An audit conducted by the Office of the State Comptroller revealed Greenport school’s former treasurer did not prepare accurate bank reconciliations in a timely manner.
The district’s treasurer failed to prepare 26 of 43 months of bank reconciliations in the necessary 30-day time frame and did not ensure that recorded balance for the district’s general fund bank account was accurately reflected for the 2016-17 and 2017-18 academic year, the audit states. The audit did not show any misuse of funds.
The school was audited from July 1, 2015 to Jan. 31, 2019 to determine if 43 monthly bank reconciliations, which ensures that money leaving district’s accounts each month match actual money spent, were accurate. The report was released to the public Oct. 11.
The audit found that 17 reconciliations for the district’s general fund were prepared in a timely manner while 26 reconciliations were prepared late, some of which were inaccurate.
During the audit period, four people served as the treasurer and from July 9 to Sept. 5, 2016, the position was vacant. Consequently, the audit states, transactions prepared were “unreliable” and the balance for the general fund did not accurately reflect the actual balance in the account, the report states.
Superintendent David Gamberg said in an email Thursday that “turnover and inexperience in the position were the main contributing factors in not preparing the bank reconciliations” in a timely manner. He noted that the entire business office staff turned over in 2016.
In over half of the monthly documents audited, there were unreconciled differences in payment — ranging from $13 to as much as nearly $3.4 million in several unrecorded transactions in April 2017, which included deposits, transfers between funds and payments for debt service and employee health insurance.
Often, appropriate accounting adjustments were not made until the end of the fiscal year — if at all, the report states.
“By not reconciling the bank balances with the balances recorded in accounting records in an accurate and timely manner, the Board [of Education] and officials have limited assurance that they are making decisions based on the district’s actual cash position,” the audit states.
Mr. Gamberg said the district takes the findings “seriously,” and district representatives have already begun to tackle the problem.
“Their findings were not new to us and we have been working diligently to post journal entries and prepare bank reconciliations timely,” he said.
The audit also found the district’s assistant superintendent of business, Charles Scheid, did not review bank reconciliations before they were included in the district’s monthly treasurer’s report, available on most monthly board agendas.
The audit states that the current treasurer, Mindy Doroski, is reviewing past bank reconciliations and is working to make appropriate adjustments. Mr. Scheid told the comptroller’s office that moving forward he will review and sign-off on bank reconciliations.
Mr. Gamberg said the district’s treasurer performs other job duties in addition to bank reconciliations. When they are learning a new job, he said, their primary focus is on major areas such as making sure staff and taxes are paid and federal/state payroll and retirement reports are prepared.
“With a busy office and a small business office staff, losing just one person causes difficulty,” he said. “Adjusting entries are only done when the item is thoroughly investigated and supported. In addition, the adjusting entry is never back dated in the accounting system, but is always done in the month the support is obtained.”
Since October 2018, bank reconciliations have been prepared and reviewed timely, Mr. Gamberg said. Currently, he said, there are no outstanding reconciling items.
In a letter of receipt to the State Comptroller, Mr. Gamberg said the district “remains committed to being responsible and compliant stewards of the District’s assets.”
The letter states that district officials plan to file a corrective action plan to address the concerns of the examination, a recommendation of the audit.