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Lack of staff auditor complicating completion of comprehensive annual financial report in a timely manner

STUART – The Martin County School Board is finding it complicated to meet crucial financial deadlines in the light of its staff accountant jumping ship earlier this year.

School Board Chairwoman Christia Li Roberts reminded her fellow Board members that a definitive deadline for submitting financial information would soon loom over their heads if they didn’t decide soon on an outside accounting firm to conduct a necessary internal audit.

“As you all know, our internal auditor is no longer with us,” she said. “What this boils down to is in order to create our CAFR [comprehensive annual financial report] for our financial reports, we needed to have an internal audit done with the preliminary information available by Aug. 20 and the final report done by Sept. 20.”

Chairwoman Roberts had previously asked District Purchasing, Warehouse, and Reprographics Director Justin Sage to do an informal survey of accounting firms able to perform the necessary audit.

“This was what we received back,” he said, referring to a short list of firms he had distributed to the Board. “This was not a formalized bid process by any means, it was just going out and soliciting information. I don’t have a recommendation to make of this. It was just for informational purposes for the Board to review and determine what were the appropriate next steps in the absence of an in-house internal auditor.”

When District 2 Board Member Marsha Powers asked the chairwoman if she needed a motion to put the internal audit out to bid, Ms. Roberts insisted the time was past for such a lengthy process.

“No, we’re looking to make a motion to award the internal audit to one of these contract firms for this year,” the latter said. “We asked the staff to check and see what other districts are using contract people and to ask qualified local people who would be able to do this. It’s my understanding that we don’t have time to create a bid package and go out to bid etc. because these things need to be done [by a specific deadline], unless you don’t want to do a CAFR this year.”

Both Ms. Powers and Ms. Roberts asked Superintendent Laurie Gaylord if she had a recommendation from the list of prospects, but she tossed the ball back into the School Board’s court.

“Well this is a Board employee,” Ms. Gaylord said, referring to the staff auditor position. “So, absent the fact we don’t have an employee, this was brought back so the Board could make a determination in what you wanted to do.”

District 3 Board Member Victoria Defenthaler wanted to know the specific parameters of the proposed contract period.

“So, you’re saying it would just be from now through the end of the year?” she asked.

“It’s just for the CAFR,” Ms. Powers responded.

Chairwoman Roberts then asked Chief Financial Officer Audra Curts-Whann for further clarification.

“It’s just this internal audit, correct Audra?” she inquired. “It’s just the internal audit so that the CAFR would be able to be prepared?”

Ms. Curts-Whann’s response, however, didn’t prove to be cut and dry and hinted at the pile of financial data that still required auditing in the near future.

“I do not know what the Board’s intention is with this, but there are three audits that your former internal auditor told me needed to be completed,” she explained. “The Internal Accounts Audit, the Driver’s Ed audit, the Dory Slosberg Audit, and the Community Broadband Network Audit and/or review that is done at the county level. So those three are the tasks that would need to be performed by someone with a CPA designation and reports issued for you.”

Chairwoman Roberts admitted she had also met with the District’s resigning accountant and believed some of that work could still be put on the back burner.

“I met with him before he left, and the other two [audits] – the Dory and the CBN – don’t have the urgency that this has, mainly because you need this information for the CAFT by a specific date.”

The chairwoman then asked if there was a motion, offering to pass the gavel to District 5 Board Member Michael DiTerlizzi so she could make one herself. Board Member Powers then asked who Ms. Roberts was considering for the assignment.

“I was looking at MSL CPAs & Advisors because they’re giving a lump sum fee of $12,000 for a CAFR, and they’ve done services for Brevard, Broward, Escambia, Lee, Manatee, Oceola, Seminole and Florida Virtual School,” she said.

Ms. Powers said she’d not seen any other responses, and Chairwoman Roberts insisted the statewide firm was the lowest of the two proposals on the table.

“The one from [Stuart-based] Carr, Riggs & Ingram is $15,000,” the latter explained. “You can also buy services from them, or you can just buy the CAFR piece.”

The District CFO then returned to the podium with a concern.

“The report that’s coming out of internal accounts is not a CAFR: The CAFR is what we prepare as a district,” Ms. Curts-Whann insisted. “I’m concerned that they misinterpreted what you are asking for them in total services. This is an internal accounts only audit; it is not a comprehensive annual report for this district, and I’m wondering if they are misspeaking in this quote. I’m just concerned that they’re not sure what the scope is.”

For his part, Board Member DiTerlizzi offered his fellow Board members an alternative, asking whether they’d consider temporarily borrowing the services of one of Martin County’s staff accountants.

“I know they have internal auditors, and maybe they can offer us a service in the interim for these smaller internal audits,” he said. “I know they used to have a clerk that audited different departments at the county, so as a temporary solution, I’m thinking maybe that might work.”

Ms. Curts-Whann shot that idea down, however, due to the need for an accountant with familiarity with school board operations.

“Hiring an internal auditor from another governmental body that’s not familiar with the operation of school districts may not be your best course of action, especially to get something done as quickly as we are asking them to do it,” she emphasized. “It will have to be done in the month of July to August and finished by mid-August for me to make my timelines.”

Ms. Powers subsequently made a motion authorizing Superintendent Gaylord to negotiate with MSL CPAs & Advisors for the project with a cap of $15,000 for the work, which was seconded by Ms. Defenthaler and passed unanimously.

That decision pleased the CFO.

“I believe that doing a maximum authority to approve should give her the ability to negotiate with them and get what you need done in a timely fashion,” Ms. Curts-Whann said.

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