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Auditors give SFUSD a clean opinion; district reserves and internal controls show improvement
Summary
Auditors presented a clean opinion for the district’s 06/2007 financial statements, reported a roughly $8 million reduction in the self-insurance deficit and an increase in reserves to about 3.2%; two findings were noted (late vendor invoices and attendance-policy inconsistencies).
Auditors reported to the San Francisco Board of Education that the district’s 06/2007 audit received a clean opinion and that financial trends showed measurable improvement. Tom Brewer, a partner at auditing firm VTD, told the board the district’s fund financial statements closely matched the unaudited actuals with minimal adjustments and no internal-control deficiencies for the general, restricted, or unrestricted funds.
Brewer highlighted a reduction in the self-insurance-fund deficit of about $8,000,000 and said the district’s reserves improved to roughly 3.2 percent — a marked change from figures the auditor described as “about $2.6 million” moving to “about $16 million.” He cautioned that while the percentage improved, the district still faced fiscal pressures given declining enrollment and that reserves remained modest in absolute dollars.
The auditor identified two findings this year: (1) timing issues tied to vendors submitting invoices late, prompting recommendations to improve invoice forecasting and processes; and (2) inconsistent enforcement of attendance policies at some sites, which could affect average daily attendance (ADA) revenue. The audit team recommended targeted training and oversight for attendance clerks and said it would work with district staff to identify repeat-finding schools.
Board members thanked staff and auditors for the work. Commissioner Winssey praised the staff’s efforts and noted the importance of addressing long-standing business-practice issues. Commissioners asked whether attendance-tracking improvements could both boost academic outcomes and recover revenue; auditors said they saw mixed directions in the data and offered to analyze target schools further.
Brewer also warned of upcoming changes in auditing standards that will require more extensive examination of systems — likening the change to similar scrutiny under Sarbanes-Oxley for public companies — and said the district should prepare to meet the new standards.
Next steps: Auditors and district staff plan follow-up work to analyze enrollment-versus-attendance anomalies, strengthen internal controls where needed, and implement recommended training and oversight.
