Audits come in twos for schools
June 25, 2008 · Updated 4:46 PM
Cost was no object for the South Whidbey Board of Education Monday night when its members voted unanimously to hire a private audit firm to look into the district's finances.
Following financial flaps that turned up a fund balance overestimated by $369,000 and an alleged embezzler in the district's business office, the board voted unanimously to hire the Seattle firm Moss-Adams for $49,000 to go over the district's books.
The price tag for the audit -- 21 percent of the district's actual fund balance -- will cover an audit of the 2002-03 ending fund balance and the 2003-04 budget. Broken down, the audit will cost $150 to $250 per hour.
The $49,000 does not include additional costs that may be incurred in the district's central office to provide data and reports to auditors.
The audit is expected to begin later this month. At the same time, the Washington State Auditor will be conducting its annual review of the district's finances for 2002-03.
On Monday night, Superintendent Martin Laster presented a proposal from the Washington State Auditor's Office of its upcoming audit, which will will include an audit of financial statements, an examination of financial accounts and transactions to determine whether the financial statements are accurate, and verification of the ending fund balance. Also included in the audit are year-end closing procedures, a review of accuracy of areas of transportation, enrollment and staff mix, an
evaluation of district's controls relating to financial reporting, and an examination of the district's process for monitoring financial reporting.
State audits run $75 per hour. The upcoming state audit is estimated to cost $19,000, a cost that is figured into the district's budget every year. The audit will being on Sept. 29.
School board director Bob Riggs questioned whether the state and Moss- Adams could work on a parallel track to perhaps save the district some money.
Several board members also expressed concern about the impact the audit will have on the workload of central office staff.
Though they could have settled for just the state audit, board members chose to pay for the additional, private audit.
But that didn't mean all the board members were happy about having multiple auditors.
"I don't like having two cooks in the kitchen," said board president Ray Gabelein, Jr.
However, a supporter of bringing in an independent auditing firm since the discover of the problem with the fund balance, Gabelein did wind up voting to pay for the Moss-Adams audit. All five board members approved hiring the audit firm.
Tom Kripayne, a Moss-Adams representative who attended Monday's meeting, presented an outline of what his firm's audit would cover.
"After meeting with several members of the board and administrators, concerns about the shortfall in the fund balance and the small embezzlement raised questions about the past practices." Kripayne said.
Kripayne assured the board that the audit would help, not hurt the district.
"Performance audits are constructive, they are not witch hunts," he said.
Kripayne said his company could complete the audit in about 10 weeks.