Auditor: Edgecombe County Schools earns unmodified opinion but audit flags reconciling errors and allotment overspend

Shannon Jensen, the district's auditor, told the Edgecombe County Board of Education that the school system received an unmodified (clean) opinion on its annual audit, but the review also identified several repeat and new findings the board needs to address.

"The school board has an unmodified opinion," Jensen said while presenting the audit. She said the general fund began the year with about $2,300,000, spent roughly $1,200,000, and closed the year with a little more than $1,000,000. Capital outlay spending was about $413,000, she said, and the district received roughly $2,800,000 in FEMA reimbursements that helped recover prior-year costs.

The auditor described a material weakness tied to timely reconciliation of bank accounts and general ledger balances. That weakness allowed a hospitalization expense to be recorded as a liability of approximately $400,000 even though the district had not paid it, Jensen said. "Reconciliations are going to catch the bulk of errors," she said, and urged timely monthly work to avoid year-end surprises.

Jensen also reported a repeated finding in which actual expenditures exceeded the board-approved budget, recommending closer monthly monitoring and adjustments. A separate, newer significant deficiency involved leave balances that remained on the books for employees who had left the district; Jensen said the district had already cleaned up those balances before the audit closed.

On state allotments for positions (classroom teachers, school administration, instructional support and CTE teachers), Jensen said the district overspent the allotment months in several categories: classroom teachers by about 24.94 months; principals and assistant principals by about 19.48 months; instructional support by 5.5 months; and CTE teachers by 1.4 months. Those overspends led to an accrual of a little over $420,000 that the district must refund to the state, Jensen said, noting the accrual is accounted for in the fund-balance numbers and is not an additional cash outlay beyond the amounts already recorded.

Jensen described a midyear change in Division of Public Instruction (DPI) practice that shifted responsibility for certain cash transfers from DPI to the district, leaving about $1,100,000 in transfers to be processed as of June 30 and creating a risk of inaccurate cash balances if not managed carefully.

She also said the audit did not identify problems with how federal awards (including ESSER funds) were spent. "We didn't identify any issues with how any funds were spent," she said.

Board members asked whether the district had the people and systems in place to fix the findings. Jensen said finance staff have been working on upgrades over the past 18 months to improve processes and that management was responsive during the audit. She also noted a separate management letter item recommending timelier invoice payments to help the finance office operate more smoothly.

The auditor's presentation was informational; board members thanked Jensen and asked follow-up questions on the findings and on next steps for corrective action. The board did not record a formal roll-call vote in the transcript on accepting the report; members expressed appreciation and indicated they would review the full audit packet and management letter.

What happens next: Jensen's findings and the management letter give the district specific areas to address through improved reconciliations, monthly budget monitoring, leave-balance cleanup and cash-transfer procedures. Board members said staff will continue to work with the district finance office and report back to the board as corrections are implemented.