KSBA helping districts address state auditor’s concerns
By Madelynn Coldiron
Kentucky school board members will get some extra guidance in KSBA training to address issues highlighted in a series of school district audits by the state auditor’s office.
“Oversight is the big problem,” said David Baird, KSBA’s associate executive director, who teaches some of the finance training. “And this is almost an exact quote from the auditor, in every audit report of some wrongdoing, the first blame went to the lack of oversight on the part of the board.”
PHOTO: KSBA Associate Executive Director David Baird answers questions during a training session about financial oversight during KSBA’s Winter Symposium.
The association has analyzed the findings and recommendations in the auditor’s reports from several school districts. That material is being incorporated into course offerings in KSBA’s Academy of Studies. Portions were included in several different school finance courses that were offered at the recent KSBA Winter Symposium and more is planned along the lines of a course in best practices in financial management, Baird said.
The analysis and recommendations fall under the general categories of board oversight, administrative controls and board policies and procedures. Within those categories are issues ranging from approval of superintendent expenses and superintendent “rollover” contracts to district finance office controls and review of credit card transactions.
In addition to the training to address the state auditor’s concerns, KSBA is talking with a software company that offers programs that can produce supplemental reports from the school district finance system, known as MUNIS. Baird said the association expects to be able to recommend the types of reports boards should be requesting from the district finance office.
“Right now, it’s just a hodgepodge” of reports, he said.
The state auditor’s findings often turned up items that were not reflected in the annual audits that districts must get from certified public accountants. The association hopes to work with the Kentucky Department of Education in re-examining the department’s requirements for what is covered by those audits.
“We probably also need to include some kind of training in how to read an audit report,” Baird said.
Baird and Laurel County Schools facilities director Jim Kennedy covered some of the audit material in separate finance workshops they taught during the KSBA Winter Symposium, at times noting the fine line between oversight and micromanagement.
Kennedy called it a balancing act – boards can’t micromanage, he said, “but when something goes wrong, you guys get blamed.”
Oversight, Baird said, “means you can ask any questions you need to ask in order for you to do your particular job. And that you hold the superintendent responsible for doing their job and they hold people underneath them responsible for doing their job.”
Kennedy discussed ways boards might opt to regularly review the expenses of their superintendent, including having a member review them on behalf of the board or forming a finance committee. Boards can request separate financial reports detailing only those expenses and should pay close attention to credit card charges, Baird said.
Kennedy noted that in many instances in which the auditor questioned the use of a district credit card, the purchase was for a legitimate school district purpose, but lacked documentation reflecting that.
Baird also cautioned school districts against making light of investigations by the legislature’s Office of Education Accountability, which passes along information to other agencies, such as the auditor’s office.
“Almost every time the state auditor went to a district it was because OEA had investigated something in the district previously,” he said. “So my point is if you have an OEA investigation in your district don’t slough it off; take it very seriously and make sure you provide an answer back to them that is serious and try to be cooperative with them.”