By Megan Wehring
DRIPPING SPRINGS — Changing personnel, short review time caused Dripping Spring ISD’s board of trustees to disapprove an audit report.
After receiving the final draft less than an hour before the Nov. 23 discussion, the DSISD trustees voted to disapprove the annual financial audit report for the fiscal year that ended on June 30, 2021.
School districts were given a deadline to file their annual financial reports with the Texas Education Agency (TEA) by Saturday, Nov. 27.
“The auditors’ delay in delivering the final report created a very compressed timeline for the district to review,” said Jennifer Edwards, executive director of communications for DSISD, “and the board to approve the report in order to make the TEA deadline, especially given the Thanksgiving holiday since district offices were closed.”
While the district acknowledges that there were significant deficiencies at the end of the 2020-21 fiscal year, DSISD disagreed with Weaver and Tidwell, L.L.P.’s findings of material weaknesses in internal controls.
“The district’s strong financial standing speaks more completely to its financial health than oversights that occurred during a period of transition,” the district’s response letter stated.
A material weakness is a deficiency, or combination of deficiencies, in internal control, where there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis, according to the American Institute of Certified Public Accountants.
Misstatements were identified by the auditors in general account balances.
“The material adjustments to individual funds included approximately $7.5 million of expenditures that should have been recorded in the Capital Projects,” the auditor’s financial statement findings stated, “and a net approximate $92,000 of revenues and expenditures in a Special Revenue Fund for textbooks received.”
The auditors detected the cause of the misstatements as accounting staff leaving the district, thus creating a delay in the financial statement close process, and errors were not detected timely as new personnel were still learning the procedures.
DSISD recognizes that the pandemic and turnover in key positions stretched the office’s remaining staff.
“Cases of COVID within the business office and community division over COVID policies put pressure on operations,” the letter stated. “The district had three different superintendents and two Chief Financial Officers during the course of the school year. The end-of-year close and audit began with the exit of two key business office staff (CFO and Director of Finance), who left the district on their own accord in the middle of the process.”
As a corrective action plan, DSISD has hired a director of finance and assistant superintendent for finance and operations, while also engaging a certified public accountant (CPA) with school district experience to help with the process.
District administration will come back to the board with proposals for review of the audit at a later date; a date for the follow-up has not been confirmed. It could be after the new year, Edwards said.
“The team is working through that in order to meet the requirement as soon as possible,” Edwards said. “It is not on the agenda for the December meeting so I think January would be the earliest presentation but that is not confirmed.”
To view the current audit report and full corrective action plan, please visit the district’s website.
