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Audit: Knox County internal school funds hold $16.8 million; auditors find 12 compliance exceptions, two new issues
Summary
External auditors reported more than $16.8 million held in school‑level internal funds, total revenues of about $25.2 million and 12 audit findings, including two new items: unauthorized credit‑card charges and supplemental salary payments.
An external auditor told the Knox County Board of Education on Jan. 9 that the annual audit of internal school funds found $16.8 million in cash at school accounts and 12 compliance findings, though the firm reported an overall improvement in the number of exceptions compared with last year.
Mr. Ted Hodes of Pew CPAs presented the 413‑page audit and said the firm would add a corrective action plan that mirrors schools’ management responses. “Total cash held in the internal school funds… was $16,800,000,” Hodes said. He said total revenues were about $25,200,000 and total expenses about $23,400,000.
The nut graf: The audit covers only school‑level internal funds (student activities, clubs and school accounts) rather than central office finances; it found control and compliance exceptions but showed fewer issues than the prior year in several categories.
Hodes said the audit lists 12 findings, many tied to internal controls and deviations from the Tennessee state manual for internal school funds. From the prior year’s 12 findings, two were fully resolved; six had fewer instances; two were about the same; and two had more instances. He summarized the recurring categories as segregation of duties, negative fund balances, disbursement exceptions, purchase‑order/receipt exceptions, ticket reconciliation, fundraising and resale activities, school support organization issues, approval of transfers and travel‑policy exceptions.
Hodes identified two new items in this year’s report: unauthorized credit‑card charges and supplemental salary payments. Each finding in the report includes the regulatory criteria, condition, cause and effect, auditors’ recommendations and a management response from schools; the corrective action plan will expand those management responses.
Board members had no substantive questions for the auditor during the presentation. The district said the internal school funds team is cooperating with auditors and that district staff will follow up with corrective actions at the school level.
Ending: The audit will be posted with a corrective action plan; auditors and district staff said they will continue work to reduce exceptions in future audits.
