Report No. 9839, District School Board 9839
STATE OF FLORIDA
OFFICE OF THE AUDITOR GENERAL
• S.
APPROVED OPd________ - ---
BOOK ____ 1 -- — PACE �.Q3—
*** MONROE COUNTY ***
DISTRICT SCHOOL BOARD
FOR THE FISCAL YEAR ENDED JUNE 30, 1979
9839
STATE' OF FLORIDA
OFFICE OF THE AUDITOR GENERAL
Report on Audit
of the Accounts of the
MONROE COUNTY
DISTRICT SCHOOL BOARD
For the Fiscal Year Ended June 30, 1979
Dated: March 20, 1981
darv4O
sA."VA STATE OF FLORIDA
"r
I.
i D F OFFICE OF THE AUDITOR GENERAL
Tallahassee, Florida
ERNEST ELLISON.C.P A. March 20, 1981
AUDITOR GENERAL
The Legislative Auditing Committee
of the Legislature
and the
Governor of Florida
Pursuant to the provisions of Section 11 .45, Florida
Statutes, I have directed that an audit be made of the accounts and
records of the
MONROE COUNTY
DISTRICT SCHOOL BOARD
For the Fiscal Year Ended June 30, 1979,
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No.
and present this report thereon.
(1) The objectives of this audit were: (1) to express an
opinion on the financial statements for the fiscal year ended June 30,
1979, do (2) to report s, that may and rbeatters determinedlbyd
byy1 Section 1.45(6) (c) , Florida Statute
audit tests.
PERSONNEL
(2) The personnel of the Board was as follows:
District
No.
Joseph T. Thompson, Jr. , Chairman 1
E. H. "Johnny" Walker 2
Thomas S. Fouts to 11-20-78 3
Gerald E. Adair from 11-21-78 3
Roger L. Swift, Vice-Chairman 4
Ruth Alice Campbell 5
Dr. Armando J. Henriquez, Superintendent
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SCOPE AND OPINION
(3) We have examined the financial statements of the Monroe
County District School Board for the fiscal year ended June 30, 1979,
listed on pages 15 and 16. Except as noted in the following
paragraph, our examination was made in accordance with generally
accepted auditing standards and, accordingly, included such tests of
the accounting records and such other auditing procedures as we
considered necessary in the circumstances.
(4) A substantial portion of the revenue, $671,024. 77, of the
Special Revenue Funds relating to food service operations resulted
from cash sales of food to students, faculty, and staff. Due to
material weaknesses in internal control it was not practicable to
satisfy ourselves with respect to such revenues beyond amounts
reported as received.
(5) In our opinion, except for the effects, if any, of the
matter discussed in the preceding paragraphs, relating to food service
revenue the aforementioned financial statements present fairly the
financial position of the Monroe County District School Board at June
30, 1979, and the results of its financial operations for the year
ended, in conformity with generally accepted accounting principles
applied on a consistent basis.
FINANCIAL MANAGEMENT - GENERAL
(6) Prenumbered receipts were assigned by the finance department
to the schools for internal fund collections and to the Vocational-
Technical Adult Education Department for the collection of fees for
adult education courses and for the sale of books. Receipt blanks
assigned were not reconciled to the receipt blanks reported as issued,
voided, or on hand.
(7) Monthly reports of depository balances and estimated highest
balances for the ensuing months required by Section 136. 02(2) , Florida
Statutes, were properly prepared and filed with the Clerk of the
Circuit Court.
(8) The withdrawal of funds from the Board' s depository accounts
was made by check or warrant in the manner prescribed by law.
(9) Comments regarding weaknesses in accounting controls and
procedures over cash receipts for meal sales are under the heading,
SPECIAL REVENUE FUNDS, Food Service.
Time Deposit and Investment Practices
( 10) The Board invested idle funds with local banks in interest-
bearing time deposits. Written competitive interest rate quotations
were obtained for time deposits in order to secure maximum interest
rates. Annual interest rates ranged from 6. 75 to 11.00 percent.
Interest earned was computed and credited quarterly as required by
Section 136.04, Florida Statutes.
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(11) Interest earned on investments during the 1978-79 fiscal
year, by major fund group, is shown in the following tabulation:
Major Fund Group
Interest Income from Investments
Made Locally: $159, 038.02
General Fund 2
Special Revenue Funds 038 .41, 459.00
Debt Service Funds 3,432.22
Capital Projects Funds
Interest Income from Investments
of Board Funds Held by the State: 37 886.77
Debt Service Funds 6 886.77
Captial Projects Funds
Total $248, 742 . 60
Budget Administration
(12) In general, budgets were prepared and adopted in compliance
with applicable laws and regulations. However, the budget for 1978-79
was approved by the Board 20 days after the deadline specified by
State Board of Education Rule 6A-1.071(3) , Florida Administrative
Code. Budget amendments were approved by the Board and the Department
of Education.
Revenues
(13) Our examination of direct Federal grants-in-aid funds was
made in accordance with the General Accounting Office STANDARDS FOR
AUDIT OF GOVERNMENTAL ORGANIZATIONS, PROGRAMS, ACTIVITIES AND
FUNCTIONS and generally accepted auditing standards established by the
American Institute of Certified Public Accountants. During fiscal
year 1978-79, the Board received the following funds direct from the
Federal Government:
Amount
Program Received
Federal Impact, Current Operation $1,054, 778. 57
Refuge Revenue Sharing Act: 28, 639 .00
Key Deer National Wildlife Refuge
Emergency School Aid Act:
Bilingual: 57, 802 .00
1978-79
1977-78 146,254. 00
Total $1,287, 473 . 57
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( 14) Funds provided from Federal through State and State sources
are summarized in the following tabulation:
•
Source Total
Federal State
Through
State
General Fund $ $5, 033, 165. 42 $5, 033, 165. 42
Special Revenue Funds 803, 495 . 10 837,852 . 73 1, 641, 347.83
Debt Service Funds 399, 961. 72 399,961. 72
Capital Projects Funds 394,913 . 67 394,913 . 67
Total $803, 495. 10 $6, 665, 893 .54 $7, 469,388. 64
( 15) Most of the revenues received from the Federal Government
through the State were from the National School Lunch and Child
Nutrition Act, Elementary and Secondary Education Act, Comprehensive
Employment Training Act (CETA) , and Vocational Education Act.
( 16) State funds received for current operations were primarily
from the Florida Education Finance Program (FEFP) administered by the
State Department of Education under the provisions of Section 236. 081,
Florida Statutes. In accordance with this law, the Board filed school
principals' reports of full-time equivalent student membership with
the Department of Education. The Department of Education accumulated
information from these reports and calculated the allocations of FEFP
funds. The Department of Education, after review and verification of
the school principals' reports and supporting documentation, may
during subsequent fiscal periods adjust the allocation of FEFP funds
which were received during the audit period.
( 17) Revenues from local sources consisted primarily of the
district school tax and collections for meal sales to students,
faculty, and staff.
( 18) Millages and taxes levied for school purposes on the 1978
tax roll are shown below:
1978
Mills Amount
General Fund:
Nonvoted School Tax 7. 45 $8, 171, 528. 59
The millage was within amounts authorized by Section 236.25(1) ,
Florida Statutes.
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Personnel and Payroll Administration
(19) Salary payments were adequately supported and made in
accordance with salary schedules adopted by the Board. Members of the
instructional staff were paid in accordance with their contracts and
the salary schedules. Deductions for retirement and social security
were correctly calculated and promptly remitted.
(20) Board members were compensated in accordance with Chapter
145, Florida Statutes.
(21 ) The Superintendent' s compensation was governed by Section
145.08, Florida Statutes, and was correctly calculated and paid.
(22)
On July 27, 1978, the Board approved the payment of $900
tuition per quarter for four quarters for the Superi1979aethetBoardo ain
a PhD. in Administration and Education. On July 9,
approved the payment of "$900 tuition per quarter for two additional
quarters, possibly one. " Neither the Board nor the Superintendent has
cited to us any statutory authority which either expressly or by
necessary implication renders the payment of tuition of the
Superintenaent a proper expense of the Board. Accordingly, we
recommend that the Superintendent repay to the Board the amount of the
tuition expense, unless and insofar as it can be shown that the
expense, or some portion of it, was properly borne by the Board.
(23) The Superintendent in his written response to paragraph 22,
above, enumerated several reasons as to why it was beneficial to the
Board and its educational program to pay tuition to further his
education. However, the Superintendent is an elected official whose
duties, responsibilities, and compensation in this capacityha are
es setfby
law. In the absence of specific authorizing legislation,
public funds to underwrite an elected official' s doctoral program does
not appear to serve a proper public purpose. Since the parameters of
the so-called "School Board Home Rule Statute" (Section 230. 03 (2) ,
Florida Statutes) referred to by the Superintendent have not been
judicially determined as yet, we recommend that the Board seek an
advisory opinion from the Attorney General
or otherwise,el whether dsaido statute
authorizes a school board, by contract
things which are not otherwise authorized by law.
(24) Qualifications and job descriptions were adopted by the
Board for all positions of employment. •
(25) Leave was taken in accordance with policies adopted by the
Board pursuant to Chapter 231, Florida Statutes, and the State Board
of Education Rules.
(26) Storage facilities used for personnel records did not meet
the fire protection requirements of State Board of Education Rule
6A-1 . 69(3) , Florida Administrative Code. The Superintendent, in his
response to similar findings in prior audit reports, has stated that
• storage facilities meeting the requirements of the rule mentioned
above will be provided in the new administration building We
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observed that as of August 1980 the new administration building,
although under construction, was not completed.
Purchasing Practices
(27) Most purchases were made pursuant to purchase orders signed
by the Superintendent or administrative employees of the Board.
Purchase orders were not issued for perishable food products purchased
by the food service department.
(28) Pursuant to the provisions of State Board of Education Rule
6A-1. 12, Florida Administrative Code, the Board was required to
request bids from three or more sources for any authorized purchase
exceeding $3, 000. During the course of our examination we noted the
following purchases which were not made pursuant to competitive bids:
1. Fertilizer purchased on voucher No. 8091 at a cost of
$3, 686. 55.
2 . Building materials purchased for various day labor
projects:
Asphalt Roof Shingles $ 3, 827. 90
Framing Lumber 7,340. 16
Plywood 22,013 .58
Although in most instances individual purchases of items
listed above did not exceed $3,000, the preparation
and/or review of cost estimates by Board personnel would
have disclosed that the total cost of needed building
materials would have exceeded $3, 000.
The Superintendent states in his written response to
paragraph 28, item No. 2, above, that quotes were called
for from vendors for these materials at the beginning of
the renovation work. If this is the case, no mention
was made or evidence presented of the quotes having been
requested at the time the matter was discussed with the
Superintendent on August 14, 1980. If the quotes
referred to by the Superintendent were verbal, the
Superintendent should have taken steps to document the
same in the public records of the Board.
3. Liquid propane gas purchases during the 1978-79 fiscal
year totaled approximately $20, 000. The Board' s records
did not disclose any evidence that such purchases were
made pursuant to the provisions of State Board of
Education Rule 6A-1. 12(7) , Florida Administrative Code.
The Superintendent in his written response to paragraph
28, item No. 3, above, suggests that additional costs to
the District would result by calling for bids annually
for the liquid propane gas. However, State Board of
Education 6A-1 . 12(7) , Florida Administrative Code,
waives bid requirements for the purchase of petroleum
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and paper products, but only when the Board has
requested bids and has made a finding that no valid or
acceptable firm bid has been received within the
prescribed time. The Attorney General in opinion No.
075-310 states that " . a legislative directive as to
the manner in which a thing is to be done impliedly
prohibits its being done in any other way. " We were
shown no evidence that the above conditions were met.
(29) The Board made numerous payments to consultants during the
audit period. Written agreements were not of record to show the
nature and extent of services to have been provided by each consultant
together with the terms and amount of compensation. Purchase orders
were prepared for most consultant services; however, those documents
did not describe the services in sufficient detail to permit a
determination of the extent to which services actually received agreed
with those required of the consultants. We recommend that all
consultant services be purchased pursuant to written agreements which
describe the services to be provided in sufficient detail as to permit
a comparison with service actually received, together with the terms
and amount of compensation for consultant services.
(30) The Board made two payments totaling $4,397. 15 to a firm of
private attorneys. The payments covered charges for professional fees
in the amount of $3, 910, and $487 . 15 for various expenses incurred on
behalf of the Board. Invoices supporting those payments showed the
dates professional services were rendered and a brief description of
services provided; however, there was neither indication of the hours
consumed nor the rates charged for services rendered. Invoices showed
a description of expenses incurred on behalf of the Board, the dates
incurred and amounts for each type; however, the Board did not of
record receive documentation supporting claims for expense
reimbursements. In the absence of sufficient information neither
Board employees nor we could verify the correctness of amounts charged
to or paid by the Board.
(31) The Board contracted with the Guidance Clinic of the Upper
Keys for certain counseling and guidance services to students in
matters of mental health. Payments to the Guidance Clinic totaled
$9,990 during the audit period. The specific nature and extent of
services to be furnished were not shown in the contract. Monthly
invoices from the Guidance Clinic did not disclose the nature and
extent of services furnished. In the absence of records showing
specifically the nature and extent of services to be furnished,
neither employees of the Board nor we could determine whether the
Board had received all services to which it was entitled under the
contract. Also, the basis relied upon by the Board in approving the
invoices for payment was not apparent. The Attorney General in
opinion No. 068-12, dated January 25, 1968, ruled that vouchers for
payment of public funds submitted or to be sumbitted to the paying
agency should contain sufficient information for the paying agency, or
its preauditors or officials and the postauditor to determine whether
the requested payment is authorized by law.
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Travel
(32) Travel expense reimbursements were usually made at rates
authorized by Section 112 .061, Florida Statutes; however, in at least
14 instances per diem allowances paid were in excess of amounts
allowable based on the length of travel periods reported.
Overpayments ranged from $2 .50 to $26.25. In at least 13 instances
travel expense reimbursements included claims for telephone charges
but there was no documentation showing the authorized public purpose
of such calls. Telephone expense reimbursements ranged from $2 . 91- to
$17.94.
(33) The Superintendent in his written response to paragraph 32,
above, suggests that per diem allowances paid in excess of amounts
allowable result from differences of interpretation as to the manner
in which the travel period is computed. If this is the case, the
difference the Superintendent has reference to must be a maximum of
one minute; otherwise, the methods used to compute the travel period
are the same.
(34) Some payments for travel expenses were made prior to the
reported dates on which travel was actually made. Such payments were
supported by travel expense claim forms which showed the anticipated
time periods that travel was to be made together with a calculation of
the expenses allowable. Written travel reports were not submitted of
record after travel was actually made to show the extent, if any, to
which actual travel expenses differed from estimated expenses.
(35) The Board conducted a principals' workshop at the Ocean Reef
Club in Key Largo during August 1978. Each Board employee who
attended the workshop was charged a registration fee of $25.
Registration fees collected were remitted to the Ocean Reef Club but
the Board did not obtain either invoices or receipts for monies
remitted. The Board made reimbursements to its employees for
registration fees. Since the workshop was sponsored by the Board
primarily for the benefit of its employees, it does not appear to be
appropriate for the Board to assess a registration fee to its
employees and turn the proceeds over to a third party without
obtaining any documentation as to the services covered. While the
registration fees as to Board employees may have been an appropriate
Board expense, payment to the Ocean Reef Club should have been made by
Board warrant pursuant to an itemized invoice, evidencing the nature
and extent of services provided in exchange for such payment.
(36) Controls over gasoline credit cards were not adequate.
Board records did not show the quantity of cards received from each
petroleum company. The Board did not of record limit the authorized
use of those cards to specific employees. In some instances the names
of employees to whom credit cards were assigned were not of record.
The Board' s preaudit procedures included a comparison of delivery
tickets with invoices submitted by the petroleum companies.
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Although preaudit procedures over billings appeared generally
adequate, internal control over gasoline purchases would be improved
if the Board entered into its records the quantity of gasoline credit
cards received from each company, the names of employees specifically
authorized to use those cards, and the names of employees to whom
cards are assigned.
Insurance
(37) Insurance was obtained pursuant to competitive bids whenever
practicable. Coverage appeared adequate and complied with legal
requirements. Workers' compensation coverage was provided on a self-
insurance basis with a purchased specific and aggregate workers'
compensation insurance policy to provide additional coverage for any
excessively large claims. Workers' compensation claims were processed
by the Board' s insurance service agent pursuant to a contract approved
by the Board on July 13, 1978, which provided for an estimated fee of
$19,045. Adequate workers' compensation claims files which included
supporting documentation for compensation payments were maintained by
the Board.
Financial Reports
(38) Annual financial statements required by State Board of
Education Rule 6A-1 .071, Florida Administrative Code, were prepared,
approved by the Board, and filed with the Commissioner of Education.
Other Reports
(39) The Board prepared and filed a Food Service Special Revenue
Interim Report for the 1978-79 fiscal year as required by Federal
regulations; however, some of the amounts shown on that report
differed from corresponding amounts shown on the Superintendent' s
Annual Financial Report. We were advised by Board personnel that the
Superintendent' s Annual Financial Report was prepared from
computerized accounting records on file in the Board' s finance
department and that the Food Service Special Revenue Interim Report
was based on manually prepared accounting records prepared by
employees assigned to the food service accounting office. Differences
between amounts shown on the computerized records and corresponding
amounts shown on the manually prepared records existed because some
transactions were posted to one record but omitted from the other. A
review of the specific accounts affected disclosed that, after
adjustment for food inventories at June 30, the Superintendent' s
annual financial report fairly presented the financial position and
operating transactions of the Special Revenue Funds - Food Service
except for the effects, if any, of the deficiencies in internal
control applicable to cash sales. We recommend that Board employees
compare amounts shown on the computerized records with corresponding
amounts shown on the manually prepared records and reconcile any
differences prior to preparation of its required financial reports.
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Accounting System and Financial Records
(40) The financial records and accounts generally were in
accordance with the instructions issued by the Department of Education
in its publication, A MANUAL. . . FINANCIAL AND PROGRAM COST ACCOUNTING
AND REPORTING FOR FLORIDA SCHOOLS.
(41) Source documents consisting of collections and disbursements
batch summary sheets and journal voucher sheets submitted to the data
processing department for recording transactions to the financial
accounts did not contain evidence of review and approval by
appropriate supervisory personnel . We recommend that employees who
supervise the preparation of such source documents review and approve
those documents prior to their submission to the data processing
department.
(42 ) Perpetual inventory records were maintained at the following
locations: stores and distribution warehouse, maintenance department,
transportation department and school food service department. The
following deficiencies were noted in records and accounting controls
pertaining to inventories of materials and supplies:
1. In numerous instances the quantities of items issued
from stock were not posted to the perpetual inventory
records. This occurred mainly in the transportation
department.
2. Adjustments to perpetual inventory records and
corresponding inventory control accounts were not of
record reviewed and approved by an appropriate Board
employee.
(43) The failure to post to the perpetual inventory records
quantities of some items issued from stock coupled with the absence of
review and approval of adjustments to perpetual inventory records
could allow the unauthorized removal of stock items from the Board' s
warehouses without a reasonable probability of detection. Even in the
absence of unauthorized use, the failure to record transactions
results in the incorrect recording and reporting of the utlimate use
of Board assets. All quantities of items issued from stock should be
posted to the appropriate perpetual inventory records, and offsetting
entries made simultaneously to appropriate expense or asset accounts.
Documentation for all adjustments to perpetual inventory records
should be prepared, approved by an appropriate supervisory employee,
and retained in the Board' s public records.
Minutes
(44) The minutes of Board meetings were generally well kept and
appeared to include all official actions of the Board pursuant to
Section 230.23(1) , Florida Statutes. Minutes were Available for
public inspection as required by Section 286.011, Florida Statutes.
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Internal Funds
(45) The Board, under the provisions of State Board of Education
Rule 6A-1.87, Florida Administrative Code, has the responsibility for
the administration and control of internal funds. In addition, the
Board is responsible for providing an annual audit of these funds by a
qualified auditor. Therefore, the internal funds are not included in
the scope of this audit. An audit was made of the internal funds for
the 1978-79 fiscal year by an independent certified public accountant;
however, the accountant did not of record provide the Board with a
report of audit findings. The audit report furnished to the Board
consisted only of a series of financial statements. State Board of
Education Rule 6A-1 . 87, Florida Administrative Code, requires each
auditor of internal funds to submit a signed written report to the
Board disclosing any instances of failure to comply with requirements
of Florida Statutes, State Board of Education Regulations, and
policies of the School Board, together with a commentary concerning
financial management and irregularities. We recommend that the Board
request its independent auditor to provide a report of audit findings
in accordance with the above-mentioned rule.
SPECIAL REVENUE FUNDS
Food Service
(46) Lunches were served at all 16 public schools in Monroe
County during the 1978-79 fiscal year. Breakfast programs were
provided at ten of those schools. State Board of Education Rule
6A-7 . 42(2 ) (a)6. , Florida Administrative Code, requires each school not
having a breakfast program to conduct a survey at the beginning of
each school year for the purpose of determining the potential
participation in such a program. Records provided for audit showed
that surveys were conducted at four of the six schools without
breakfast programs. Surveys were not of record conducted at the other
two schools. The State Board of Education rule mentioned above
further requires that the survey results together with recommendations
from principals of the respective schools concerning the
implementation of breakfast programs be presented to the Board for its
actions. Board minutes did not show any evidence that any survey
results and accompanying recommendations were presented to the Board.
(47) A substantial portion of the revenue, $671, 024. 77, reported
for food service operations cn the accompanying financial statements
resulted from cash sales of food to students, faculty, and staff.
Internal controls over the collection of these revenues were not
adequate in that:
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1. Prenumbered receipts or tickets were not issued for some
collections.
2. The duties of collecting cash and the preparation of
corresponding reports of food sales were not segregated.
3 . In some instances daily reports of food sales did not
show register readings or amounts of overages and
shortages.
The Superintendent in his written response to item No. 1, above,
states that where a roster system is used, prenumbered receipts are
unnecessary and would be unmanageable. I agree with the
Superintendent; however, the comment had reference to those
collections in which neither a register nor a roster system was used.
(48) Because of the absence of some records evidencing food sales
and since the duties of collecting monies for food sales and the
preparation of corollary data were not sufficiently segregated at some
schools, we could not verify the correctness of food sales beyond the
amounts reported as collected. We recommend that the Board require in
all cases the preparation of records evidencing food sales and that
the duty of preparing those records be assigned to individuals who do
not make cash collections to the extent which is practicable within
present staffing levels.
(49) The Board provided meals to two local children' s day care
centers; however, there were no agreements of record to show the
prices to be charged for those meals. Consequently, we could not
verify the correctness of prices charged to the day care centers.
While the provision of meals to these organizations may well serve a
useful purpose, the legal author:ty for the Board to sell these meals
was not apparent from a review of the Board' s records. We recommend
that the Board make a determination of record as to the specific law
or Rule of the State Board of Education which authorizes the Board to
sell meals to benefit private or public (nonprofit) child care
centers.
(50) The Superintendent, in his written response to paragraph 49,
above, indicates that since the majority of the preschool students
will be in the public schools eventually, the Board should provide
them meals at the same cost as of that in the regular K-12 programs.
However, the Superintendent did not provide any guidance as to what
authority existed under State law for the Board to enter into such
agreements. In view of the Superintendent' s response, we suggest this
matter be reviewed with appropriate personnel of the State Department
of Education.
Other
(51) Various Comprehensive Employment and Training Act (CETA)
subgrants awarded to the Board were audited by two certified public
accounting firms. Audit reports (on file with the Board as public
records) for the period June 1, 1974, to September 30, 1977, dated
July 21, 1978, and for the period June 15, 1977, to September 30,
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1978, dated March 28, 1980, discussed various deficiencies in
procedures regarding the administration of the CETA programs, and
listed questioned costs totaling $47,311 and $2, 399, respectively.
Board personnel, in written response to these findings, provided
additional information and explanations for the questioned costs and
indicated that the recommendations of the auditors would be complied
with. In a memorandum dated January 15, 1979, the Executive Director
of the South Florida CETA Consortium indicated that the questioned
costs for the period June 1, 1974, to September 30, 1977, had been
reduced to $5,049. On March 27, 1979, the Board refunded this amount
to the South Florida Employment and Training Consortium. As of August
28, 1980, a final determination had not been made as to the $2,399
questioned in the audit report dated March 28, 1980. We recommend
that the Board make better efforts in the future to comply with
requirements for proper procedures and records to support expenditures
from CETA funds.
DEBT SERVICE FUNDS
State Board of Education/
COBI Bonds
(52) These bonds were issued by the State Board of Education on
behalf of the Board under Section 9(d) , Article XII , of the
Constitution of the State of Florida. The State Department of
Education is responsible for administering the debt service and
reserve requirements of these binds.
$1,500, 000 Special Act Certificates of
Indebtedness, Dated June 1, 1966
(53) A portion of the Board' s racetrack funds authorized under
Chapters 550 and 551, Florida Statutes, was pledged to pay the
principal and interest on these bonds. Debt service payments were
made and reserve requirements were met.
$2, 750, 000 District Bonds,
Dated August 1, 1955
(54) The Board retired its indebtedness under this bond issue
during fiscal year 1975-76. A balance of $179, 847.23 remained in this
fund at June 30, 1979 . We recommend that the Board authorize, by
resolution, the transfer of this balance to the district school fund
in accordance with Section 236. 56, Florida Statutes.
CAPITAL PROJECTS FUNDS
(55) Project files for the Board' s capital projects were
generally complete and well maintained. Separate project ledgers were
kept for each project. Payments to architects and contractors were
made in accordance with contract terms.
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(56) There were no major construction projects in progress during
the 1978-79 fiscal year which were financed from capital outlay funds.
The cost of remodeling buildings to house the Board' s administrative
offices was paid from monies accounted for in the General Fund.
GENERAL FIXED ASSETS GROUP OF ACCOUNTS
(57) The amounts invested in land and buildings and fixed
equipment were recorded on subsidiary ledger account cards which were
posted on a current basis and balanced with the general ledger control
accounts.
(58) Audit tests indicated that tangible personal property
records generally complied with the provisions of Chapter 274, Florida
Statutes, and the rules issued pursuant thereto.
GENERAL LONG-TERM DEBT GROUP OF ACCOUNTS
(59) The Board did not incur any new long-term debt during the
audit period.
(60) Details of outstanding bond issues are shown on exhibit H.
STATEMENT FROM AUDITED OFFICIAL
(61) In accordance with the provisions of Section 11 .45(6) (d) ,
Florida Statutes, a list of audit findings was submitted to the Board.
The Superintendent' s response to the audit findings included in this
report is shown on exhibit K.
(62) In his response the Superintendent submitted and made
reference to several documents which constitute public records of his
office. These documents are not reproduced in this report.
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EXHIBITS
The following exhibits are attached to and form a part of
this report:
Combined Section
EXHIBIT - A Combined Balance Sheet - All Funds.
General Fund
EXHIBIT B-1 Balance Sheet.
EXHIBIT B-2 Statement of Revenues, Expenditures, and Transfers.
EXHIBIT B-3 Statement of Changes in Fund Balance.
Special Revenue Funds
EXHIBIT C-1 Balance Sheet.
EXHIBIT C-2 Statement of Revenues, Expenditures, and Transfers.
EXHIBIT C-3 Statement of Changes in Fund Balance.
Debt Service Funds
EXHIBIT D-1 Balance Sheet.
EXHIBIT D-2 Statement of Revenues and Expenditures.
EXHIBIT D-3 Statement of Changes in Fund Balances.
Capital Projects Funds
EXHIBIT E-1 Balance Sheet.
EXHIBIT E-2 Statement of Revenues, Expenditures, and Transfers.
EXHIBIT E-3 Statement of Changes in Fund Balances.
General Fixed Assets
EXHIBIT - F Statement of General Fixed Assets.
15
General Long-Term Debt
EXHIBIT - G Statement of General Long-Term Debt.
EXHIBIT - H Combined Schedule of Bonds Payable.
Other
EXHIBIT - I Summary of Significant Accounting Policies.
EXHIBIT - J Notes to Financial Statements.
EXHIBIT - K Statement from Audited Official.
Respectfully submitted,
(Signed) Ernest Ellison, C.P.A.
Auditor General
Audit supervised by:
(Signed) Willard G. Hale
Audit made by:
(Signed) James A. Bell
16
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MONROE COUNTY EXHIBIT B-1
DISTRICT SCHOOL BOARD
GENERAL FUND
BALANCE SHEET
June 30, 1979
ASSETS
Cash $2,439,746.86
Taxes Receivable 290,358.10
Accounts Receivable 27.587.64
Due from Other Funds:
Due from Budgetary Funds 49,787.15
Due from Internal Funds 6,650.99
Inventory 214,737.98
Other Current Assets:
Due from Other Agencies 17,724.18
Interest Receivable 112,833.88
TOTAL ASSETS $3,159,426.78
LIABILITIES, RESERVES,AND FUND BALANCE
Liabilities:
Accounts Payable $ 80,042.20
Due to Other Funds:
Due to Budgetary Funds 43.463.38
Payroll Deductions and Withholdings 33,633.48
Total Liabilities 157.139.06
Reserves:
Reserve for Insurance Loss Recoveries 9,216.67
Fund Balance:
Reserve for Encumbrances 243,011.72
Unappropriated Fund Balance 2,750,059.33
Total Fund Balance 2,993,071.05
TOTAL LIABILITIES, RESERVES, AND FUND BALANCE $3.159.426.78
The accompanying summary of significant accounting policies and notes to the
financial statements are an integral part of this statement.
19
EXHIBIT B-2 MONROE COUNTY
DISTRICT SCHOOL BOARD
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES, AND TRANSFERS
For the Fiscal Year Ended June 30, 1979
Final Actual Over (Under)
Budget Revenues Budget
Revenues
Federal Direct
Department of HEW:
Federal Impact, Current Operation $ 1,056,466.00 $ 1.054.778.57 $
Other Federal Direct: (1.687.43)
Key Deer Refuge Receipts 40,734.00 28,639.00 (12,095.00)
Total Federal Direct 1,097,200.00 1,083,417.57 (13,782.43)
State Sources:
Florida Education Finance Program 5,030,282.00 3.946.394.00 (1,081,888.00)
Adult Community Instructional Services 38.715.00 38,715.00
Capital Outlay and Debt Service Withheld
for Administrative Expenses 4,686.63 4,686.63
Categorical State Sources:
Comprehensive Health Education 14,029.25 14,029.00 (.25)
Community School Program 48,000.00 48,000.00
Instructional Materials 105,678.00 103,995.00 (1,683.00)
Student Development Services 96,169.00 95,225.00 (944.00)
Transportation 360.896.00 323.020.00 (37,876.00)
Education Improvement Grants 23,180.00 23,180.00
Compensatory Education 116,431.00 116,431 00
Other State
Racing Commission Funds 93,250.00 93,250.00
State License Tax 80,000.00 158,409.79 78,409.79
Miscellaneous State 65,830.00 65,830.00
Total State Sources 6,077,146.88 5,033,165.42 (1,043,981.46)
Local Sources:
District School Taxes
Tax Redemptions 7,361,308.00 7,951,696.62 590,386.62
Payment in Lieu of Taxes 13,018.15 13,018.15
Tuition 76.951.00 76,951.00
Rent 5,442.00 2.500.00 (2,942.00)
Interest, Including Profit on Investments 1,000.00 3,218.27 2,218.27
Gifts, Grants, and Bequests 10,000.00 159.038.02 149,038.02
Miscellaneous Local Sources: 13.155 70 13,155.70
Receipt of Federal Indirect Cost Rate 47,876.20 47,876.20
Other Local Sources 50,000.00 69,225.70 19,225.70
Total Local Sources 7,427,750.00 8,336,677.66 908,927.66
Total Revenues 14,602,096.88 14,453,260.65 (148,836.23)
Remittances from Others:
Remittances from Other Agencies 36,664.00 36,66400
Nonrevenue Sources:
Sale of Fixed Assets
10,574.02 10,574.02
Total Revenues, Remittances,and Nonrevenue Receipts $14,638,760.88 14,500,498.67 $ (138,262.21)
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EXHIBIT B-3 MONROE COUNTY
DISTRICT SCHOOL BOARD
GENERAL FUND
STATEMENT OF CHANGES IN FUND BALANCE
For the Fiscal Year Ended June 30, 1979
Fund Balance. July 1. 1976 $2,604,556.45
Add:
Excess of Revenues. Remittances. and Nonrevenue Receipts
Over Expenditures, Remittances, and Transfers 404,090.32
Total Balance and Additions 3,008,646.77
Deduct:
Adjustments to Decrease Fund Balance 15,575.72
Fund Balance, June 30, 1979 $2,993,071.05
The accompanying summary of significant accounting policies and notes to the
financial statements are an integral part of this statement.
22
MONROE COUNTY EXHIBIT C-1
DISTRICT SCHOOL BOARD
SPECIAL REVENUE FUNDS
BALANCE SHEET
June 30, 1979
Food Service Other Total
ASSETS
Cash $ 41,322.73 $ 84,071.20 $125,393.93
Accounts Receivable 36,493.33 77 383.89 113,877.22
Due from Other Funds:
Due from Budgetary Funds 980.82 980.82
Inventory 123,746.89 123,746.89
Due from Other Agencies 7,090.96 16,197.84 23,288.80
TOTAL ASSETS $208,653.91 $178,633.75 $387,287.66
LIABILITIES AND FUND BALANCE
Liabilities'
Accounts Payable $ 2.152.00 $ 2,940.95 $ 5,092.95
Construction Contracts Payable 53,048.00 53,048.00
Due to Budgetary Funds 50,767.97 78,758.62 129,526.59
Due to Other Agencies 27,372.49 27,372.49
Total Liabilities 52,919.97 162,120.06 215,040.03
Fund Balance:
Reserve for Encumbrances 38,492 16 38,492.16
Unappropriated Fund Balance 155,733.94 (21,978.47) 133,755.47
Total Fund Balance 155,733.94 16,513.69 172,247.63
TOTAL LIABILITIES AND FUND BALANCE $208,653.91 $178,633.75 $387,287.66
The accompanying summary of significant accounting policies and notes to the financial statements are an integral
part of this statement.
23
EXHIBIT C-2 MONROE COUNTY
DISTRICT SCHOOL BOARD
SPECIAL REVENUE FUNDS
FOOD SERVICE
STATEMENT OF REVENUES, EXPENDITURES, AND TRANSFERS
For the Fiscal Year Ended June 30, 1979
Final Actual Over (Under)
Budget Revenues Budget
Revenues
Federal Through State:
National School Lunch Act $ 655,000.00 $ 645,270.03 $ (9,729.97)
State Sources'
Food Service Supplement 35,000.00 32,573.97 (2,426.03)
Local Sources:
Interest, Including Profit on Investments 459.30 459.30
Food Services 661,800.00 671,024.77 9,224.77
Miscellaneous Local Sources 51.86 51.86
Total Local Sources 661,800.00 671,535.93 9,735.93
Total Revenues 1,351,800.00 1,349,379.93 (2,420.07)
Incoming Transfers 12,734.65 12,734.65
Total Revenues and Transfers $1,364,534.65 1,362,114.58 $ (2,420.07)
24
•
MONROE COUNTY EXHIBIT C-2
DISTRICT SCHOOL BOARD (Continued)
SPECIAL REVENUE FUNDS
OTHER
STATEMENT OF REVENUES, EXPENDITURES, AND TRANSFERS
For the Fiscal Year Ended June 30. 1979
Final Actual Over (Under)
Budget Revenues Budget
Revenues
Federal Direct:
Other Miscellaneous Federal Direct $ 161,254.00 $ 158,225.07 $ (3,028.93)
Federal Through State:
Vocational Education Acts 51,291.18 34,512.11 (16,779.07)
Comprehensive Employment and Training Act(CETA) 106,345.03 80,259.74 (26,085.29)
Elementary and Secondary Education Act (ESEA) 820,452.44 646,030.66 (174,421.78)
Adult Basic Education 12,279.27 7,807.30 (4,471.97)
Nutritional Education and Training Process 3,075.00 (3,075.00)
Other Federal Through State 34,536.33 12,854.80 (21,681.53)
Education for All Handicapped 34,433.00 23,814.15 (10,618.85)
Total Federal Through State 1,062,412.25 805,278.76 (257,133.49)
Local Sources.
Prior Year Refund 135.90 135.90
Total Revenues 1,223,666.25 963,639.73 (260,026.52)
Remittances from Others 1,189,874.00 915,962.28 (273.911.72)
Incoming Transfers 154,156.00 136,834.28 (17,321.72)
Total Revenues, Remittances, and Transfers $2,567,696.25 2,016,436.29 $(551,259.96)
25
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EXHIBIT C-3 MONROE COUNTY
DISTRICT SCHOOL BOARD
SPECIAL REVENUE FUNDS
STATEMENT OF CHANGES IN FUND BALANCE
For the Fiscal Year Ended June 30, 1979
Food Service Other Total
Fund Balance. July 1, 1978 $166,111.51 $54,904.76 $221,016.27
Deduct:
Deficiency of Revenues and Transfers Over
Expenditures and Transfers 5,182.64 145.27 5,327.91
Adjustments to Decrease Fund Balance 5,194.93 38,245.80 43,440.73
Total Deductions 10,377.57 38,391.07 48,768.64
Fund Balance, June 30, 1979 $155,733.94 $16,513.69 $172,247,63
The accompanying summary of significant accounting policies and notes to the financial statements are an integral
part of this statement.
28
MONROE COUNTY EXHIBIT D-1
DISTRICT SCHOOL BOARD
DEBT SERVICE FUNDS
BALANCE SHEET
June 30, 1979
Total SBE/ Special District
COBI Act Bonds
Bonds Bonds 1955
ASSETS
Cash $ 665,087.90 $ $485,240.67 $179,847.23
Investments 443,541.39 443,541.39
TOTAL ASSETS $1,108,629.29 $443,541.39 $485,240.67 $179,847.23
FUND BALANCE
Unappropriated Fund Balance $1,108,629.29 $443,541.39 $485,240.67 $179,847.23
The accompanying summary of significant accounting policies and notes to the financial statements are an integral
part of this statement.
29
EXHIBIT D-2 MONROE COUNTY
DISTRICT SCHOOL BOARD
DEBT SERVICE FUNDS
STATEMENT OF REVENUES AND EXPENDITURES
For the Fiscal Year Ended June 30, 1979
Final Actual Over (Under)
Budget Revenues/ Budget
Expenditures
STATE BOARD OF EDUCATION/COBI BONDS
Revenues:
CO & DS Withheld for SEE Bonds $232,074.95 $232,074.95 $
SBE Bond Interest 37,886.77 37,886.77
Total Revenues 269,961.72 269,961.72
Expenditures:
Redemption of Principal 115,000.00 115,000.00
Interest 154,060.00 154,060.00
Dues and Fees 65.08 65.08
Total Expenditures 269,125.08 269,125.08
Excess of Revenues Over Expenditures $ 836.64 $ 836.64 $
SPECIAL ACT BONDS
Revenues:
Racing Commission Funds $130,000.00 $130,000.00 $
Interest on Investments 31,016.05 31,016.05
Total Revenues 130,000.00 161,016.05 31,016.05
Expenditures.
Redemption of Principal 60,000.00 60,000.00
Interest 48,250.00 45.937.50 (2,312.50)
Dues and Fees 2,000.00 706.99 (1,293.011
Total Expenditures 110,250.00 106,644.49 (3,605.51)
Excess of Revenues Over Expenditures $ 19,750.00 $ 54,371.56 $34,621.56
DISTRICT BONDS 1955
Revenues
Interest on Investments $ 10,300.00 $ 10,299.99 $ (.01)
Expenditures
Excess (Deficiency)QI Revenues Over Expenditures $ 10,300.00 $ 10,299.99 $ (.01)
The accompanying summary of significant accounting policies and notes to the financial statements are an integral
part of this statement 9
30
MONROE COUNTY EXHIBIT D-3
DISTRICT SCHOOL BOARD
DEBT SERVICE FUNDS
STATEMENT OF CHANGES IN FUND BALANCES
For the Fiscal Year Ended June 30, 1979
Total SBE/ Special District
COBI Act Bonds
Bonds Bonds 1955
Fund Balances, July 1, 1978 $1.043.121.10 $442,704.75 $430,869.11 $169,547.24
Add:
Excess of Revenues and Transfers Over
Expenditures 65,508.19 836.64 54,371.56 10,299.99
Fund Balances, June 30, 1979 $1,108,629.29 $443,541.39 $485,240.67 $179,847.23
a
The accompanying summary of significant accounting policies and notes to the financial statements are an integral
part of this statement.
31
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32
MONROE COUNTY EXHIBIT E-2
DISTRICT SCHOOL BOARD
CAPITAL PROJECTS FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND TRANSFERS
For the Fiscal Year Ended June 30, 1979
r
Final Actual Over (Under)
Budget Revenues/ Budget
Expenditures
CAPITAL OUTLAY AND DEBT SERVICE
Revenues:
Distributed to Districts $ 26.841.07 $ 75.680.42 $ 48,839.35
Interest on Undistributed CO & DS 6,610.25 6,610.25
Interest on Investments 3,432.22 3,432.22
Total Revenues 26,841.07 85,722.89 58,881.82
Expenditures
Excess of Revenues Over Expenditures $ 26,841.07 $ 85,722.89 $ 58,881.82
4
' PEBA 1976
Revenues $ $ $
Expenditures.
Capital Outlay'
Buildings and Fixed Equipment 72,239.61 8.561.47 (63,678.14)
Land Improvements 35,094.12 14,625.20 (20,468.92)
Remodeling 233,029.64 58,935.03 (174,094.61)
Total Expenditures 340,363.37 82,121 70 (258,241.67)
Excess (Deficiency) of Revenues Over Expenditures $(340,363.37) $(82,121.70) $ 258,241.67
PEBA 1977
Revenues $ $ $
Expenditures:
Capital Outlay:
Buildings and Fixed Equipment 11,000.00 (11,000.00)
Furniture, Fixtures, and Equipment 18,915.87 3,240.68 (15,675.19)
Land Improvements 98,600.00 667.93 (97.932.07)
Remodeling 63.487.00 1.058.94 (62,428.06)
Total Expenditures 192,002.87 4,967 55 (187,035.32)
Excess (Deficiency) of Revenues Over Expenditures $(192,002.87) $ (4,967.55) $ 187,035.32
PEBA 1978
Revenues $ $ $
Expenditures:
Capital Outlay:
Remodeling 216,194.00 60,000.00 (156,194.00)
Excess (Deficiency) of Revenues Over Expenditures $(216,194.00) $(60,000.00) $ 156,194.00
33
EXHIBIT E-2 MONROE COUNTY
(Continued) DISTRICT SCHOOL BOARD
CAPITAL PROJECTS FUNDS
STATEMENT OF REVENUES. EXPENDITURES, AND TRANSFERS
For the Fiscal Year Ended June 30, 1979
Final Actual Over (Under)
Budget Revenues/ Budget
Expenditures
PEBA 1979
Revenues
$ 312,623.00 $312,623.00 $
Expenditures:
Capital Outlay
Remodeling
31,262.00 (31,262.00)
Excess of Revenues Over Expenditures $ 281,361.00 $312,623.00 $ 31,262.00
COW 1974
Revenues
Expenditures
Excess of Revenues Over Expenditures $ $ $
CSC (OLD)
Revenues
Expenditures
Excess of Revenues Over Expenditures $ $ $
LCI
Revenues $ $ $
Expenditures
Capital Outlay
Furniture, Fixtures, and Equipment 1,885.80 1,885.80
Deficiency of Revenues Over Expenditures $ (1,885.00) $ (1,885.00) $
The accompanying summary of significant accounting policies and notes to the financial statements are an integral
part of this statement.
34
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EXHIBIT- F MONROE COUNTY
DISTRICT SCHOOL BOARD
STATEMENT OF GENERAL FIXED ASSETS
June 30, 1979
GENERAL FIXED ASSETS
Land
$ 2,703,776.21
Buildings and Fixed Equipment 21,071,887.95
Furniture, Fixtures. and Equipment 2,380,203.48
Motor Vehicles 943,730.20
TOTAL
$27,099.597.84
INVESTMENT IN GENERAL FIXED ASSETS
$27,099.597.84
The accompanying summary of significant accounting policies and notes to the
financial statements are an integral part of this statement.
36
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38
MONROE COUNTY EXHIBIT - I
DISTRICT SCHOOL BOARD
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
June 30, 1979
The significant accounting policies followed by the District School
Board, Monroe County, are described below to enhance the usefulness of the
financial statements to the reader.
Reporting Entity
The governing body of the School District is the District School Board
composed of an elected board with the Superintendent of Schools as executive
officer. Although the District School Board is considered a separate entity for
financial reporting purposes, it is part of the State system of public education
under the general direction and control of the State Board of Education as
prescribed by Article IX of the State Constitution. The District School Board is
also governed by State statutes and State Board of Education Administrative Rules.
Pursuant to State Eoerd of Education Administrative Rules, the
Superintendent of `schools is responsible for keeping records and accounts of all
financial transactions in the manner prescribed by the Commissioner of Education.
Basis of Accounting
The accounts pre maintained and financial statements are nrenared on the
nodieied accrual basis of accounting, except that depreciation is not recorded.
Under the modified accrual basis, revenues are recorded as received in
cash except for (1) revenues susceptible to accrual and (2) revenues of a material
amount that have not been received at the normal time of receipt. ixpenditures
are generally recorded when otligetions are incurred or when benefits are received.
Fund Accounting
In order t, ensure ooservance of limitations and restrictions placed on
the use of the resources available to the District School Board, the financial
records and accounts of the District School Board are maintained in accordance
with toe principles of "fun° accounting". This is the procedure by which resources
for various purposes are classified for accounting and reporting purposes into fends
that are in accordance with activities or objectives specified. Separate accounts
are maintained for each fund; however, in the accompanying financial statements,
certain funds that have similar characteristics have been combined into fund groups.
Accordingly, financial transactions have been recorded by fund group where appropriate.
39
EXHIBIT - I MONROE COUNTY
(Continued) DISTRICT SCHOOL BOARD
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
June 30, 1979
The funds used are defined as follows:
General Fund. This fund is used to account for resources that are
available for the general financial requirements of the District School
Beard, the only restrictions being those imposed by law and the budget.
Generally, they are resources received tc finance the educational programs
of the District School Board as a whole. The organizational units financed
through this fund are those which are directly concerned with the operation
and supoort of the educational program.
Special Revenue Funds. This fund group is used to account for resources
that are available for the operation and support of the educational program
but are restricted by the donors or other outside agency as to the specific
purpose for which they may he expended. The organizational units financed
through this fund group are usually the same as those "inanced through the
General Fund.
Lebt Service hinds. These funds are used to account for the resources
whic'- will be used 'o retire tie 'my-term debt of the flis trict School Board.
Canital Projects Funds. These ' undo are used to account for the resources
that are available for the acquisition or construction of physical property to
he used for District School _oaro our-eses ar'd resouroes designated for the
major repair or replacement or District 'chool Board property. These funds are
es...ricted r tend resolution liuitatinns and generally cnn be expended only
for nroiects approved by a State innnrtment, of 'location s '^vey and project
priority list. These projects include the purchase of land, site development,
building construction costs, initial furnishings and equi• ment for new buildings,
and major repairs.
General Fixed A. sets. This self-balancing group of accounts is used to
provide a record of fixed assets curried by the District School Board. Fixed assets
purchased :order lease-purchase agreements are entered in this group after the
last payment is made.
General Long-Term Debt. This self-balancing group of accounts is used to
account for the general long-term debt of the District School Board.
40
MONROE COUNTY EXHIBIT - I
DISTRICT SCHOOL BOARD (Continued)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
June 30, 1979
Employee Leave Accrued
Contingent liabilities exist for accrued annual leave. The accrued
annual and sick leave will be taken by employees or will become nayahle upon
termination of employment ns provided in the Board's leave policy and
contingent upon available funds. Amounts are not reported on the balance sheet
for these contingent liabilities.
Retirement System
Eligible employees of the Board are members of one or more retirement
plans administered by the State of Florida, Department of Administration.
There plans call for contributions by the employees and/or the hoard at a
stated percentage of compensation dependent upon the individual plan.
41
EXHIBIT - J MONROE COUNTY
DISTRICT SCHOOL BOARD
NOTES TO FINANCIAL STATEMENTS
June 30, 1979
1. The first-in first-out method is used in pricing tee food, nonfood, and
small equipment in the ford service inventory. The weighted average
method is used in pricing the stores and distribution inventory and the
gasoline and oil inventory. The last invoice cost is used for pricing
the transportation, maintenance, textbook, and mimeograph supplies
inventories.
2. Physical plant and equipment are recorded at the date of acquisition at
cost or appraised value. Land donated in prior and current periods is
recorded at fair market value at the time of donation. Some items of
equipment acquired from the Department of General Services, Division of
Surplus Property, have title restrictions. Some land and buildings
acquired from the United `states of America through the Department of
Fralth, Education, and Welfare have deed restrictions. Depreciation on
physical plant and equipment is not recorded.
3. The "Reserve for Encumbrances" is an amount that is segregated from the
fund balance and represents obligations in the form of purchase orders
or contracts which are not liabilities but which are commitments charge-
aFle tr future periods when materials or services are received.
It. State funds for current operations were received primarily from the Florida
Education Finance 'rogram (FEFP) administered by the State Department of
Education. Allocations were made by the State Department of Education
based mainly on reports of full-time equivalent students submitted during
the current Year by the District Sc-col Board. The current year's allocation
is subject to adjustment in subsequent years by the State Department of
education for reporting er-ors and other factors. Any adjustments for
allocations received during the current year may be made in subsequent
years' allocations.
5. Bonds payable of $2,925,000 represent the Beard's portion of bonds sold
through the Department of Education on behalf of specific community colleges
and district school boards. A portion of the future allocations of the
3oard's Capital Outlay and debt Service funds nrovided by the State from
legally obligated moneys for such purposes is pledged as revenue to secure
the issues. The responsibility for the principal and interest payments and
reserve requirements for the State Board of Education Bonds was administered
by the State board of Education and the State ward of Administration.
Details on these bonds are as follows:
42
-1481113/483/484
MONROE COUNTY EXHIBIT - J
DISTRICT SCHOOL BOARD (Continued)
NOTES TO FINANCIAL STATEMENTS
June 30, 1979
Original Issues Principal
Issue balance
3 750,000 Bonds Dated June 1, 1962 $ 160,000
2,990,000 Bonds Dated January 1, 1974 2,765,000
Total 82,925,000
The maturity dates of the bonds range from January 1, 1980 to
January 1, 1995, and the interest rates vary from 3.25 percent to
a 5.5 Percent.
Bonds payable of 3900,000 represent special act certificates of
indebtedness dated June 1, 1966, maturing from the nr 'sent to
June 1, 1991. The original total issue was :01,500,000 with
interest rates from 5-1/2 nercent to 4-5/8 Percent.
6. The amount shown as judgements nayable of 815,000 represents the
balance of money awarded by the Legislature in Chanter 70-914,
Special Acts cf 1970. The original amount was E70,000 payable in
annual increments of T5,000 each from the General Fund, following
an initial payment of 610,000.
7. Adjustments to fund balances of the Capital Projects Funds shown on Exhibit
E-3 represent underreported and overreported expenditures prior to July 1, 1978.
43
MONROE COUNTY EXHIBIT - K
DISTRICT SCHOOL BOARD
STATEMENT FROM AUDITED OFFICIAL
For the Fiscal Year Ended June 30, 1979
Audit
Report
Paragraph The Superintendent's response to the audit findings included in this
Number report is as follows
(b) As of July 1, 1980, prenumbered receipt books (in trip-
licate instead of duplicate) are assigned by the Finance
Department to the Vocational Adult Education Department
for the collection of fees for adult education courses ,
sale of books , and collection of fees for GED tests . As
these books are used up, they are returned to the Finance
Department (containing the third copy of the receipt) to
be reconciled.
(12) Under the circumstances at the time, no official request
was made to the State Department for late submission of
the Budget for 1978-79. Attached are letters indicating
the procedure that was followed. (See Attachment A. )
(22) The School Board has deemed it a wise investment over a
period of years to improve the skills and competencies
of all its administrators , principals , and central office
staff, including the superintendent. In order to be able
to implement its management design system (School-Based
Management) the School Board has expended $564,062. 00
over a period of five years for Staff Development. (Most
of these dollars have been obtained through state and
federal grants . )
The School Board has also established provisions for its
instructional personnel to take sabbatical leave for
professional improvement.
It was the desire of the Board to assist the superinten-
dent in defraying the expense of the tuition to further
his education by earning a Ph.D. , thus increasing his
effectiveness to serve the Board.
As a holder of a continuing contract as an instructional
person with the Board, the superintendent would have been
eligible for sabbatical leave and financial support as a
teacher or administrator. However, it was not feasible
to consider a sabbatical considering the nature of the
superintendency and the fact that the law requires the
position of Superintendent of Schools to be a full-time
job.
44
EXHIBIT - K MONROE COUNTY
(Continued) DISTRICT SCHOOL BOARD
STATEMENT FROM AUDITED OFFICIAL
For the Fiscal Year Ended June 30, 1979
Audit
Report
Paragraph
Number
The doctoral program in which the superintendent was in-
volved was tailor-made for practicing school executives
who could not absent themselves from their duties for
long periods of time. The Board recognized this program
as one which was practical and which would improve the
superintendent' s effectiveness and efficiency and agreed
to underwrite the tuition expense as a legitimate staff
(22) development activity.
Further, there are no Florida Statutes or State Board
Rules , etc. which prohibit the Board from paying tuition
for the superintendent. In addition, under Home Rule,
the Board is empowered, in the absence of any law, rule ,
or regulation, to implement staff development activities
for the improvement of the educational program of the
District.
(26) As we have noted in prior audit statements , additional
fireproof cabinets had not been provided in the Personnel
Department based on the recommendation originally made by
the Supervisor of Maintenance that due to the construction
and condition of the second floor of the former Adminis-
tration Building the second floor would not support the
weight load of additional cabinets .
Now that we have moved into our new Administration Build-
ing, we have issued purchase orders for seven (7) addi-
tional cabinets which will provide the proper storage for
the personnel records.
(27) As of December 1980, purchase orders are issued for all
products put out on bid: miscellaneous groceries , non-
food, and frozen food. Fresh fruits and vegetables and
eggs are ordered directly by school food service managers ,
thus , it is unnecessary and impractical to issue purchase
orders in this case .
(28.1) Fertilizer was purchased on Voucher #8091 at a total cost
of $3, 686. 55. This purchase was made in error due to a
cost increase per pound of fertilizer which was not
computed into the reorder of this material.
45
MONROE COUNTY EXHIBIT - K
DISTRICT SCHOOL BOARD (Continued)
STATEMENT FROM AUDITED OFFICIAL
For the Fiscal Year Ended June 30, 1979
Audit
Report
Paragraph
Number
(28.2) Purchases for asphalt roof shingles , framing lumber, and
plywood, were made for various renovation projects at the
Trumbo Administration Complex. Quotes were called for
from vendors for these materials at the beginning of the
renovation work. These purchases were spread over a
period of almost two years. At no time did any one pur-
chase order exceed $3,000.
(28.3) Liquid propane gas is supplied by Public Gas Company
(sole source) to the Middle and Upper Keys , beginning
with Marathon, Florida. For many years the only source
for propane gas in the Lower Keys was Key West Gas Company,
now known as Texgas and the company which presently
supplies gas in the Lower Keys. Not only does this company
supply the gas , but does all repair and maintenance re-
quired at no additional cost. (All gas tanks are owned by
the company. ) We do not feel that it would be feasible
to change the current system for the purchase of this
utility by calling for bids annually, resulting in re-
placing tanks and additional cost to the District for
deposits for these tanks as required by the companies .
(29) It has been customary for the District to issue purchase
orders when contracting with consultants . This procedure
has been in practice for several years and has not been
cited in any previous audits . However, reference is now
made to payments to consultants through purchase orders
which did not describe the services in sufficient detail
to permit a determination to the extent to which services
actually were received. A recommendation was made that
all consultant services be purchased pursuant to written
agreements which describe the services to be provided in
sufficient detail as to permit a comparison with service
actually received, together with the terms and amount of
compensation for consultant services .
To that end, the attached AGREEMENT FOR CONTRACTED CON-
SULTANT SERVICES has been devised which requires a des-
cription of the services to be performed and the amount
and terms of compensation. This document will be executed
46
EXHIBIT - K MONROE COUNTY
(Continued) DISTRICT SCHOOL BOARD
STATEMENT FROM AUDITED OFFICIAL
For the Fiscal Year Ended June 30, 1979
Audit
Report
Paragraph
Number
and attached to each purchase order for consultant services
and payment will be made upon a request for payment in
(29) accordance with this agreement. We feel that the execution
I of this agreement will provide the information cited as
1 lacking in the audit report. (See Attachment B. )
(30) Reference is made to payments to the law firm of Muller,
Mintz, Kornreich, Caldwell and Casey, P.A. , for profes-
sional fees ($3, 910) and expenses ($487 . 15) incurred in
behalf of the Board and billed on two separate invoices .
These payments were for professional services rendered
in connection with negotiating a collective bargaining
contract between the Board and the United Teachers of
Monroe for the 1978-79 school year.
Invoices supporting the payment of professional fees for
$2, 140 and $1, 770 did stipulate the date and a brief des-
cription of the services provided, e.g. , legal research,
negotiations , draft contract , conference with client.
While the invoices did not specifically show the number
of hours consumed nor the rates charged, the action by
the Board in employing this firm specified a rate of $50
an hour for services rendered. Utilizing this amount,
the firm' s bill for professional services reflect 78-1/4
hours of work connected with negotiating the aforemen-
tioned contract .
The expenses billed on invoices for $205. 47 and $281. 68
were detailed by date and description but did not contain
documentation in the form of copies of bills, plane
tickets , etc.
In order to improve this situation, the superintendent
contacted the firm by telephone, followed by written
correspondence, requesting the firm to revise their bill-
ing'procedure. Attached are copies of correspondence and
subsequent billing by the firm in a format which does
provide a breakdown of the time involved for each item
and a total billing on an hourly basis . (See Attachment C. )
47
MONROE COUNTY EXHIBIT - K
DISTRICT SCHOOL BOARD (Continued)
STATEMENT FROM AUDITED OFFICIAL
For the Fiscal Year Ended June 30, 1979
Audit
Report
Paragraph
Number
(31) This was a request by the schools in the Upper Keys with
services contracted for by the three schools involved to
provide psychological testing and services . Reports
specifying the services were provided to each respective
school but were not forwarded to the district office.
Approval for payment of invoices submitted by the Guidance
Clinic to the District were approved by the principal of
the respective school.
As of 1979-80 school year, these services were no longer
requested by the School Board and are being provided by
the full time School Board employees .
(32) The comment made by the auditor with reference to per diem
allowances being paid in excess of amounts allowable, we
feel, results from the manner in which the travel period
is computed by the auditor versus the manner in which it
is computed by the Finance Department.
We reimburse on quarters as per Florida Statute 112. 061
(2) (i) :
12 : 00 Midnight - 6:00 A.M.
6 :01 A.M. - 12 : 00 Noon
12 : 01 P.M. - 6:00 P.M.
6 :01 P.M. - Midnight
We have on numerous occasions paid individuals for the first
quarter, computing this based on the travel voucher which
indicated departure at 6 : 00 A.M. , which is still part of the
first quarter. Although we feel our system of computing per
diem allowances to be correct , we will change our procedure
to comply with the auditor' s request.
Mention was made of reimbursement for telephone charges .
Although we do verify with the individual the purpose of
such calls , in the future we will document the purpose for
each call.
(34) In the future when payments are made for travel expenses
prior to the dates on which travel is actually made, a
new procedure has been implemented whereby a written
travel report will be submitted to the Finance Department
showing actual travel time, dates , and amounts .
48
EXHIBIT - K MONROE COUNTY
(Continued) DISTRICT SCHOOL BOARD
STATEMENT FROM AUDITED OFFICIAL
For the Fiscal Year Ended June 30, 1979
Audit
Report
Paragraph
Number
(35) Reference is made to a principals ' workshop conducted at
the Ocean Reef Club in Key Largo during August of 1978
and a registration fee of $25 charged to each employee
who attended. During the course of the recent audit
period, it was pointed out that documentation, invoices
and receipts had not been obtained for the services pro-
vided and the propriety of the fee was questioned. Upon
reviewing the situation, all of the employees who attended
the workshop were contacted and the $25 registration fee
was reimbursed to the Board.
(36) At present all credit cards are received through the mail
by the Transportation Department . They, in turn, assign
certain ones to the Maintenance Department which, in turn,
has a list to whom these cards are issued. The Finance
Department has been instructed to request all companies
to forward all credit cards to the Finance Department.
This department, in turn, will have a master list of all
cards issued to various departments and a record from
them as to whom these cards are issued.
(39) School Food Service is in the process of changing over to
the computer system used by the Finance Department and all
_[
School Food Service reports will be prepared from the
computer printout to reflect same totals as in the Super-
intendent' s Annual Report .
As of January 15, 1981, we were able to consolidate all
support personnel in the Trumbo Administrative Complex.
(41) Financial transactions are batched and processed for the
Computer Room by personnel in the Finance Department.
Although all transactions are not signed or approved by
the director in charge, all entries and transactions are
verified when returned to Finance from the Computer Room.
The person verifying these entries is one other than any
of those processing the batches .
In addition to the above procedure, all transactions to be
recorded in the Board' s accounting system will be approved
by the administrator in charge.
49
MONROE COUNTY EXHIBIT - K
DISTRICT SCHOOL BOARD (Continued)
STATEMENT FROM AUDITED OFFICIAL
For the Fiscal Year Ended June 30, 1979
Audit
Report
Paragraph
Number
(42-43) With the advent of the completion of the bus garage in the
new Trumbo Administrative Complex, adequate space has been
provided for storage of parts , tools and other stock items
and will insist that in the Transportation Department
corrective procedures be implemented to properly maintain
the inventory records . This will also be carried out in
the Maintenance and School Food Service departments .
(45) Beginning with the audit of internal accounts for year
1979-80, the certified public accountant provided the
Board with a written audit report. Together with this
report the CPA submitted a signed written report for
each respective school or department disclosing any
irregularities or failure to comply with SBE Rules and
School Board Policies .
Upon receipt of the audits for the schools , the superinten-
dent directed all school principals who were affected, to
take corrective action immediately and complimented those
school principals where there were no citations. Staff
from the Finance Office Division has been instructed to go
into the schools and assist office personnel in making
necessary corrections of the irregularities cited in the
CPA' s audit report .
As of this date, all schools have been visited by the
Finance Department' s staff to assist in making corrections
and, further, to make recommendations and verify that SBE
Rules and School Board Policies are being implemented in
each school and department in the District.
(46) Sugarloaf, Switlik, Key Largo and Plantation schools have
breakfast surveys on file. Marathon High is the only
school lacking such survey records. Results of the exist-
ing surveys do not appear to have been presented to the
Board.
Prior to the beginning of 1981-82 school year, school
surveys will be presented to the Board for scrutiny and
approval.
(47.1) Where a roster system is used, prenumbered receipts are
unnecessary and would be unmanageable.
50
EXHIBIT - K MONROE COUNTY
(Continued) DISTRICT SCHOOL BOARD
STATEMENT FROM AUDITED OFFICIAL
For the Fiscal Year Ended June 30, 1979
Audit
Report
Paragraph
Number
(47:2) Subsequent to the audit verbal findings , duties of
collecting cash and reporting food sales are assigned to
different personnel; in the cases where the cashier
completes a record of receipts , cash and receipts are
always checked by at least the manager and often one other
person.
(47.3) Not all schools currently have cash registers , but School
Food Service is in the process of planning for them for
all sites .
(49) Prices are currently cited in the Board approved agreement
between TYME and School Food Service. The preschool pro-
grams at Wesley House, TYME and Grace Jones in Marathon
are federally-funded programs . Since the majority of these
students will be in the public schools eventually, we feel
that we should provide them meals at the same cost as of
that in the regular K-12 programs.
(51) CETA subgrants awarded to the District School Board of
Monroe County. Audit statement, "We recommend that the
Board make better efforts in the future to comply with
requirements for proper procedures and records to support
expenditures from CETA funds. "
As a result of federal audits and state audits, questioned
costs and questioned procedures have been noted. These
audits are necessary in order to safeguard assets and
materials from unauthorized use and disposition. Let it
be duly noted that we have attempted to do this to the
best of our abilities and capacities . We believe these
efforts have provided reasonable , but not absolute assur-
ance, that Federal regulations , Department of Labor dir-
ectives , State Administrative procedures , Department of
Education regulations , South Florida Employment and Train-
ing Consortium policies and procedures have been followed.
Understandably, errors can result, especially from mis-
understanding of instructions , lateness of directives ,
short-fused deadlines , mistakes in judgment, and the con-
tinuous changes in these rules and regulations and
changing conditions of our economy (especially Monroe
County from 1973 to the present) .
51
MONROE COUNTY EXHIBIT - K
DISTRICT SCHOOL BOARD (Continued)
STATEMENT FROM AUDITED OFFICIAL
For the Fiscal Year Ended June 30, 1979
Audit
Report
Paragraph
Number
Attachment D to this reply further indicates that the
overall effort has improved as we become experienced and
knowledgeable of the administrative requirements , control
procedures and audit requirements. We welcome audits and
appreciate the recommendations they make to us , but it
must be remembered that audits are a "hindsight" proce-
dure and a review of the administrative "battle" when it
is over. Planning and management are futuristic and many
(51) times filled with unknown adversaries and situations .
CETA audits are a "life and death" economic situation.
There is no room for error (as there are in some other
federal programs) . A 100% right in decision making is
required. There is no forgiveness for error.
We feel that the attached chart will show that we (the
school system, the community and especially the youth)
have received many benefits , with minimal wounds (none
fatal) from the CETA program. We will continue to im-
prove our efforts. (See Attachment D. )
(54) The 1980-81 District Summary Budget reflects a permanent
transfer from Debt Service Fund to Operating Fund in the
amount of $205,468. 17. This amount represents the total
of $179 , 847. 23 mentioned in the Preliminary and Tentative
Findings , plus interest earned in the amount of $25 , 620. 94.
Attached is a copy of Resolution #98 adopted by the Board
February 23, 1981. (See Attachment E. )
52