District auditors report control weaknesses; staff outline corrective actions

The school district's external auditors returned mixed results in the fiscal 2024 single audit, presenting findings tied to controls over federally funded procurements, accounting approvals and documentation of prevailing-wage reviews. District finance leaders told the board they have implemented or are implementing corrective actions.

Auditors from CliftonLarsonAllen (CLA) reported a material weakness and other findings in the single-audit portion of the fiscal-year review, which examines federal grant compliance and internal controls. Chief Operating Officer Jeff Proulx and finance staff said the findings did not show misuse of funds in the tested samples but identified missing control documentation and areas where processes needed tightening.

Key findings and staff responses included:

- Suspension and debarment: CLA found the district had not consistently checked the federal suspension and debarment listings (the SAM.gov registry) for some vendors paid with federal funds in the audited period. The district said it has added checks for restricted funds and requires either a SAM.gov clearance or an attestation from the vendor before a purchase order is issued. Staff described the issue as partially tied to timing and to differences in guidance between the prior audit firm and the current firm.

- Journal-entry approvals: Auditors reported that some manual journal entries lacked an approval workflow. Finance staff said a formal approval process for journal entries went into effect in early November and now requires a second team member to approve manual entries before they post.

- Davis-Bacon prevailing-wage documentation: For federally funded construction projects subject to the Davis-Bacon Act, auditors said the district had collected certified payroll files from contractors but did not consistently retain evidence of timely internal review. Staff said they will centralize a tracking spreadsheet and require sign-offs showing dates and reviewers for each payroll file.

Finance leaders stressed the audit's practical results: auditors sampled multiple items across projects and found no instances in those samples of vendors paying less than required prevailing wages or of vendors being suspended or debarred. The findings focused on controls and documentation rather than identified fraud or mispayment.

"Of all the stuff they tested, the samples they've tested 40 samples for each of the projects and they found no actual issues," a finance representative said. The district said CLA will return next year and, because of the material weaknesses identified, will test more samples and monitor the corrective-action progress.

Board members asked how the new checks will be enforced in the financial system; staff said they will tag vendors in the ERP once cleared and will attach documentation to requisitions and purchase orders for restricted funds. Staff told the board they expect the corrective steps to prevent repeat findings in the next audit cycle.