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School board hopes for improved audit

WINSTED — The school district is on target to complete its financial audit for fiscal 2010-11 by Tuesday, Jan. 31, according to Superintendent of Schools Thomas Danehy.Danehy spoke about the status of the audit at the Board of Education’s Budget and Finance Committee meeting on Thursday, Jan. 5.Members of the board expressed their concerns to Danehy and said they did not want to see a repeat of what happened with the fiscal 2009-10 audit.With that audit, the town had to file 11 extensions with the state in order for the school district to complete work on it.At a Board of Selectmen’s meeting in December, Town Auditor Vanessa Rossitto said the extensions were mostly due to the school district having serious problems with its accounting practices.Rossitto criticized the school district for its use of journal entries.She told the selectmen that journal entries are usually used as a temporary measure to reconcile transactions and adjust balances.Rossitto added that one of the major issues in the fiscal 2009-10 audit is that it showed $636,000 in expenditures that were not properly documented by the school district.At a subsequent Board of Education meeting, Danehy said the district properly spent the $636,000 in funds.Danehy said the funds in question were part of $1.1 million in American Recovery and Reinvestment Act (ARRA) funds which were partially spent on salary payments to employees.At the Budget and Finance Committee meeting, Board Member Joseph Hanecak asked Danehy if the school district is encountering the same difficulties in completing the fiscal 2010-11 audit as it did for the previous fiscal year.In response, Danehy said the school district made substantially fewer journal entries in fiscal 2010-11 than in fiscal 2009-10.“Last fiscal year the school district made 58 journal entries; the previous fiscal year the district made 258 journal entries,” Danehy said. “Also, we don’t request extensions. The town does. The town requested an extension with the state for December, which brings us to Jan. 31. Yes, things change and I don’t know to the full extent to which they change. But we’re in a good spot to complete the audit in time.”Danehy said the town would probably not get any further extensions with the state in completing the fiscal 2010-11 audit.School district Business Manager Nadine Savage said the real issue with the journal entries in the fiscal 2009-10 audit was not the frequency of them, but the lack of documentation of who approved them.“There were some written statements [in fiscal 2009-10] that journal entries were used but they were not signed off by anyone,” Savage said. “They were not signed off by the business manager or the superintendent. Yet, in many of these instances, those were the ones who directed that the journal entries be made. Yes, journal entries were made in the last fiscal year, but not to the same extent as the previous year.”Hanecak asked Savage if the state would disapprove of the journal entries made in the fiscal 2010-11 audit.“I don’t think so,” Savage said. “We can’t change the past, but going forward we can change the methods being used.”Savage said that, since the the results of the fiscal 2009-10 audit have come out, she has put restrictions on journal entries.“No one is allowed to make journal entries unless it is signed off by valid personnel,” Savage said.Later in the meeting, Danehy presented a corrective action plan that was filed with the state in response to the fiscal 2009-10 audit.The plan, which is over 200 pages long, was filed at the request of Richard LeMay, supervising accounts manager of the Department of Education.

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