Auditor General Update November 2015 1
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Auditor General Update
November 2015
1
AG Organizational Changes
Sherrill Norman, Auditor General
Greg Centers, Deputy Auditor General
Jim Stultz, Audit Director
Doug Conner, Audit Supervisor,
School Board Financial and Federal Awards Audits
Micah Rodgers, Audit Supervisor, School Board Operational Audits
e-mail: [email protected]
2
What’s New on the
Auditor General Web Site?
District School Board Compliance Supplement 2014-15
AG Rules including Chapter 10.800 District School Board Audits
Schedules of Employer Allocations and Pension Amounts by Employer for the FRS and HIS FYE 6/30/14
Recently released audit reports, including Significant Findings and Trends
3
OMB Uniform Guidance
2 CFR 200
Replaces A-87, A-102, A-133, and other OMB circulars
Requires written procedures for procurementand cash management
Requires internal controls in compliance with guidance from Comptroller General of the United States (http://www.gao.gov/products/gao-14-704G) or COSO (http://www.coso.org/ic.htm)
4
OMB Uniform Guidance
2 CFR 200
Revises the threshold for programs to be audited:
Type A Programs
Increased from $300,000 to $750,000 in expenditures
Audit Coverage:
Low risk entities from 25% to 20%
High risk entities from 50% to 40%
5
Recurring Findings
Annual Notification
Sections 11.45(7)(j) and 218.39(8), Florida Statutes, require the Auditor General to notify the Legislative Auditing Committee of any audit report that indicates a district school board has failed to take full corrective action in response to a recommendation that was included in the two preceding audit reports.
6
School District
Budget Transparency
Section 1011.035, Florida Statutes, requires each district school board to post on its Web site a plain language version of each proposed, tentative, and official budget describing each budget item in easily understandable terms.
7
Significant Financial Trends
At June 30, 2014, school districts Statewide had an average financial condition ratio (General Fund total assigned and unassigned fund balance as a percentage of General Fund revenues) of 9.69 percent, which represents a 0.93 percentage point decrease compared to the average financial condition ratio in the prior fiscal year.
8
Average Financial Condition Ratios of School
Districts for Fiscal Years Ended
June 30, 2010, Through June 30, 2014
1.00%
3.00%
5.00%
7.00%
9.00%
11.00%
13.00%
15.00%
2010 2011 2012 2013 2014
11.89%
14.47%
12.24%
10.62%9.69%
Average Financial Condition Ratio
Average Financial Condition Ratio
9
Significant Financial Trends
Of the 67 school districts, 5 had ratios that were below 3 percent at June 30, 2014. In these circumstances, these school districts had significantly less resources available for emergencies and unforeseen situations than other school districts.
The number (5) of districts with ratios below 3 percent is the same number reported at June 30, 2013.
10
Number of School Districts with
Financial Condition Ratios Below and Above 3 Percent
for the Fiscal Years Ended June 30, 2010 Through June 30 2014
62
62
64
66
64
5
5
3
1
3
0 10 20 30 40 50 60 70
2014
2013
2012
2011
2010
Below 3 Percent
Above 3 Percent
11
12
School Districts with
Financial Condition Ratios
Below 3 Percent
Financial Condition Ratios -
Fiscal Year Ended
June 30, 2014
Number of
Consecutive Years
Ratio Below 3%
2.24% 2
2.84% 1
2.92% 1
1.86% 1
2.82% 15
School
Districts
3
1
2
4
13
School Districts with Enrollment Growth
From 2009-10 to 2013-14 Fiscal Years
1 Orange 13,774 8 St Johns 3,626
2 Hillsborough 9,537 9 Duval 3,580
3 Palm Beach 8,513 10 Manatee 3,541
4 Miami-Dade 6,843 11 Polk 2,964
5 Lee 6,650 12 Collier 1,573
6 Osceola 5,780 13 Okaloosa 1,173
7 Broward 5,567 14 Bay 1,109
School Districts and Increases
14
School Districts with Declining Enrollment
From 2009-10 to 2013-14 Fiscal Years
Decrease
2009-10 2013-14
1 Pinellas 104,306 102,251 (2,055)
2 Brevard 71,592 70,071 (1,521)
3 Volusia 62,061 60,935 (1,126)
4 Citrus 15,768 14,675 (1,093)
Unweighted FTE
Number of
School Districts
FEFP Funding
Base Florida Education Finance Program (FEFP) allocation per FTE student:
2012-13 FY - $3,582.98
2013-14 FY - $3,752.30 ($169.32 Increase)
2014-15 FY - $4,031.77 ($279.47 Increase)
15
16
Financing Obligations
COPS
Dist Rev Bonds
SBE Bonds
QSCBs
QZABs
BABs
Gen Ob Bonds
Other Long-term Debt
17
$0
$1
$2
2010-11 2011-12 2012-13 2013-14
ARRA & Other Federal Stimulus Expenditures
In Billions
18
Statewide Revenues – All Governmental Funds
2012-13 and 2013-14 Fiscal Years
(In Millions)
Percent
2012-13 2013-14 Increase/ Increase/
Governmental Fund Type Amount Amount (Decrease) (Decrease)
General Fund 18,383$ 19,574$ 1,191$ 6.48%
Other Funds 6,156 6,431 275 4.47%
Total 24,539$ 26,005$ 1,466$ 5.97%
19
Statewide Revenues by Source – All Governmental Funds
2012-13 and 2013-14 Fiscal Years
(In Millions)
Percent2012-13 2013-14 Increase/ Increase/
Sources Amount Amount (Decrease) (Decrease)Federal 3,117$ 3,218$ 101$ 3.24%State 9,838 10,858 1,020 10.37%Local 11,584 11,929 345 2.97%
Total 24,539$ 26,005$ 1,466$ 5.97%
20
Statewide General Fund Revenues by Source
2012-13 and 2013-14 Fiscal Years
(In Millions)
Percent2012-13 2013-14 Increase/ Increase/
General Fund Amount Amount (Decrease) (Decrease)
Federal 129$ 139$ 10$ 8.01%State 9,641 10,615 975 10.11%Local 8,614 8,820 206 2.39%
Total 18,383$ 19,574$ 1,191$ 6.48%
21
Percentage of Statewide General Fund Revenues from
Federal, State, and Local Sources
for 2009-10 Through 2013-14 Fiscal Years
46.45%
54.04% 50.04%
49.43% 45.06%
52.95%
45.31% 49.33%
49.85% 54.23%
0.65% 0.63% 0.72% 0.70% 0.71%
-10%
0%
10%
20%
30%
40%
50%
60%
2009-10 2010-11 2011-12 2012-13 2013-14
Local
State
Federal
22
State Capital Outlay Appropriations
for 2009-10 Through 2013-14 Fiscal Years
(In Millions)
$33
$18
$18
$150
$74
$91
$55
$55
$56
$57
$0 $50 $100 $150 $200
2013-14
2012-13
2011-12
2010-11
2009-10
Charter School Capital Outlay Funding
Total Capital Outlay Funding Excluding Charter Schools
23
Fund Balances of the General Fund for the
Fiscal Years Ended June 30, 2010, Through June 30, 2014
(In Millions)
$2,271
$2,318
$2,572
$3,005
$2,380
$1,863
$1,928
$2,063
$2,542
$1,922
408
$389.8
$508.8
$462.8
$458.3
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500
June 30, 2014
June 30, 2013
June 30, 2012
June 30, 2011
June 30, 2010
Total Reserved (June 30, 2010) or Nonspendable/Restricted/Committed Fund Balance
Total Unreserved (June 30, 2010) or Assigned/Unassigned Fund Balance
Total Fund Balance
Significant Findings
The audit reports for 5 school districts containedno findings.
The remaining 62 audit reports included a total of550 audit findings addressing weaknesses ininternal control; instances of noncompliance withapplicable laws, rules, or regulations; oradditional matters.
24
Significant Findings
Three audit reports included one or morefindings that were considered to be materialweaknesses.
Of the 550 findings included in the 62 auditreports with findings, 93 (17 percent) wererepeated from previous audit reports for atleast 2 consecutive fiscal years. Sections11.45(7)(j) and 218.39(8), Florida Statutes,encourage timely resolution of audit findings.
25
Significant Deficiencies
and Additional Matters
Financial Condition (5)
Information Technology (38)
Record Keeping/Records Management (25)
Cash and Investment Controls (18)
26
Significant Deficiencies
and Additional Matters
Capital Assets Management (7)
Expenditures/Purchasing (43)
Payroll and Personnel (38)
27
Significant Deficiencies
and Additional Matters
Insurance (38)
Capital Construction and Related Expenditures (21)
Adult General Education (20)
28
Significant Deficiencies
and Additional Matters
Virtual Instruction Program (36) Workforce Development (5) Rebates (4) Direct-Support Organizations (4) Food Service Findings (4) Charter Schools (3) Miscellaneous
29
Federal Awards Findings
Federal Awards audited pursuant to Office of Management and Budget Circular A-133.
25 School District audits contained instances of noncompliance, including 5 districts with instances of material noncompliance and material internal control weaknesses related to Federal programs.
30
FY 2010-2014 Findings
31
450
460
470
480
490
500
510
520
2013-14 2012-13 2011-12 2010-11 2009-10
550
504
467
513 518
5
5
12
612
Total Findings MW/MNC Findings
Update on Standard Audit Topics
Sunshine Law
Applicable to advisory and fact finding
committees
Conflicts of Interest
32
GASB Issues
GASB 68 - Reporting requirements
available at http://www.dms.myflorida.com/workforce_operati
ons/retirement/publications/annual_reports -
“GASB 68 Reporting Information”
Amounts/percentages to complete journal
entries are found in AG Audit Report Nos.
2016-021 and 2015-110.
Separate schedules for FRS and HIS
33
Recent GASB Statements
GASB 72 – Fair Value Measurement and Application
GASB 73 - Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68
34
Recent GASB Statements
Statement No. 74 - Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
Statement No. 75 - Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions
35
Recent GASB Statements
GASB 76 - The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments
G ASB Statement No. 77 - Tax Abatement Disclosures
36
GASB Exposure Drafts
Two Exposure Drafts related to OPEB
Accounting and Financial Reporting for Certain External Investment Pools
Blending Requirements for Certain Component Units, an amendment of GASB Statement No. 14
37
Any Questions?
Contact Information:
Douglas Conner
Audit Supervisor - District School Boards
111 W. Madison Street, 412G
Tallahassee, FL 32399-1450
(850) 412-2730
AG Web site: www.myflorida.com/audgen/
38
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