Board of Education Liaison Meeting -4/21/2021 Special Session
By Michael Suntag
Report on the results of the CLA audit (Clifton Larson Allen LLP). Note: audit was originally awarded to Bloom Shapiro, who merged with CLA this year. Jeff Sitwell principal of CLA presented the results of the audit to a special meeting of the Board of Education on April 21st , 2021:
Financial analysis – report has been circulated
Highlights – The study encompasses the years 2017-18, 2018-19,2019-20.
Binding gaps and recommendations:
Sitwell emphasized that there is a now a new leadership structure at the Board of Education (BOE) now – (The prior COO would allow accounts to run into deficit as long as overall budget was not in deficit. It is not allowed any more) – this may have occurred this way in the past and often not identified till the end of the school year ALEO (automated financial system) was configured to allow deficit spending, but this practice is not allowed now – the one exception being payroll – deficit still needs to be met for obvious reasons and then transfer funds after.
Budget transfers in excess of $7,500 needs to go to board for approval (audit found some inconsistences in prior years). Budget transfer control for anything above $7500 needs to be brought to board for approval –minutes did not confirm these transfers, and found significant inconsistencies.
Now the budget processes are paper intensive – the suggestion was to use ALEO to make it more reflective and transparent. Sitwell said that Stratford does a relatively good job of it – most expenditures are encumbered – and the recommendation is to encumber expenditures as soon as possible – out placements are always problematical for speed. And often dollars need to be found at the last moment. CLA suggestion was to encumber up front as much as possible for changeable outpatient dollars.
Purchase order process (PO) – there were instances where purchase orders are not followed to the tee. Purchases are received without the purchase order attached. All users who us PO’s – must be submitted as soon as possible. According to Sitwell, no one has a right to financially commit the district without prior approval and that happens through an approved PO. Money needs to be encumbered so that dollars can be set aside.
This is a cultural shift since it was allowed in the past. Sitwell said that the BOE needs to change the culture, including additional training of administrators’ to put in PO’s. Application security -password security is not where it should be – need to enhance security in financial and other key areas – passwords are not changed regularly and there is a standard out there to consider this higher level of security for financials. New password expirations and security are now in place,
Review of grant management procedures – nothing is formalized and documented for the protocols and controls need to follow.
Town Councilman Bill O’Brien wants another special meeting for questions rather than half an hour. “Are we processing the correct purchase order for the selection of contractors.” CLA did not evaluate whether purchases were from the proper vendor or cheaper vendor.”
The meeting was recessed and reconvene again at another special meeting