An audit of the Coal City School District’s financial records has been completed and the auditor has once again given the district high marks, issuing a clean opinion of the financial statements.
"This is the highest level of opinion of the financial statements that we can issue," said Cate Moulton, a certified public accountant with Mack & Associates.
The annual financial audit, conducted in July, takes a comprehensive look at the district's financial statements for fiscal year 2023 that ended on June 30.
The audit results were presented to the Board of Education on Sept. 6. The review took a look at each major fund and governmental activities, as well as consisted of a single audit of the federal Individuals with Disabilities Education Act [IDEA] funds received by the district.
As with the traditional audit, the firm had no findings on the single audit.
According to Moulton, at the close of the fiscal year, the district's total assets-cash, investments and capital assets net accumulated depreciation -was at $81,038.304.
Total liabilities were $23,320,642, a figure that included some payroll withholdings and tax liabilities paid in July, as well as the long-term debt of the district.
The net position of the district increased by $4.2 million to $57,717,662.
In her presentation, Moulton said total revenues for the year were $41.3 million an increase from $40.5 million the prior year.
"A large portion of this increase is due to changes in grants that were received in the current year and the replacement taxes have been up, " she said.
Expenditures were up from $35.9 million in fiscal year 2022 to $38.1 million in fiscal year 20023.
The auditor reports there was an increase in the instructional and support expenditures, but overall the net fund balance increased by $3.2 million which brought the ending fund balance up from $23.1 million to $26.4 million.
"So overall the district has a very strong financial position, healthy cash and investment balances," Moulton said.
When it comes to capital assets there was a $1.24 million increase due to improvements in facilities, buildings and equipment purchases.
"The accumulated depreciation which was the normal depreciation expense for the year increased $2.5 million, so the net change in capital assets from 2022 to 2023 was a net decrease of $1.3 million, which is due to the fact we had more depreciation than capital asset increases," Moulton explained.
In terms of debt, the auditor noted there was an increase that resulted from a new capital lease entered into during fiscal year 2022. The debt, she said, increased by $2.4 million bringing the district's total debt as of June 30 to $22, 232,808.
A breakdown of the district's debt payments for the year is included in the audit, as is a breakdown of the payment schedule for future years. The audit is available for public viewing on the district's website.
Board vice president Shawn Hamilton made note this includes when each issuance was made, the amounts received, rates and repayment schedule.
"There are a ton of details in the audit report if you are interested in looking at it further," Moulton added.
In presenting the report, Moulton did offer a couple of comments on items it wanted to bring to the Board of Education's attention.
"None of these rose to the level of material weakness or significant deficiency, but a note to make you aware of what we are seeing when we are looking at the audit," she said.
The first item focused on an inadequate segregation of duties, because the district's chief school business official [CSBO] is responsible for signing all of the checks, reviewing ledger reports and preparing bank reconciliations.
Moulton said the district does have mitigating controls over this process because the bank reconciliations and statements are made available for review by the Board of Education thus mitigating any risk, and the fact the district participates in Positive Pay, a program that tells the bank what checks have been written, to whom and the amounts. The bank does not cash the checks unless they match the report provided by the district.
"We do have a situation with one person who is doing a lot of different accounting functions, but having oversight and review from the Board provides a level of control that can kind of mitigate that," said Moulton, who noted this is something they see normally with smaller entities with a limited staff.
"Although we have controls that are in place that are mitigating this, it has shown up on the last several audits and we felt now is the time to take action to satisfy that," CSBO Jason Smith said, noting the district has brought on an additional member to the finance staff that will add another level of control.
The auditor also pointed out the audit showed expenditures in the debt service fund exceeded appropriations by $475.
"It's minuscule and nothing to be alarmed about, but wanted to bring to your attention," she said.
The final comment offered by the accounting firm was in regard to student activity accounts, specifically where the monthly reports and reconciliations were incomplete or incorrect.
"It's only been a couple of years that the student activity funds have been required to be reported in the financials of the district and it has been an ongoing process to bring these under the education fund as opposed to how they had been treated previously as custodial funds," Moulton said. "We just recommend the district look at how these activity funds are handled to make sure the reporting is correct."
Activity funds are handled at the building level and Moulton said this is something the auditing firm sees occurring in a number of school districts where non-financial personnel are managing the activity accounts.
Smith said ideas are being reviewed to assist the building level secretaries who manage those funds.
"These are comments from the auditor, not findings, but they help us get better at our process and controls and we appreciate the feedback," Smith said.
"We had no other issues with the audit, all in all, it was a very clean audit," Moulton said.
The complete fiscal year 2023 audit can be viewed on the district website under the financial operations tab that is located under the district tab on the homepage. Financial audits dating back to fiscal year 2008 are also available on the website.