HomeMy Public PortalAboutDOE Agreed Upon Procedures Letter FY14 - Brewster
TOWN OF BREWSTER, MASSACHUSETTS
BREWSTER PUBLIC SCHOOLS
INDEPENDENT ACCOUNTANTS’ REPORT
ON APPLYING AGREED-UPON PROCEDURES
YEAR ENDED JUNE 30, 2014
TOWN OF BREWSTER, MASSACHUSETTS
BREWSTER PUBLIC SCHOOLS
JUNE 30, 2014
CONTENTS
PAGE
Independent Accountants’ Report on Applying Agreed-Upon Procedures 1
Specific Compliance Requirements 2 – 6
Findings and Recommendations 7 – 13
R. E. BROWN & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
P.O. Box 230 - 25 CEMETERY STREET
Mendon, Massachusetts 01756
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") End-of-
Year Financial Report for the year ended June 30, 2014, 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, 2014. 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.
R. E. Brown & Company
Certified Public Accountants
June 30, 2015
Phone: (508) 478-3941 Fax: (508) 478-1779
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.
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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.
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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 FY'15
Special Education Tuition, verify prepaid tuition was not included as
an FY'14 expense. If the district prepaid FY'14 tuition from FY'13,
that amount should be included as an FY'14 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?
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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 and review the propriety of the
methodology. 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 4285
(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.
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20. Determine amounts budgeted in Schedule 19 Part A.2 are consistent
with methodologies outlined in the agreement noted in procedure II A.
4a. above.
21. Determine that retiree health insurance (5250) is reported separately.
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FINDINGS AND RECOMMENDATIONS
1. Finding: Schedule 1 – requirement 2 – In our review of Schedule 1 Revenue for State
Aid, Federal Grants, State Grants, and Revolving and Special funds as compared to the
detail in the Schools or Municipality’s accounting ledgers, we noted that the Revenue
from the Race to the Top Grant in the amount of $10,270 was not reported on the End of
Year Financial Report. This amount should have been reported as ESE Administered
Grants (line 300) on Column 5 (Undistributed). Thus line 300 Column 5 (Undistributed)
should have been $29,323, not $19,053 as reported.
Criteria: The Revenues from State Aid, Federal Grants, State Grants, and Revolving and
Special funds received for the benefit of the School or Municipality should be included in
the Revenue section of the End of Year Financial Report.
Recommendation: We recommend that the School Department report all Revenue from
State Aid, Federal Grants, State Grants, and Revolving and Special funds received in the
End of Year Financial Report.
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. An amendment has been made to the End of
Year Financial Report to correct this finding in line 300.
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FINDINGS AND RECOMMENDATIONS
2. Finding: Schedule 1 – requirement 3 – In our review of the crosswalk between Schedule
1 School Committee total expenditures (line 1850) to the School Department’s accounting
ledger and the Municipalities accounting ledger, we noted the following:
• The municipality incurred $30,000 in expenditures for carpeting and tile which was
not reported on either the School Committee section or the Town’s section of
Schedule One. This amount should be shown on line 1979 Maintenance of School
Equipment column 5 (Undistributed).
• The Municipality incurred $5,280 in expenditures for The Eddy clock and intercom
system which was not reported on either the School Committee section or the Town’s
section of Schedule One. This amount should have been shown on line 1979
Maintenance of School Equipment column 5 (Undistributed).
• The Municipality incurred $3,532 in expenditures for clock replacement/PA system
repairs which was not reported on either the School Committee section or the Town’s
section of Schedule One. This amount should have been shown on line 1979
Maintenance of School Equipment column 5 (Undistributed).
• The Municipality incurred $50,000 in expenditures for Eddy roof feasibility study
which was not reported on either the School Committee section or the Town’s section
of Schedule One. This amount should have been shown on line 1976 Maintenance of
School Buildings column 5 (Undistributed).
• The School Committee total expenditures per Schedule One (line 1850) exceeded the
School Department’s accounting ledger by $352,919. The total School Committee
expenditures on line 1850 should have been $6,826,748 not $7,179,667 as reported.
Criteria:
• All School related expenditures incurred by either the Municipality or the School
Committee should be reported in either the School Committee section or the Town
section of Schedule One.
• The total School Committee expenditures as reported on Schedule One (line 1850)
should agree to the School Departments accounting ledger expenditures in total.
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FINDINGS AND RECOMMENDATIONS
Recommendations:
• We recommend that the School Department record all education expenditures as
recorded in the Schools or Municipalities accounting ledgers on either the School
Committee or Town’s section of Schedule One.
• We recommend that the School Department report the total expenditures as recorded
on the School Departments accounting ledger to Schedule One (line 1850).
Response: School District personnel will exercise due diligence to ensure the proper
reporting of all education expenditures as recorded in the School’s or Municipality’s
accounting ledgers on either the School Committee or Town’s section of Schedule 1.
An amendment has been made to the End of Year Financial Report to correct this
finding in line 1850 of Schedule 1 which was reported twice. In addition, an
amendment has also been made to the End of Year Financial Report to increase lines
1976 of Schedule 1 by $50,000 and line 1979 by $38,812 to correct these findings.
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FINDINGS AND RECOMMENDATIONS
3. Finding: Schedule 1 – requirement 8 – In our review of the Municipal expenditures for
Short Term Interest BANS on line 2065 column 5 (Undistributed) we noted that the
amount reported as BAN Interest for $9,286 was for fiscal year 2015. Thus line 2065
Column 5 (Undistributed) should have been $0, not $9,286 as reported.
Criteria: The amount to be reported for Short Term Interest BANS should agree to the
amount as recorded in the Municipality’s current year accounting ledger.
Recommendation: We recommend that the Municipality report all Short Term Interest
BANS as recorded in the Municipality’s current year accounting ledger on Schedule 1.
Response: School District personnel will exercise due diligence to ensure the proper
reporting of all Short Term Interest BANS as recorded in the Municipality’s current
year accounting ledgers on the Town’s section of Schedule 1.
An amendment has been made to the End of Year Financial Report to correct this
finding in line 2065 column 5 to reduce the amount to $0.
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FINDINGS AND RECOMMENDATIONS
4. Finding: Schedule 1 – requirement 9 – In our review of the Municipal expenditures reported
as Long-Term School Construction debt for principal (8100) and interest (8200), we noted
that the principle amount of $420,000 was reported on line 2140 column 5 (Undistributed) in
error. This amount should have been reported on line 2130 column 5 (Undistributed). Thus
line 2140 on column 5 (Undistributed) should have been $0 not $420,000 as reported, and
line 2130 on column 5 (Undistributed) should have been $420,000 not $0 as reported. Also
the interest amount of $44,550 was reported on line 2200 column 5 (Undistributed) in error.
This amount should have been reported on line 2140 column 5 (Undistributed). Thus line
2140 column 5 (undistributed) should have been $44,550 not $420,000 as reported, and line
2200 column 5 (Undistributed) should have been $0 not $44,550 as reported.
Criteria: The amount to be reported for Long Term School Construction debt for principal
(8100) and interest (8200) should be recorded on the proper lines on the Towns section of
Schedule One.
Recommendation: We recommend that the Municipality report the Long Term School debt
Principal (8100) and interest (8200) on the proper lines on the Towns section of Schedule
One.
Response: School District personnel will exercise due diligence to ensure the proper
reporting of the Long Term School debt principal and interest on the proper lines of the
Town’s section of Schedule 1. An amendment has been made to the End of Year Financial
Report to correct this finding to move the principle of $420,000 from line 2140 to line 2130
and interest from line 2200 to line 2140.
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FINDINGS AND RECOMMENDATIONS
5. Finding: Schedule 1 – requirement 10 – In our review of the School Departments
expenditures reported as Tuitions to Mass. Schools (9100) line 1770 column 2 (Special
Education) as compared to the detail in the School Departments accounting ledger we noted
that the amount was overstated by $352,387. The preschool and extended day expenditures
were added to this amount in error. The Tuition to Mass. Schools (9100) line 1770 column 2
(Special Education) should have been $37,972 not $390,359 as reported.
Criteria: The amount to be reported as Tuition to Mass. Schools expenditures should agree
to the amount as recorded in the School Departments accounting ledger.
Recommendation: We recommend that the School Department report the Tuition to Mass.
School’s expenditures as recorded in the School Departments accounting ledger on Schedule
One
Response: School District personnel will exercise due diligence to ensure the proper
reporting of the tuition to Mass. Schools expenditures as recorded in the School
Department’s accounting ledger on Schedule 1. An amendment has been made to the End
of Year Financial Report to correct this finding which was reported twice on Schedule 1.
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FINDINGS AND RECOMMENDATIONS
6. Finding: Schedule 1 – 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 $43,066 were
appropriated during Fiscal Year 2015.
Criteria: All Changes to the “A.1 Appropriation 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. An amendment has
been made to the End of Year Financial Report to correct this finding to increase line
7030 column 2 by $35,000 and line 7090 column 5 by $8,066.
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