Audit committee: school activity fund statements 'fairly stated' but procedural errors found at Green Run and Cox

The Virginia Beach City Public Schools Audit Committee heard on Thursday that four school activity fund audits concluded the schools' financial statements were "fairly stated," though auditors flagged procedural lapses at two schools.

Auditor Karen told the committee the follow-up audits at Green Run High School, Cox High School and Renaissance Academy, plus a change-in-principal review, found the financial statements for each school "fairly stated" and that the detailed financial statements appear in the appendix of each report. "Our conclusion for all 4 audits is that the financial statement for each school was fairly stated," Karen said.

The report singled out one exception at Green Run High School involving the coffee shop. Karen said staff "were not accurately recording the daily sales," which led to an above-expected balance in the change fund. She emphasized the problem was a recording error, not fraud: "It's not fraud ... they were not accurately recording the daily sales," Karen said, and recommended daily reconciliations so the change fund remains at the intended level.

At Cox High School auditors identified two cash-disbursement exceptions: a payment issued based on an email request without a supporting invoice and a second disbursement charged to an incorrect account, plus one late deposit. Karen said the email-driven payment related to athletic-trainer services and occurred amid a principal transition: "The student activity coordinator sent an email to the bookkeeper saying we need to pay the vendor. And instead of waiting for the invoice ... the bookkeeper got the check." She said the team would expand sampling if a pattern emerged.

Renaissance Academy showed full improvement from the prior audit and yielded no current exceptions. The change-in-principal review (which isolates transactions for outgoing versus incoming principals/bookkeepers) found one miscoded procurement among 13 sampled transactions; auditors said they would expand testing only if they saw a trend.

Committee members pressed auditors on when an isolated error prompts more work. Karen said the team expands samples "if we saw a pattern of continual problem." Chair David Culpepper thanked audit staff for following up on prior recommendations.

The committee requested samples and follow-up where appropriate; the auditor said management will provide implementation dates so follow-up testing can be scheduled. The committee did not vote on any policy changes during this discussion.