’s general fund,” the audit report states. Under state law the school lunch program must either be profitable or funded by the district.
In a second recommendation auditors suggested that in order to comply with the state’s annual reporting requirements set by the Governmental Accounting Standards Board, Pentucket must implement procedures to account for “material fixed asset additions, deletions, disposals and transfers” and maintain a fixed asset management sub-system for all fixed assets.
The report points out that the district had a $93,000 deficit in its COBRA and retiree insurance withholding accounts at the end of the fiscal year -- something that can happen when employee coverage is not discontinued when it should or the former employee is not being charged enough to cover their share of premiums. The auditors said the district should reconcile the deficit balance to the amounts that have been collected and paid out, then implement a procedure to address the problem going forward.