HomeMy WebLinkAboutNantucket Schools AUP 17
TOWN OF NANTUCKET PUBLIC SCHOOLS
STUDENT ACTIVITY ACCOUNTS
REPORT ON APPLYING
AGREED-UPON PROCEDURES
OVER COMPLIANCE IN RELATION TO THE
STUDENT ACTIVITY ACCOUNTS GUIDELINES
FOR MASSACHUSETTS SCHOOL DISTRICTS
YEAR ENDED JUNE 30, 2017
TOWN OF NANTUCKET PUBLIC SCHOOLS
STUDENT ACTIVITY ACCOUNTS
REPORT ON APPLYING
AGREED-UPON PROCEDURES
OVER COMPLIANCE IN RELATION TO THE
STUDENT ACTIVITY ACCOUNTS GUIDELINES
FOR MASSACHUSETTS SCHOOL DISTRICTS
YEAR ENDED JUNE 30, 2017
TABLE OF CONTENTS
INDEPENDENT ACCOUNTANT’S REPORT ON
APPLYING AGREED-UPON PROCEDURES…………………………………………… 1
OBSERVATION (Schedule I)….…………………………………………………………….. 2 - 6
INDEPENDENT ACCOUNTANT’S REPORT ON
APPLYING AGREED-UPON PROCEDURES
To the Superintendent of Schools
And School Committee
Nantucket Public School District:
Dear Mr. Cozort:
We have performed the procedures specified in the Agreed Upon Procedures and Audit Guidelines for
Student Activity Funds issued in 2017 by the Massachusetts Department of Elementary and Secondary
Education (the “Guidelines”), which was agreed to by the Office of the Superintendent of Schools of the
Nantucket Public Schools (the District). The procedures were performed, solely to assist you in
evaluating the District’s assertion that with regards to its student activity accounts of its elementary
schools, it has complied with these Guidelines. This engagement to apply agreed-upon procedures was
performed in accordance with attestation standards established by the American Institute of Certified
Public Accountants. The sufficiency of these procedures is solely the responsibility of the parties
specified in this report. Consequently, we make no representation regarding the sufficiency of the
procedures performed, which are set forth in the Guidelines, either for the purpose for which this report
has been requested or for any other purpose.
We have attached to this report our findings as Schedule I.
We were not engaged to, and did not conduct an audit, the objective of which would be the expression of
an opinion on the District’s compliance with the Guidelines. Accordingly, we do not express such an
opinion. Had we performed additional procedures, other matters might have come to our attention that
would have been reported to you.
This report is intended solely for the information and use of the District, its management, the School
Committee and the Massachusetts Department of Elementary and Secondary Education and is not
intended to be and should not be used by anyone other than the specified parties. However, this report is
a matter of public record and its distribution is not limited.
Roselli, Clark and Associates
Certified Public Accountants
Woburn, Massachusetts
September 29, 2017
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SCHEDULE I – FINDINGS AND OBSERVATIONS
FISCAL YEAR ENDED JUNE 30, 2015
Introduction
A student activity account shall be used for monies raised by students or student organizations and which
will be expended by those students or student organizations for their benefit. Monies deposited to a
student activity account are governed by Massachusetts General Law (“MGL”) Chapter 71 paragraph 47,
as well as the policies of the School Committee. These provisions include procedures with respect to (1)
the establishment of an interest bearing bank account and a checking account through the involvement of
the Town Treasurer, (2) certain disbursement procedures, and (3) auditing and reporting requirements.
Recently, the Massachusetts Department of Elementary and Secondary Education (ESE) issued a
compliance supplement summarizing the major mandates of maintaining compliant student activity funds
with appropriate checklists that are used for audit. We have used this checklist and conducted the
suggested procedures contained within the document. Resultant of this process is a summary of our
observations highlighted in this report. We are hopeful this will assist the District to gain further
compliance with the applicable laws and regulations.
Our observations are broken up into three sections:
Section 1 – Specific findings that relate to Nantucket Elementary School
Section 2 – Specific findings that relate to the Cyrus Peirce Middle School
Section 3 – Specific findings that relate to the Nantucket High School
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Nantucket Elementary School
The Elementary School activities are now limited to fund raising for a camp trip, field trip and some other
minor activities. All disbursements greater than $5,000 are now processed at Town Hall and charged to
the Agency account. This has limited the amount of disbursements at the Elementary School level to
about 15 items. In our prior report we communicated to management that the process between fiscal 2013
and 2015 had improved significantly. Since 2015, we continue to see some improvements but we also
made some observations which if implemented would improve overall efficiency, accuracy and
safeguarding of assets.
Improvements
1.Transactions are now recorded on a standard spreadsheet by the School Business Office. This
spreadsheet reports activity to both the checking account and the savings account and is used as a
reconciling tool to the records maintained by the Treasurer and the Accounting Office.
2.Cash collected is now brought daily to the Principal’s Office and maintained in a secure location.
3.Deposits are made to the savings account more frequently.
4.Cash handlers are now bonded thereby protecting the School from loss or misappropriation.
Observations
1.The Elementary School would benefit from a filing system that is more organized than the current
system in place. Supporting documentation is maintained in a folder along with documentation
from gifts and other activities and is not easily reviewable. In addition it is not clear which
transactions have been recorded in the checking account as opposed to those recorded in the
savings account.
2.The activity with the most dollars and volume consists of Natures’ Classroom, an overnight
camp, which is funded primarily from sales of Sunkist oranges and grapefruits. Almost $50,000
is collected in $30 and $60 transactions. Receipts are provided to those who purchase oranges and
grapefruits and these receipts are turned in with the funds that are collected; however the receipts
are never reconciled to the checks and cash prior to deposit. In order to add a stronger level of
internal control, we suggest that a reconciliation process is put in place.
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Cyrus Peirce Middle School
Similar to the Elementary School, the activities of the Middle School have also diminished; checks
greater than $5,000 are processed through the Town warrant and many activities which were previously
deemed curriculum activities, have been discontinued.
The process at the Middle School is very good and has improved significantly since fiscal year 2015.
Improvements
1.Transactions are now recorded on a standard spreadsheet by the School Business Office. This
spreadsheet reports activity to both the checking account and the savings account and is used as a
reconciling tool to the records maintained by the Treasurer and the Accounting Office.
2.Cash collected is now brought daily to the Principal’s Office and maintained in a secure location.
3.Deposits are made to the savings account more frequently.
4.Cash handlers are now bonded thereby protecting the School from loss or misappropriation.
Observations
1.We observed that the outstanding student activity balances have increased significantly in size
since 2015; the total balances which were barely over $20,000 have now reached almost $40,000.
This is due to fund raising efforts exceeding the cost of these activities from year to year. For
example, the yearbook cost is quoted at approximately $5,000 and this is how it is priced out to
the students. However the School ends up obtaining many discounts and saves approximately
$900. This savings is never passed back to the students and is just allowed to accumulate
annually in the fund.
We suggest the School increase its level of co-curricular activities using these excess funds as a
source or return the funds to the class accounts and transfer them to the High School when the
students leave the Middle School.
Nantucket Public Schools Page 4 of 6 Student Activities
Nantucket High School
The administration of the Nantucket High School student activities has undergone the most critical
changes over the past two years and these have been met with much success. The School’s filing system
is very organized; all disbursements are supported by a copy of the check and an invoice; and all emails
documenting any discussions with items that are not straight forward are also included in the files. The
process has become well supported and transparent and we encourage the administrators to continue with
this trend.
This is particularly important since these activities support dozens of clubs, over 300 transactions and
over $200,000 in annual activity therefore strong controls are critically important.
Improvements
1.Transactions are now recorded on a standard spreadsheet by the School Business Office. This
spreadsheet reports activity to both the checking account and the savings account and is used as a
reconciling tool to the records maintained by the Treasurer and the Accounting Office.
2.Cash collected is now brought daily to the Principal’s Office and maintained in a secure location.
3.Deposits are made to the savings account more frequently.
4.Cash handlers are now bonded thereby protecting the School from loss or misappropriation.
5.All disbursements are documented.
6.All communication with the School Business Office and Principal regarding questionable
disbursements are vetted and these discussions are documented.
Observations
1.The standard spreadsheet we received listed 4 accounts that have deficit balances. These were for
stagnant previously graduated class accounts in which the District was attempting to transfer
funds back to the class. These deficits need to be cured in some manner; possibly by retrieving
the overpayment or from a surplus account. (We understand this was corrected subsequent to
year-end.)
2.In the standard spreadsheet it was observed that transfers required from the agency account to the
Town’s checking account reimbursing the account for disbursements made on behalf of the
student activities had not been made by the Treasurer’s Office. This amount approached
$300,000 and was rolled forward as a reconciling item. This was a byproduct of the significant
turnover in the Treasurer’s Office during fiscal year 2017 and it was the intention of the office to
make the adjustment upon the conclusion of the audit.
3.In the standard spreadsheet there were 3 class accounts for graduating seniors that were still being
carried. After further review it was determined that the money in these accounts had been
disbursed but the entries had not been made on the spreadsheet and were carried as reconciling
items to balance to the bank. These have since been adjusted.
4.A deposit made into the Student Activity accounts in June 2016 was made in error as it should
have been posted to a gift account. The error was not corrected in the standard spreadsheet until
June 2017 despite it being discovered much sooner and was carried as a reconciling item. This
has since been corrected.
5.The Schools did not issue a 1099 to an individual who earned well in excess of $600; a W9 was
not received for that individual either. Since the Schools are not set up to issue 1099s we suggest
individuals vendors who are expected to earn more than $600 are processed through the Finance
Department warrant process.
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6.There are several accounts that have accumulated very large balances in relation to their annual
activity. Spanish, Drama, AP tests, SAT tests, Music and School to Career have over $100,000
combined in these accounts at year-end. The District should evaluate these balances and
determine why they have accumulated to such a large amount and evaluate the fees associated
with these accounts. One option is to return funds to the class account if not used at year-end.
Nantucket Public Schools Page 6 of 6 Student Activities