EIN: 416003769
UEI: X6XXC4QH76H5
Audited by: Sterle & Co, Ltd
Oversight agency: 21 [Department of the Treasury]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on January 8, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by July 8, 2026 (53 days ago).
What is a management decision? →Inadequate segregation of duties within a significant account or process - significant deficiency Condition - Due to the limited number of District staff, appropriate segregation of duties is not feasible for all accounting and reporting functions. Specifiic examples include: a. The District places the authority over the year end financial reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger; and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager) b. The District has several staff that have duties involving both processing and recording transcations into the general ledger. Such duties are involved in the district's cash receipting, disbursing and payroll functions. Several employees have access to the initial processing of the information as well as subsequent recording into the general ledger. c. The District has several departments that are responsible for the collection of fees charged to students and the general public. Thr departments are responsible for the collection, processing and reporting to the business office. In most instances, one individual in each department performs those duties. Criteria: A good system of internal control requires an adequate segregation of duties so that no one individual has incompatible responsibilities. No one person should have more than one duty relating to the authorization, custody of assets, record keeping, and reconciliation functions. Cause: Generally the lack of segregation is due to the limited funding available to add additional staff to appropriately divide related duties. Effect: The lack of segregation of duties creates a control deficiency because the design/operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common cirucumstance in districts of a similar size. Recommendation: The District's management needs to be cognizant of this situation which may include re-assigning duties, adding additional reconciling features, or providing appropriate oversigh responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate and as resources and stagging abilities arise. The District considers this an on-going process. Repeat Finding: Yes - Prior year finding noted as 2024-002
Show full finding ▾Hide full finding ▴Inadequate segregation of duties within a significant account or process - significant deficiency Condition - Due to the limited number of District staff, appropriate segregation of duties is not feasible for all accounting and reporting functions. Specifiic examples include: a. The District places the authority over the year end financial reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger; and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager) b. The District has several staff that have duties involving both processing and recording transcations into the general ledger. Such duties are involved in the district's cash receipting, disbursing and payroll functions. Several employees have access to the initial processing of the information as well as subsequent recording into the general ledger. c. The District has several departments that are responsible for the collection of fees charged to students and the general public. Thr departments are responsible for the collection, processing and reporting to the business office. In most instances, one individual in each department performs those duties. Criteria: A good system of internal control requires an adequate segregation of duties so that no one individual has incompatible responsibilities. No one person should have more than one duty relating to the authorization, custody of assets, record keeping, and reconciliation functions. Cause: Generally the lack of segregation is due to the limited funding available to add additional staff to appropriately divide related duties. Effect: The lack of segregation of duties creates a control deficiency because the design/operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common cirucumstance in districts of a similar size. Recommendation: The District's management needs to be cognizant of this situation which may include re-assigning duties, adding additional reconciling features, or providing appropriate oversigh responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate and as resources and stagging abilities arise. The District considers this an on-going process. Repeat Finding: Yes - Prior year finding noted as 2024-002
Inadequate Segregation of Duties Actions Planned - The District has implemented a plan to mitigate this finding for federal programs by distiributing duties, and adding additional oversight. Program managers have been assigned to monitor and give oversight approval for federal fund expenses and budgets. Program managers sign off on all receipts and disbursements. A principal will act as a program manager for Title funds, and the Superintendent will act as program manager for all other federal funds. Request for reimbursement and receipting will be completed by the Business Manager with oversight by the Superintendent. The key action to eliminate inadequate segregation of duties is developing strong contols over the review and approval of adjusting journal entries. This will involve detailed review by the program manager and the Superintendent. Adjusting journal entries are discussed and signed off on each month to timely detect misstatements. Official Responsible - Business Manager and Superintendent of Schools. Planned Completion date - Discussed with School Board December 29, 2025. This is considered ongoing to to current staffing available. Disagreement with Finding - None. ISD #695 - Chisholm concurs with the finding. Plan to Monitor - The Distirct is aware of the situation and will monitor, as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year end reporting.
2024-002
FAC accepted this audit on January 20, 2025 — management decision was due July 20, 2025.
During the course of the engagement, we proposed material audit adjustments that were not identified as a result of the District's existing internal controls, and therefore could have resulted in a material misstatementof the District's financial statements. Criteria: A good system of internal accounting control contemplates an adequate system for recording and processing entries material to the financial statements. Cause: The District does not have an internal control system designed to identify all necessary adjustments. Effect: The deficiency could result in a misstatement to the financial statements that wold not be prevented or detected. Context: These entries covered both federal and nonfederal transactions. Recommendation: The District's management should develop a thorough review and reconciliation of accounts in each fund that should be performed prior to the beginning of the audit. This review should be performed at both the accounting staff and administrative levels. View of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and has hired additional business office staff and will provide additional training for UFARS reporting. Repeat Finding: No
Show full finding ▾Hide full finding ▴Material jounal entires were proposed during the audit process - Material Weakness Condition: During the course of the engagement, we proposed material audit adjustments that were not identified as a result of the District's existing internal controls, and therefore could have resulted in a material misstatementof the District's financial statements. Criteria: A good system of internal accounting control contemplates an adequate system for recording and processing entries material to the financial statements. Cause: The District does not have an internal control system designed to identify all necessary adjustments. Effect: The deficiency could result in a misstatement to the financial statements that wold not be prevented or detected. Context: These entries covered both federal and nonfederal transactions. Recommendation: The District's management should develop a thorough review and reconciliation of accounts in each fund that should be performed prior to the beginning of the audit. This review should be performed at both the accounting staff and administrative levels. View of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and has hired additional business office staff and will provide additional training for UFARS reporting. Repeat Finding: No
Material Journal Entires Were Proposed Actions Planned - The District has implemented a plan for additional internal controls to develop increased review and reconciliations prior to the beginning of the audit. The District has recently hired new business office staff and has provided additional training for UFARS reporting and compliance. Additionally, the proposed FY24 entries have been thoroughly reviewed by accounting staff and are used proactively for current review and reconciliation. Official Responsible - Business Manager and Superintendent of Schools. Planned Completion Date - December 31, 2024 Disagreement with Finiding - None - ISD #695 Chisholm concurs with the finding. Plan to Monitor - The District is aware of the situation and will monitor, as it deems appropriate. Monitoring will include monthly reiew of accounts in each fund by both the business office staff and administrative levels.
Inadequate segregation of duties within a significant account or process - significant deficiency Condition - Due to the limited number of District staff, appropriate segregation of duties is not feasible for all accounting and reporting functions. Specifiic examples include: a. The District places the authority over the year end financial reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger; and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager) b. The District has several staff that have duties involving both processing and recording transcations into the general ledger. Such duties are involved in the district's cash receipting, disbursing and payroll functions. Several employees have access to the initial processing of the information as well as subsequent recording into the general ledger. c. The District has several departments that are responsible for the collection of fees charged to students and the general public. Thr departments are responsible for the collection, processing and reporting to the business office. In most instances, one individual in each department performs those duties. Criteria: A good system of internal control requires an adequate segregation of duties so that no one individual has incompatible responsibilities. No one person should have more than one duty relating to the authorization, custody of assets, record keeping, and reconciliation functions. Cause: Generally the lack of segregation is due to the limited funding available to add additional staff to appropriately divide related duties. Effect: The lack of segregation of duties creates a control deficiency because the design/operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common cirucumstance in districts of a similar size. Recommendation: The District's management needs to be cognizant of this situation which may include re-assigning duties, adding additioinal reconciling features, or providing appropriate oversigh responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year end reporting. Repeat Finding: Yes - Prior year finding noted as 2023-001
Show full finding ▾Hide full finding ▴Inadequate segregation of duties within a significant account or process - significant deficiency Condition - Due to the limited number of District staff, appropriate segregation of duties is not feasible for all accounting and reporting functions. Specifiic examples include: a. The District places the authority over the year end financial reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger; and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager) b. The District has several staff that have duties involving both processing and recording transcations into the general ledger. Such duties are involved in the district's cash receipting, disbursing and payroll functions. Several employees have access to the initial processing of the information as well as subsequent recording into the general ledger. c. The District has several departments that are responsible for the collection of fees charged to students and the general public. Thr departments are responsible for the collection, processing and reporting to the business office. In most instances, one individual in each department performs those duties. Criteria: A good system of internal control requires an adequate segregation of duties so that no one individual has incompatible responsibilities. No one person should have more than one duty relating to the authorization, custody of assets, record keeping, and reconciliation functions. Cause: Generally the lack of segregation is due to the limited funding available to add additional staff to appropriately divide related duties. Effect: The lack of segregation of duties creates a control deficiency because the design/operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common cirucumstance in districts of a similar size. Recommendation: The District's management needs to be cognizant of this situation which may include re-assigning duties, adding additioinal reconciling features, or providing appropriate oversigh responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year end reporting. Repeat Finding: Yes - Prior year finding noted as 2023-001
Inadequate Segregation of Duties Actions Planned - The District has implemented a plan to mitigate this finding for federal programs by distiributing duties, and adding additional oversight. Program managers have been assigned to monitor and give oversight approval for federal fund expenses and budgets. Program managers sign off on all receipts and disbursements. A principal will act as a program manager for Title funds, and the Superintendent will act as program manager for all other federal funds. Request for reimbursement and receipting will be completed by the Business Manager with oversight by the Superintendent. The key action to eliminate inadequate segregation of duties is developing strong contols over the review and approval of adjusting journal entries. This will involve detailed review by the program manager and the Superintendent. Adjusting journal entries are discussed and signed off on each month to timely detect misstatements. Official Responsible - Business Manager and Superintendent of Schools. Planned Completion date - Discussed with School Board December 30, 2024. This is considered ongoing to to current staffing available. Disagreement with Finding - None. ISD #695 - Chisholm concurs with the finding. Plan to Monitor - The Distirct is aware of the situation and will monitor, as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year end reporting.
2023-001
The District failed to timely provide adequate documentation as to compliance with capital budgets in a federal program resulting in a repayment of funds expended in the previous fiscal year. Criteria: The district has an approved budget for federal programming and must obtain approval for any budget amendments in a timely manner. Certain capital expenditures require approval prior to purchasing through application and budget process. Cause: The District failed to timely request and receive a budget amendment for a federal program during the presribed time period. Effect: During the current fiscal year, the Minnesota Department of Education (MDE) required the District to repay federal funds expended in the previous year for specific capital items since the budget amendment was not timely submitted by the District. MDE subsequently reallocated those program funds back to the District and approved for District use in the current fiscal year. This was material to the District's federal funds and required material adjustments to the financial statements and a reconcilding variance to the Schedule of Expenditures of Federal Awards (SEFA). The total amount reallocated to the current fiscal year was $236,260 for this program. Recommendation: The District review all federal expenditures recorded in UFARS against the approved budgets. If modifications are required from the original application, the District should implement procedures to submit the proposed modifications to the oversight agency in a timely manner. Views of Responsible Officials and Planned Corrective Actions: The District acknowledges the instance and determined it to be an isolated instance due to staff turnover in the business office. The District has hired additional business office staff. Repeat Finding: No
Show full finding ▾Hide full finding ▴Inadequate documentation for federal expenditures Condition: The District failed to timely provide adequate documentation as to compliance with capital budgets in a federal program resulting in a repayment of funds expended in the previous fiscal year. Criteria: The district has an approved budget for federal programming and must obtain approval for any budget amendments in a timely manner. Certain capital expenditures require approval prior to purchasing through application and budget process. Cause: The District failed to timely request and receive a budget amendment for a federal program during the presribed time period. Effect: During the current fiscal year, the Minnesota Department of Education (MDE) required the District to repay federal funds expended in the previous year for specific capital items since the budget amendment was not timely submitted by the District. MDE subsequently reallocated those program funds back to the District and approved for District use in the current fiscal year. This was material to the District's federal funds and required material adjustments to the financial statements and a reconcilding variance to the Schedule of Expenditures of Federal Awards (SEFA). The total amount reallocated to the current fiscal year was $236,260 for this program. Recommendation: The District review all federal expenditures recorded in UFARS against the approved budgets. If modifications are required from the original application, the District should implement procedures to submit the proposed modifications to the oversight agency in a timely manner. Views of Responsible Officials and Planned Corrective Actions: The District acknowledges the instance and determined it to be an isolated instance due to staff turnover in the business office. The District has hired additional business office staff. Repeat Finding: No
Inadequate Documentation for Federal Expenitures Actions Planned - The District feels that this was an isolated instance due to turnover of staff and has since hired addional business office staff. However, additional controls are set related to allocation of federal programming including frequent budget versus actual reconcilation and timely compliance with any amendments or approvals required if there is deemed to be a necessary change to budget. Official responsible - Business Manager and Superintendent of Schools. Planned Completion Date - December 30, 2024 Disagreements with Finding - None - ISD 695 Chisholm concurs with the finding. Plan to Monitor - The District will monitor and reconcile federal programming budgets monthly. The Business Manager will meet with the Superintendent and/or other program managers as necessary to review budgets and expenditures to ensure compliance with the federal programs. Request for reimbursement and receipting will be completed by the Business Manager with oversight by the Superintendent.
FAC accepted this audit on January 9, 2024 — management decision was due July 9, 2024.
Due to the limited number of District staff, appropriate segreation of duties is not feasible for all accounting and reporting functions Specific examples include: (a) the District places the authority over the year end finanical reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger: and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager). (b) the District has several departments that are responsible for the collection of fees charged to students and the general public. The departments are responsible for the colletion, processing, and reporting to the business office. In most instances, one individual in each department performs these duties. Criteria: Internal controls should be in place to provided adequate segregation of duties to provide reasonable assurance of compliance with District financial accounting contols and policies. Cause: Generally the lack of segregation is due to the limited funding avaiable to add additional staff to appropriately divide related duties. Effect: The lack of segreation of duties creates a control deficiency because the design and operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misttatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statemetns that is more than inconsequential will not be prvented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common circumstance in districts of similar size. Recommendation: The District's management nees to be cognizant of this situation which may include re-assigning duties, adding additional reconciling features, or providing appropriate oversight responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate. Monitoring will include educating program managers to provide addtional oversight for the interim and year end reporting. Repeat Finding - Yes - prior year finding noted as 2022-001
Show full finding ▾Hide full finding ▴Inadequate segregation of duties within a signfiicant account or process - significant deficiency. Condition: Due to the limited number of District staff, appropriate segreation of duties is not feasible for all accounting and reporting functions Specific examples include: (a) the District places the authority over the year end finanical reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger: and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager). (b) the District has several departments that are responsible for the collection of fees charged to students and the general public. The departments are responsible for the colletion, processing, and reporting to the business office. In most instances, one individual in each department performs these duties. Criteria: Internal controls should be in place to provided adequate segregation of duties to provide reasonable assurance of compliance with District financial accounting contols and policies. Cause: Generally the lack of segregation is due to the limited funding avaiable to add additional staff to appropriately divide related duties. Effect: The lack of segreation of duties creates a control deficiency because the design and operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misttatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statemetns that is more than inconsequential will not be prvented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common circumstance in districts of similar size. Recommendation: The District's management nees to be cognizant of this situation which may include re-assigning duties, adding additional reconciling features, or providing appropriate oversight responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate. Monitoring will include educating program managers to provide addtional oversight for the interim and year end reporting. Repeat Finding - Yes - prior year finding noted as 2022-001
Actions Planned — The school district has implemented a plan to eliminate this finding for federal programs by distributing duties, and adding additional oversite. Program managers have been assigned to monitor and give oversight approval for federal fund expenses and budgets. Program managers sign off on all receipts and disbursements. A principal will act as program manager for Title funds, and the Superintendent will act as program manager for all other federal funds. Request for reimbursement and receipting will be completed by the Administrative Assistant with oversight by the Business Manager and Superintendent. The key action to eliminate inadequate segregation of duties is developing strong controls over the review and approval of adjusting journal entries. This will involve detailed review by the program manager and the Superintendent. Adjusting journal entries are discussed and signed off on each month to timely detect misstatements. Official Responsible — Business Manager and Superintendent of Schools Planned Completion Date — December 30th, 2023 Disagreement with Finding — None — ISD #695 — Chisholm concurs with the finding. Plan to Monitor — The District is aware of the situation and will monitor, as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year-end reporting.
2022-001
FAC accepted this audit on January 18, 2023 — management decision was due July 18, 2023.
Due to the limited number of District staff, appropriate segregation of duties is not feasible for all accounting and reporting functions. Specific examples include: a. The District places the authority over the year end financial reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger; and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager.) b. The District has several departments that are responsible for the collection of fees charged to students and the general public. The departments are responsible for the collection, processing and reporting to the business office. In most instances, one individual in each department performs these duties. Criteria: Internal controls should be in place to provide adequate segregation of duties to provide reasonable assurance of compliance with District financial accounting controls and policies. Cause: Generally the lack of segregation is due to the limited funding available to add additional staff to appropriately divide related duties. Effect: The lack of segregation of duties creates a control deficiency because the design and operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common circumstance in Districts of similar size. Recommendation: The District's management needs to be cognizant of this situation which may include re-assigning duties, adding additional reconciling features, or providing appropriate oversight responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year end reporting.
Show full finding ▾Hide full finding ▴2022-001 Inadequate segregation of duties within a significant account or process - Significant Deficiency Condition: Due to the limited number of District staff, appropriate segregation of duties is not feasible for all accounting and reporting functions. Specific examples include: a. The District places the authority over the year end financial reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger; and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager.) b. The District has several departments that are responsible for the collection of fees charged to students and the general public. The departments are responsible for the collection, processing and reporting to the business office. In most instances, one individual in each department performs these duties. Criteria: Internal controls should be in place to provide adequate segregation of duties to provide reasonable assurance of compliance with District financial accounting controls and policies. Cause: Generally the lack of segregation is due to the limited funding available to add additional staff to appropriately divide related duties. Effect: The lack of segregation of duties creates a control deficiency because the design and operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common circumstance in Districts of similar size. Recommendation: The District's management needs to be cognizant of this situation which may include re-assigning duties, adding additional reconciling features, or providing appropriate oversight responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year end reporting.
Actions Planned - The school district has implemented a plan to eliminate this finding for federal programs by distributing duties, and adding additional oversite. Program managers have been assigned to monitor and give oversight approval for federal fund expenses and budgets. Program managers sign off on all receipts and disbursements. A principal will act as program manager for Title funds, and the Superintendent will act as program manager for all other federal funds. Request for reimbursement and receipting will be completed by the Administrative Assistant with oversight by the Business Manager and Superintendent. The key action to eliminate inadequate segregation of duties is developing strong controls over the review and approval of adjusting journal entries. This will involve detailed review by the program manager and the Superintendent. Adjusting journal entries are discussed and signed off on each month to timely detect misstatements. Official Responsible - Business Manager and Superintendent of Schools Planned Completion Date - December 31st, 2022 Disagreement with Finding - None - ISD #695 - Chisholm concurs with the finding. Plan to Monitor - The District is aware of the situation and will monitor, as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year-end reporting.
2021-001
FAC accepted this audit on January 16, 2022 — management decision was due July 16, 2022.
Due to the limited number of District staff, appropriate segregation of duties is not feasible for all accounting and reporting functions. Specific examples include: a. The District places the authority over the year end financial reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger; and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager.) b. The District has several departments that are responsible for the collection of fees charged to students and the general public. The departments are responsible for the collection, processing and reporting to the business office. In most instances, one individual in each department performs these duties. Criteria: Internal controls should be in place to provide adequate segregation of duties to provide reasonable assurance of compliance with District financial accounting controls and policies. Cause: Generally the lack of segregation is due to the limited funding available to add additional staff to appropriately divide related duties. Effect: The lack of segregation of duties creates a control deficiency because the design and operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common circumstance in Districts of similar size. Recommendation: The District's management needs to be cognizant of this situation which may include re-assigning duties, adding additional reconciling features, or providing appropriate oversight responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year end reporting. Repeat Finding: Yes - Prior year finding noted as 2020-001
Show full finding ▾Hide full finding ▴2021-001 Inadequate segregation of duties within a significant account or process - Significant Deficiency Condition: Due to the limited number of District staff, appropriate segregation of duties is not feasible for all accounting and reporting functions. Specific examples include: a. The District places the authority over the year end financial reporting process, including all controls over procedures used to enter transaction totals into the general ledger; initiate, authorize, record, and process journal entries into the general ledger; and record recurring and nonrecurring adjustments to the financial statements with one individual (the business manager.) b. The District has several departments that are responsible for the collection of fees charged to students and the general public. The departments are responsible for the collection, processing and reporting to the business office. In most instances, one individual in each department performs these duties. Criteria: Internal controls should be in place to provide adequate segregation of duties to provide reasonable assurance of compliance with District financial accounting controls and policies. Cause: Generally the lack of segregation is due to the limited funding available to add additional staff to appropriately divide related duties. Effect: The lack of segregation of duties creates a control deficiency because the design and operation of the control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis creating a more than remote likelihood that a misstatement in the District's financial statements that is more than inconsequential will not be prevented or detected by the District's internal control. Context: The lack of segregation of duties exists within the district as a whole over all of its accounting and reporting functions. This is a common circumstance in Districts of similar size. Recommendation: The District's management needs to be cognizant of this situation which may include re-assigning duties, adding additional reconciling features, or providing appropriate oversight responsibility. Views of Responsible Officials and Planned Corrective Actions: The District is aware of the situation and will monitor as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year end reporting. Repeat Finding: Yes - Prior year finding noted as 2020-001
2021-001 INADEQUATE SEGREGATION OF DUTIES Actions Planned- The school district is not in a position to hire additional staff members for the sole purpose of eliminating the "segregation of duties" finding from our audit. The Business Manager communicates with the Superintendent of Schools regarding all major account transactions, including the recording of recurring and non-recurring journal entry adjustments. Regarding reconciliation of bank accounts, the Business Office has delegated these duties to the greatest extent possible to insure for adequate internal controls. Further, the Business Manager oversees the revenue accounts collected by individuals in other departments and does run periodic account analysis reports to help oversee these functions. Official Responsible- Business Manager and Superintendent of Schools Planned Completion Date - December 30, 2021 Disagreement With_Finding None - ISD #695 - Chisholm concurs with the finding. Plan to Monitor- The District is aware of the situation and will monitor, as it deems appropriate. Monitoring will include educating program managers to provide additional oversight for the interim and year-end reporting.
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