Ever wonder what the auditors are going to ask you for this year? Does it ever seem like they always ask for the one thing you don't have done, don't have handy, or just plain don't have? It’s not a plot to "catch you." We thought we’d give you a heads up with some of the most common items we’ll be asking for — just so you can start to think about them.
1. Semi-Annual Certifications and PAR Forms for Federally Funded Employees — You know we need them!
2. Maintenance of Effort information — Although testing was done by ISD for the prior year, we’ll still need to see the data you have to show that (1) you passed or (2) you have some valid exceptions. We still expect ISD wide testing, but each district should track their activity separately.
3. Food Service Activity — Indirect costs have become quite the topic of discussion. So, we’ll be asking if you’ve received any communication from the Michigan Department of Education (MDE) about your indirect charges and whether any adjustments were made.
Additionally, we’ll be asking about your free and reduced lunch activity to see if you are (or could be) participating in the Community Eligibility Option (CEO) portion of the School Lunch program. This program allows all students to receive a free breakfast and lunch in those buildings where 40 percent of more of the students are directly certified as being in poverty. Districts that have been in this program are still tracking free and reduced qualification, even if the entire building is now a free lunch building, since this data is still needed for the Title I and At risk funding formulas.
4. Tax Tribunal Payments and Allocations — We’ve seen more activity here than ever before (I know, we don't have to tell you this!). So, we’ll be asking for information on the magnitude of checks you’ve written, how much has been recouped through State Aid, and how you’ve allocated amounts to your debt funds.
5. Employee Cost Structure — Since last year’s audit, compensation and benefit costs expended by the district have likely changed significantly. The increase in MPSERS costs, health care rate changes, implementation of 90/10, and or 80/20 – cap, and compensation structure are all areas where significant change may have occurred. Districts should consider summarizing what changes occurred in these areas, when they occurred, and the expected impact on the June 30, 2012 financial results. Audit teams will consider these changes when completing audit tests in these areas.
6. Federal Programs — ARRA is in the wrap-up phase in 2011/12. The size of the ARRA funding will impact what programs audits will need to test. Providing a preliminary SEFA to the audit team will aid them in making sure that only the programs that require testing will be tested. If significant changes occur between the preliminary SEFA and the final, it’s possible that more programs will need to be tested or that programs tested were unnecessary. Taking time in the preliminary stage will save time later!
7. Outsourcing, Shared Services, etc. — Since these items can have an accounting impact, we’ll be asking what’s changed this year so we can help to make sure the accounting is correct.
We are here to help you address any items where you have questions. Just give us a call!