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District auditor reports internal-control gaps; board approves new auditor and delays staff bonuses
Summary
Redlands Accounting & Advisory presented audit findings citing bank/AR/AP reconciliation weaknesses and prior-period adjustments related to a BEST grant; the board approved DMC Auditing & Consulting LLC as the district auditor (not-to-exceed $34,000), accepted a resignation, declared a board vacancy and certified the October pupil count; the superintendent said staff bonuses were not recommended at this time.
Lisa Hean of Redlands Accounting & Advisory briefed the board on audit work to clean up the district's 2023 and 2024 records, saying turnover in auditors and key finance positions contributed to reconciliation gaps. Hean identified internal-control weaknesses in bank reconciliations, accounts receivable and accounts payable, and noted prior-period adjustments in 2023 tied largely to expenditures and revenue timing for a BEST grant and related HVAC capital-asset accounting.
Hean said the district had a general-fund balance of about $5.7 million at the end of 2023 on roughly $17 million of expenditures (about three months of fund balance) and recommended developing written internal-control policies tied to job titles. She also flagged a due-to/due-from imbalance between the general fund and grants fund and said the 2024 reconciliations were expected to be finished in December to permit completion of the 2024 audit.
In new business, the board voted to certify the district's October 2024 pupil count for the 2024-25 year at 1,280.5 FTE. Board members then moved and approved a recommendation to hire DMC Auditing and Consulting LLC as the district auditor with a not-to-exceed amount of $34,000 to cover basic services and potential federal-audit add-ons. The board also accepted a written resignation from Director Darlene, approved a declaration of vacancy and set a deadline for interested community members to submit letters (to Jill by Nov. 21 at 4 p.m.).
Superintendent Dr. Blinko told the board they had explored whether surplus funds could pay staff bonuses in December but concluded the numbers did not support a recommendation at this time; he said January budget work could revisit the question once enrollment and revenue are reconciled. The district also contracted training and support from system experts to strengthen internal accounting procedures rather than replace the accounting system entirely.
Board motions were recorded and approved by roll call during the meeting; no litigation or penalties were discussed. The board asked staff to bring written procedures to the board for review, with a target of January for consideration or adoption.
