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Audit flags payroll control lapses in school nutrition; district projects corrective steps
Summary
External auditors identified payroll documentation exceptions in the district’s School Nutrition program; district staff described the tested errors as $3,293 in sample exceptions and outlined corrective steps to restore controls and notify state authorities.
External auditors reviewing Forsyth County Schools’ 2024 financials identified payroll documentation issues in the School Nutrition program, district finance staff told the board April 15.
Larry Hammel, presenting the March financials, said auditors from Mauldin & Jenkins tested federal programs and selected School Nutrition as a large Type A program for single‑audit testing. The audit identified two exceptions in payroll documentation during sampling — one payroll payment to an employee who was no longer employed and one timesheet missing a supervisor signature — that together totaled $3,293. District staff advised the board that the auditors used statistical projection from that sample and estimated a projected (extrapolated) potential unallowable cost of about $40,000 when scaled to the full population tested. That extrapolation placed the district on the state’s "moderate risk" list for a year.
During the meeting, Derek Hershey clarified the district’s view of the finding: "The actual finding was about $3,200. It wasn't 40,000. That's just what their extrapolated amount potentially could be." Hammel and Hershey said the district must notify the state and that the board must be informed within one month of the audit finding.
Hershey and Todd McClellan (Finance/Audit staff) described corrective actions already in progress: principals (or a designated designee) will be the sole responsible party at each school for submitting personnel action documents for food‑service hires and separations; food‑service employees will be added to principals' staff‑allotment reports so positions are visible in position control; managers and assistant managers will be required to verify employee timesheet signatures and the School Nutrition department will add a secondary verification layer. Hershey said those steps are intended to close the two control gaps that led to the sampled exceptions.
Hammel said the district will present the formal response letter to the state and to the auditors and pursue corrective action; if the finding is resolved in next year’s audit, the district will be removed from the moderate‑risk list.
Board members asked procedural questions; one member summarized the situation as an uncommon but manageable lapse in internal control for an enterprise of the district’s size.
No disciplinary or other personnel actions were announced publicly at the meeting. The board received the audit presentation and the district reported that it will send required documentation and corrective steps to the state audit authorities.
