BELLE — During the Jan. 26 Maries R-2 Board of Education meeting, Superintendent Dr. Lenice Basham told members that they could not receive an audit finding from their auditor, Graves & Associates, because they never balanced the 2018-19 school year. She recommended they hire an account and perform an internal audit.

“Because we still have not been able to balance the 2018-19 school year, they cannot give us a finding this year until we fix those,” Basham began. “Until we can figure out how to fix 2018-19, we can’t move on with 2019-20.”

Last year Graves & Associates reported that they found four state findings and one federal finding against the district. They reported it was the “condition of the district’s records and bookkeeping” that resulted in their “disclaimer of opinion.”

The district attributed the missing information to their data system crashing, new software and employee turnover.

“There were several issues regarding the 2018-2019 audit,” Basham said. “The district’s long-time bookkeeper retired in September 2018. Beginning at that time, there were issues with how expenses and revenues in September 2018 to June 2019 were coded in the financial software system that was being used. We have worked in-house since it was discovered in December 2019 but cannot follow the procedures that were used during that time to reconcile the cash balance.  We believe that bringing an internal auditor in to review those accounts will correct the issue.” 

Despite being unable to give an opinion, Basham said there were things that came out of the audit that was good.

“For the past year in 2019-20, our financing on our leases are good, we are down to $855,000 for the funding on loans; $91,000 left on the energy efficiency loans for the air conditioning units; $73,000 on the property, the 10 acres out there; and have made contributions to our teacher’s retirement; our payroll looks good; or taxes look good; transportation looks good, lunch reports look good. We just need to fix the 2018-19 issue so we can verify our numbers,” Basham said. “They did say there is no evidence of fraud, no embezzlement, it’s just poor record-keeping.”

During the 2018-19 audit report, auditors warned that there were possible repercussions from the Department of Elementary and Secondary Education (DESE) that could have included they withholding funding from the district. 

“I have talked to DESE and they do not think it will impact our funding,” Basham said. “We just go under another level of (risk). They do not seem as concerned about it as I think we are.”

Board President Joey Butler II asked about working with the contracted auditors at Graves & Associates.

The district currently has two more years in its contract with Graves & Associates. Board Vice President Dawn Hicks said they made it very clear that they are still under contract when she attempted to call and speak with them.

“I think that once we get this rectified and decide that we want to, we can have our lawyers look at our contract and see about the removal of us from their services looks like,” Basham said. “But I would like to get this cleaned up before we do that.”

Butler asked for a motion to accept the results of the audit. Director Tom Kinsey made a motion and Hicks seconded. It passed with a 7-0 vote.

Basham added that she would like to put out bids for an accountant to help rectify the situation.

“We need someone to help and get advice from,” Basham said. “We need an internal audit to fix the problem in an auditable manner.”

Kinsey asked if they could get a CPA with experience working with school districts. Basham agreed that it would have to be someone who already has that kind of knowledge.

“We have come a long way since the spring of 2019 and Sarah (Rehmert, treasurer and board clerk) has done a remarkable job looking at last year and getting things where they are supposed to be. But we need an accountant to tell the auditor ‘this is what is going on’ and be on the same page,” Basham said.

Hicks agreed, adding that when she spoke with Graves & Associates, they told her the school needed to “bring in the big guns.”

Basham said the system stopped working in September 2019 and they need to go back to June 2019, while the software program only allows the user to go back one month.

The board voted 7-0 to send out bids for an accountant.

Basham said Monday that the sent the bids out for an internal audit.

“The bids received will be reviewed at the February board of education meeting,” Basham said.