Internal audit flags 12 high-risk areas; Medicaid billing and treasurer's report prompt trustee scrutiny

Mount Vernon — Internal auditors presented the district’s 2024–25 risk assessment and told the board the audit identified 12 high-risk areas, 51 moderate and 29 low among 92 business processes reviewed.

"We broke down the results into a high, moderate, and low ranking, where we had 12 high risk areas, 51 moderate, and 29 low," auditor Darren Achebele said during the Nov. 25 presentation.

Medicaid billing findings: Trustees focused questions on Medicaid billing and documentation. The auditors said their PPS testing found three recommendations related to Medicaid and cited a small sample in which services exceeded the IEP frequency and 11 instances where parental consent forms for Medicaid-reimbursable services were signed after services had already started.

A district specialist explained: "A parental consent form is required to be signed by the parent prior to services being provided. So any of those services that were provided prior to the parent signing the parental consent form are no longer Medicaid eligible for reimbursement." Auditors recommended early collection of parental consents (for example, in June for services in September) and implementing checklists and dedicated staffing to maintain IEP documentation.

Treasurer’s report: Acting treasurer Dr. Joseph presented September and October snapshots showing the general fund beginning balances (about $45.8 million in September), special aid and capital balances, and monthly receipts and disbursements. Trustees asked for a breakdown of transfers (approximately $10.9M in September and $8.4M in October), outstanding check aging and the appropriation report. Because the board had received the audit materials only the prior day and asked for time to vet the details, it voted to table the treasurer's report for further review.

Why it matters: Auditors linked fiscal control weaknesses — especially in budget monitoring, fund balance management, grants oversight, fixed assets and cybersecurity incident response planning — to ongoing fiscal stress. Trustees pressed for concrete corrective actions and documentation to enable Medicaid reimbursements and to strengthen control continuity despite staff turnover.

What's next: Auditors said the district must produce a corrective action plan addressing seven recommendations from the risk assessment and file it with the State Education Department by April. Trustees asked for more detailed affidavits and reports on transfers, outstanding checks with aging, and disaggregated payroll versus overtime figures to better understand trends and fiscal positions.

Direct quotations in this article are taken from the board meeting transcript and attributed to the speakers who made them.