Suffolk board hears Cherry Bekaert audit overview as members debate deeper "forensic" review

Good evening. At an April 10 work session, the Suffolk City School Board heard an overview from Cherry Bekaert auditors about how the school division’s financial statements are audited and debated whether to order a deeper, targeted review after years of public questions about spending.

Cherry Bekaert engagement partner Laura Harden told the board the schools’ audit is performed as part of the City of Suffolk’s annual comprehensive financial report and under generally accepted auditing standards issued by the American Institute of Certified Public Accountants. “There is not a separately issued audit opinion for Suffolk Schools, as there's not a separate financial statement,” Harden said, and she described a risk‑based process that begins with understanding internal controls, follows testing of payroll and disbursements, and reconciles state and federal program reports. “We can't test 100% of the transactions,” she said. “We do make fraud inquiries ... but we are not out looking specifically for fraud.”

Why it matters

Board members and several public speakers said distrust about how tax dollars are spent has persisted in the community and asked whether the standard audit is sufficient. The board discussed options that go beyond the standard financial statement audit — for example, agreed‑upon procedures to test specific transaction samples, an internal‑controls review, or a forensic engagement targeted at possible wrongdoing or systemic weaknesses. Harden said Cherry Bekaert can perform those alternative engagements but they are outside the scope of the routine financial statement audit.

What auditors told the board

Harden said the firm follows the Virginia Auditor of Public Accounts specifications for local government audits and tests items such as VRS (Virginia Retirement System) reporting, procurement compliance, conflict‑of‑interest filings and reconciliations to state funding reports. On federal funds she described the single‑audit approach used when federal expenditures exceed the federal threshold (currently discussed as $750,000), and said last year Cherry Bekaert tested special education and the Education Stabilization Fund as major programs. She summarized the audit calendar: planning in May, single‑audit testing and state compliance work through the summer, substantive testing in the fall after the annual school report, and reporting in November.

Board concerns, proposals and staff direction

Board members asked several practical questions: how likely is a standard audit to detect fraud (Harden said it is unlikely unless it is material or is uncovered during targeted testing or inquiries), what types of engagements would meet the board’s stated goals, and how much a deeper review might cost. City and school staff told the board the annual financial audit engagement for the division and school activity funds runs about $75,000. Board member Sean McGee said the board had collectively submitted 35 specific items and asked Cherry Bekaert to return in writing with whether each item is already covered by the standard audit; Harden agreed to provide a yes/no mapping and to consult her advisory team on which type of engagement would be appropriate for each item.

Several board members and the finance committee chair, Board member Riddick, pressed for a path that balances transparency with cost: Riddick proposed a town hall so citizens could state concerns directly, noted earlier local investigations had not substantiated allegations he had seen, and asked staff to draft an RFP only after the board narrows the scope. McGee and other members said they want written answers to the 35 points before authorizing an RFP or spending on a separate engagement. During the discussion a $300,000 figure was cited in public remarks as a possible ceiling for a wide‑scope engagement; Harden said precise pricing depends entirely on the chosen scope and the percent of transactions or sample sizes to be tested.

Actions the board took or directed

• Cherry Bekaert agreed to provide a written, item‑by‑item yes/no response indicating whether each of the board’s 35 submitted items is addressed in the current annual audit procedures and, where relevant, which audit test or paper would cover that item.

• The board agreed to delay any procurement (RFP) for an expanded engagement until it has Harden’s mapping and a clearer scope. Several board members asked staff to draft an RFP template and timeline after that mapping is received.

• Board member Riddick asked for a community town hall to gather citizen concerns; the chair proposed scheduling discussion of a town hall and next steps at the May 7 work session.

Votes at a glance (formal votes recorded at the April 10 meeting)

- Motion to go into closed session (to discuss student records under Va. Code §2.2‑3711): moved by Board member Jenkins; seconded by Vice Chair McGee. Vote: unanimously approved (7‑0). (Referenced in transcript: motion and roll call beginning at the business meeting portion.)

- Motion to certify the closed session: moved by Board member Riddick; seconded by Board member Brittingham. Vote: unanimously approved (7‑0).

- Motion to uphold discipline for student record review 2424/25‑10RR: moved by Board member Brittingham; seconded by Board member Slingluff. Vote: approved (7‑0).

- Motion to remove discipline from the record for student review 2424/25‑12RR: moved by Board member Breedingham; seconded by Board member Slingluff. Vote: approved (7‑0).

- Motion to approve bills and payroll (moved as a business‑meeting item): moved by Board member (mover recorded in minutes); seconded by Board member Jenkins. Vote: approved 5‑2 (Board members Brittingham and Slinglove voted No; other members voted Yes).

(Full vote records are in the meeting minutes. These outcomes were recorded during the business portion of the April 10 meeting.)

What remains unresolved

Board members did not authorize a specific expanded engagement on April 10. They asked for a written checklist from Cherry Bekaert that shows which of the 35 items are already handled by standard audit procedures and which would require a separate engagement; that list will inform whether the board pursues agreed‑upon procedures, an internal‑controls review, or a forensic investigation. The timeline for any additional work and a projected cost estimate will follow the scope decision.

Quotes (selected)

“We do perform our audit under generally accepted auditing standards that are issued by the American Institute of Certified Public Accountants,” — Laura Harden, Cherry Bekaert engagement partner.

“We can't test 100% of the transactions,” — Laura Harden.

“We have not identified anything,” — Laura Harden, responding to whether the firm had found matters that required an expanded investigation in prior years.

“We're talking about something that could cost well over $300,000,” — Board member Riddick, noting possible expense ranges discussed publicly.

Ending

The board left open the option for a deeper review while directing staff and Cherry Bekaert to clarify what the standard audit already covers. The next steps agreed by board members are (1) Cherry Bekaert’s written mapping of the board’s 35 questions to current audit procedures, (2) board review of that mapping and a decision on scope, and (3) a possible RFP or community forum in May if the board elects to pursue an expanded engagement.