By Madelynn Coldiron
School board members who want to be diligent in the financial oversight of their district got two messages during a clinic on the topic at KSBA’s annual conference:
Don’t settle for financial reports that are difficult to follow.
David Baird, the association’s associate executive director, encouraged board members in the large clinic crowd to work with the superintendent and finance officer when they have questions and concerns.
“Unless you have the proper relationship between the superintendent and the finance officer,” he said, it is difficult to watch every penny.
PHOTO: Conference attendees waited to ask presenter David Baird, KSBA's associate executive director, additional qustions following his clinic session on financial oversight.
Baird reviewed the more than 30 findings in the detailed investigations by the state auditor’s office that turned up problems in several school districts. The issues most commonly fell under the areas of board oversight, administrative controls and board policies and procedures.
Baird urged boards not to wait until an audit turns up deficiencies to address these areas.
“The best time to put in safeguards and best practices is when you don’t have a problem. When you’re in crisis is not a good time to put in safeguards and checks and balances,” he said. “There’s nothing wrong with saying, ‘I just need to know. I just need to ask some questions. I’m not accusing anyone. I don’t think we’ve got a problem. But I do need to know because I am in charge of budgets, I am in charge of finance, I am in charge of oversight of these things.’ (This is) not micromanaging … but you need to have the questions you have answered.”
Boards also can ask the certified public accounting firm that does their district’s annual audit to provide more specific detail. KSBA recommends the district get a deeper audit every three years, Baird said. Steve Smith, KSBA’s chief financial officer, suggested requesting special procedures focusing on the system of internal controls – accounting-speak for financial checks and balances -- especially if the district does not have its own internal control department.
Larry Roach, president and CEO of PSST, LLC, which provides software and services to Kentucky school districts, reviewed the basic types of reports available from MUNIS, the school district financial information system. Some reports are more detailed than others, but there are other sources of financial information on which boards can draw, he said.
Roach said these include other reports prepared by the district finance officer “in ways that are easy for you to understand,” the Open House database on the Kentucky Department of Education’s website, third parties like his company, and KSBA’s eMeeting Service.
PSST’s clients include a 100-school district consortium whose members pay an annual fee for different versions of reports derived from the MUNIS system. More customized reports also can be purchased.
In a post-clinic interview, Roach explained that many finance officers don’t have the time or technological resources to produce these reports. Typically, his company gets requests from districts for the MUNIS information in simpler, easier to understand formats.
“You get those standard reports and for a lot of people they’re not user friendly because there’s a lot of data and white space and they’re not easy to read,” he said. “We take and put that in a format so board members can understand what they’re looking at.”
More recently, the company has been getting requests for alternatives to hard-copy reports in the form of interactive online financial information, complete with graphs, in which data can be teased out and compared in various ways.