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Home My Public Portal AboutBrewster 2012 Public Schools Audit TOWN OF BREWSTER, MASSACHUSETTS BREWSTER PUBLIC SCHOOLS INDEPENDENT ACCOUNTANTS ' REPORT ON APPLYING AGREED-UPON PROCEDURES YEAR ENDED JUNE 30 , 2012 L-9 suorjnpuatuwooax pun soulpuid S—Z sluouroatnboU oountldwoo orgroodS I swnp000.id uodn-p33BV BuixiddV uo jtodog ,slunlun000d luopuodopui 21Ovd SZI�I�ZI�IO� ZIOZ`0£amfir S'IOOHDS aPIgfld HaJ SAA2[2Ig SIJ,aBf1H3VSSVW`2HZSMaHff AO "Ol R. E . BROWN & COMPANY CERTIFIED PUBLIC ACCOUNTANTS P. O. Box 230 - 25 CEMETERY STREET Mendon, Massachusetts 01756 Phone : (508) 478-3941 Fax : (508) 4784779 INDEPENDENT ACCOUNTANTS ' REPORT ON APPLYING AGREED-UPON PROCEDURES To the Honorable Board of Selectmen And Members of the School Committee Town of Brewster, Massachusetts We have performed the procedures enumerated in the attached appendix, which were agreed to by the management of the Town of Brewster, Massachusetts (the "Town ") and Brewster Public Schools, solely to assist you in evaluating the completeness and accuracy of the Town's Massachusetts Department of Elementary and Secondary Education (the "Department ") En&of- Year Financial Report for the year ended June 30 , 2012, and to demonstrate the Town' s compliance with the requirements for preparing that report as specified by the Department. The Town of Brewster and the Brewster Public School ' s management is responsible for the End-of- Year Financial Report for the year ended June 30 , 2012 . This agreed -upon procedures engagement was performed in accordance with attestation standards established by the American Institute of Certified Public Accountants . The sufficiency of these procedures is solely the responsibility of the specified users of the report. Consequently, we make no representation regarding the sufficiency of the procedures described in the accompanying appendix that follows either for the purpose for which this report has been requested or for any other purpose . We were not engaged to, and did not conduct an audit, the objective of which would be the expression of an opinion on the completeness and accuracy of the End-of--Year Financial Report filed with the Department . Accordingly, we do not express such an opinion . Had we performed additional procedures, other matters might have come to our attention that would have been reported to you . This report is intended solely for the information and use of the specified parties listed above and is not intended to be and should not be used by anyone other than those specified parties . S. L 33wwn & &v" an* Certified Public Accountants June 6 , 2013 SPECIFIC COMPLIANCE REQUIREMENTS Schedule 1 - Revenue & Expenditure Summary I . Revenues A . Revenue from Local Sources 1 . Trace Revenues from Local Sources reported on Schedule 1 to the municipal and district accounting ledgers . Also , trace the revenues reported on district's accounting ledgers to revenues reported on Schedule 1 , These amounts should agree . C , D , and E . Revenues from Federal Grants , State Grants and Revolving & Special Funds 2 . Trace the revenue from state aid , federal grants , state grants , and revolving and special funds to the detail in District's accounting ledgers . Also , trace the revenues reported on district' s accounting ledgers to revenues reported on Schedule 1 . These amounts should agree with the possible exception of revenue from state aid, federal grants and state grants , which are entered by the State based on allotments . Determine if the district verified the grant amounts received with the detail posted on the DESE website and pre= populated by DESE . Note : Amounts deposited in legally authorized revolving accounts (e . g . School Choice) cannot be transferred to the General Fund. II. Expenditures A . By School Committee and B . By City or Town 3 , Trace the amounts reported for general fund education expenditures from Schedule 1 line 1850 to the municipal accounting ledgers and to the district accounting ledgers . Also trace the expenditures reported on district' s accounting ledgers to expenditures reported on Schedule 1 . These amounts should agree . If a " crosswalk" exists between the accounting ledgers and the EOYR, verify that the crosswalk agrees with the accounting ledgers in total and trace a sample of expenditures from the crosswalk to the accounting ledger , -2- 1 4 . Trace the amounts reported for a sample of ESE functions (i . e . teaching, principal) , State Objects (i . e . professional salaries (01 ) , other salaries (02) , and other expenditures (04-06) and ESE programs (i . e . regular day , SPED , etc. ) in Schedule 1 to the detail in the accounting ledgers or to the crosswalk, if applicable . These amounts should agree . 5 . Test Extraordinary Maintenance expenditures for the following (4300) . Verify that expenditures do not include salaries . Verify that the expenditures include applicable principal portions of a loan or the cost of a lease/purchase agreement . Verify that expenditures classified as Extraordinary Maintenance (4300) do not exceed the per project dollar limit for extraordinary maintenance ($ 150 , 000) . Trace the expenditures to the detail in the accounting ledgers . 6 . Determine how expenditures for fringe benefits are assigned or allocated to Schedule 1 Employee Benefits " Insurance ( 5100 , 5200) . Trace the reported cost to the detail in the accounting ledgers using the methodology indicated. These amounts should agree . Determine if the district reported Insurance for Retired Employees (5260) separately and appropriately . 7 . Verify that expenditures charged to Line(s) 1683 and 2060 - Short-term Interest (5400) relate exclusively to Revenue Anticipation Notes (RAN's) . 8 . Verify that expenditures charged to Line 1684 and 2065 - Short-term Interest - BAN's (5450) relate exclusively to Bond Anticipation Notes (BAN's) . 9 . Identify expenditures reported as long-term School Construction debt for principal (8100) and interest (8200) . Verify that bond anticipation notes are not included in these functions . Trace the reported costs to the Treasurer' s debt schedule . Trace the reported amount to the detail in the accounting ledgers . These amounts should agree . NOTE : If the district received a lump sum wait list or progress payment from the Mass . School Building Authority, verify that the revenue was reported on line 130 and that expenses were reported for paydown of principal (8100) , or Purchase of Land and Buildings (7100 , 7200) if applicable . -3 - 10 . Trace the expenditures for tuition payments : to other school districts in state (9100) , to out of state schools (9200) , to non-public schools (9300) , to member collaboratives (9400) , and assessments to member regional school districts (9500) to the detail in the accounting ledgers . These amounts should agree . NOTE : If the district prepaid FYI Special Education Tuition , verify prepaid tuition was not included as an FY' 12 expense . If the district prepaid FY' 12 tuition from FYI 1 , that amount should be included as an FY' 12 expense . 11 . For municipal expenditures that result in services directly related to the school committee : a . Obtain a copy of a written agreement between the School Committee and Municipal officials documenting agreed upon methodologies to be used when allocating, distributing or assigning Municipal expenditures to the District. b . Test the amounts reported using the documented methodology . These amounts should agree . 12 . Expenditures from Federal Grants , State Grants and Special Funds a . Determine amounts reported in Column 1 by expenditure classification agree with filed Final Grant Expenditure reports for SFSF and Ed Jobs grants . b . Trace amounts claimed as Circuit Breaker expenses on line 3080 Column 5 to the Accounting ledgers or journals . Schedule 3 13 . For Schedule 3 expenditures . a . Trace the amounts reported by school location on the linked file to the accounting ledgers . These amounts should agree . b . If staff is assigned to more than one school , determine if the District maintains a payroll system or spreadsheet to document the assignment of staff salaries by school location . c . If allocations are used to assign staff salaries to schools , programs , functions or objects , was the allocation supported by a documented methodology? -4- d . If allocations are used for non-salary expenditures , determine if the District maintains a documented methodology for consistency in application . Allocations are acceptable on Schedule 3 for non-salary expenditures although direct assignment or charging is preferable . Schedule 4 14 . Ascertain the methodology used to allocate , distribute or assign SPED costs to the placement on Schedule 4 . Test the amounts reported on Schedule 4 using this methodology . These amounts should agree . Schedule 7 15 . Trace the transportation expenditures reported on Schedule 7 to the transportation expenditures reported on Schedule 1 . These amounts should agree . Determine the methodology used to allocate transportation expenditures on Schedule 7 and verify the accuracy of the allocations . Also if applicable , verify that reimbursable expenditures have been reduced by transportation revenue received from students transported. 16 . Trace the pupils reported on Schedule 7 to the detailed transportation records and verify that the amounts reported on Schedule 7 are accurate and consistent with the detailed records . 17 . Determine if the district' s accounting system separates costs in order to facilitate reporting as outlined in Schedule 7 (In or Out of District, Pre" School , Non-Public, School Choice & Charter School) . 18 . Determine if reimbursable expenditures claimed on Line 4030 (Homeless Outside the District) are supported by adequate documentation . If a cost allocation plan was used to determine reimbursable expenditures , review the propriety of the plan and test the expenditures reported . Schedule 19 19 . Determine if the School District has reported all changes to Schedule 19 Part A . 1 - Appropriation by School Committee to the ESE . Compare the final School Committee Appropriation to Schedule 19 Part A . 1 as filed/ amended to determine if all changes were reported. -5 - FINDINGS AND RECOMMENDATIONS 1 . Finding: Schedule 1 — requirement 2 — In our review of Schedule I School Department Revenue for State Aid, Federal Grants, State Grants, and Revolving and Special Funds as compared to the detail in the School Department' s accounting ledger, we noted the following : • Revenue from the Massachusetts School Building Authority Construction Aid (annual contract revenue) on line 130 in the amount $ 544, 696 was reported on column 5 (Other) in error . This amount should have been reported on column 2 (Contract) . • Revenue for Other Local receipts was overstated by $ 3 , 000 . Other Local Receipts should have been $ 65 , 839, not $ 68, 839 as reported on line 650 . Criteria: • State Aid revenue (MSBA) as recorded in the detail accounting ledgers should be recorded on the proper column in the End-of-Year-Report. • The amounts reported as Revolving and Special Funds should be traceable to the School Departments accounting ledger . Recommendations: • We recommend that the State Aid revenue be reported on the proper column in the End-of-Year-Report . • We recommend that the School Department report all Revolving and Special Funds revenues as recorded in the School Department ' s detail accounting ledgers . Response: School District personnel will exercise due diligence to ensure the proper coding of revenue amounts be reported on the proper lines in the End of Year Financial Report to the correct revenue line items in future reporting. In addition, School District personnel will exercise due diligence in the reporting of all Revolving and Special Funds revenues as recorded and traceable to the School Department ' s detail accounting ledgers -6 - FINDINGS AND RECOMMENDATIONS 2. Finding: Schedule 19 — requirement 19 — In our review of Schedule 19 we noted that the School Department did not report changes to the "A . 1 Appropriation by School Committee" section of Schedule 19 to the ESE. Additional Town funds of $ 45 , 583 were appropriated during Fiscal Year 2013 . Criteria: All changes to the "Am IAppropriation by School Committee" section of Schedule 19 should be reported to the ESE within 30 days . Recommendation : We recommend that the School Department report all changes to the "A . 1 Appropriation by School Committee section of Schedule 19 " to the ESE within a timely manner in accordance with ESE guidelines . Response: School District personnel will exercise due diligence to ensure that all changes to the "A . 1 Appropriation by School Committee section of Schedule 19" to ESE within a timely manner in accordance with ESE guidelines . -7 -