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Audit finds unmodified opinion for student activity funds; board debates balances, PTA oversight and use of student funds
Summary
External auditors issued an unmodified opinion on FY2025 student activity funds but reported three material weaknesses (cash receipt controls, segregation of duties, PO processing) and several control deficiencies; board members questioned large school fund balances and spending decisions, and staff outlined follow-up steps including self-audits and bookkeeper training.
Finance staff presented the FY2025 student activity fund audit (performed by Brown Edwards), telling the board the auditors issued an unmodified opinion on the presentation of cash receipts and disbursements but identified material weaknesses and control deficiencies that are common across districts.
Finance presenter said the division reached $4.7 million in cash receipts for the year, that 19 schools (59%) had zero comments, and that auditors flagged three material weaknesses: cash-receipt controls, segregation of duties and purchase-order processing (the auditors found no improprieties, the presentation said). The audit report recommended tightened PO documentation, more consistent reconciliations and monthly oversight; staff said they had already implemented positive-pay for student activity accounts and would institute monthly self-audits and further bookkeeper training.
Board members raised questions about turnover in bookkeeper positions and the drivers of high fund balances at some high schools. "Some schools have higher balances than others; we can drill down to see what is driving Cortland's $524,452.11 balance," the finance presenter said, noting school-based activities account for the revenue and that student activity funds roll over year-to-year.
Board member Phelps pressed for transparency about a reported speaker purchase at Nye River Middle School that staff said was paid from a student account. The superintendent and finance staff responded that student activity funds are school-generated and may be spent per school procedures and procurement rules; principals are expected to use internal controls and follow policy.
Questions about PTA audits and separate nonprofit fundraising arose; staff said PTAs and PTSOs are independent organizations. If a PTA is a Virginia PTA affiliate it has auditing requirements; the district can advise but not control PTA funds.
The board directed staff to continue monitoring controls, provide further reporting on large school balances and return with any recommended procedural changes.
