Los Lunas Board of Education approved its annual audit; two findings

Los Lunas —The Los Lunas Schools received a “clean” and unmodified audit for the last fiscal year, accumulating two minor findings this go-around, and rectified eight findings from its 2020 financial statement.

Jaramillo Accounting Group presented its audit findings — one concerning supply inventory controls and the other a violation of the anti-donation clause — to the LLS Board of Education, who unanimously approved the audit on Feb. 15.

“These are really low-level findings that are required under the state audit rule, and the state audit rule basically says, ‘every good accounting practice that’s not followed,’” JAG CPA and partner Scott Eliason said during the presentation. “Every compliance deficiency we have to report.”

 

Supply inventory controls

According to the audit, from a random sample of supplies it looked at from maintenance compared to the maintenance year-end balance report, the department was short about $5,470 in different items. An accountant from JAG emphasized since they only audited a small sample of items, this finding does not report the full scale of the overall issue.

“To put it into perspective, we probably had about $110,000,000 worth of expenditures, and so when you look at $5,000 missing, although we do take that seriously…” said LLS Chief Financial Officer Claire Cieremans during the meeting. “Last year, eight findings; this year, two findings. It always highlights our process and controls and makes everybody take higher accountability…In perspective, it’s relatively small but we do take it seriously.”

According to Cieremans, the items which made up for the largest amount of the deficit included personal protective equipment, specifically KN95 masks. In the inventory, there should have been 1,200 masks but only 710 showed up when the auditors came to count them, amounting to about $2,560 of the shortage.

“Masks were going out the door on a daily basis as needed,” Cieremans said. “We now formulated tighter control on what goes in and out of the warehouse.”

The audit said the maintenance department had not been conducting inventory counts either at year-end or monthly during the school year, and leaving the warehouse unattended during business hours.

This is the first year the annual audit looked at supply controls in the LLS maintenance department, Cieremans said.

She said they have resolved the issue by  implementing regular assessments of the warehouse inventory, keeping better track of what goes in and out of the maintenance warehouse and by not allowing staff to have access to the warehouse without a warehouse staff member assisting them.

Cieremans assured in the bigger scheme of the entire district budget, this finding is not indicative of a larger issue within the school district.

 

Anti-donation violation

At the height of the COVID-19 pandemic while many teachers and staff were still working from home, Cieremans said many district principals came to them wishing to offer a thank you to their employees for their work during online schooling.

In celebration of the Christmas season, the district decided to send each a gift — a $5 Starbucks gift card with a note that read “Thanks a Latte.”

“I think the message of that particular time, most of our staff were working from home and we were in unprecedented times,” Cieremans said of the gift cards.

Overall, about 1,200 gift cards were given out to LLS employees, enough for each employee to receive one, amounting to roughly $6,000.

According to the New Mexico law, any public employee may not receive additional compensation for work retroactively, however, they may receive additional pay for upcoming work.

 

Resolved 2020 findings

During the 2020 fiscal year, the district received an unmodified audit, complete with eight different findings, all of which were resolved by this past fiscal year.

The audit outlined several “possible violations” of procurement code, Open Meetings Act and governmental conduct violations as part of their first finding, such as procuring vendors during closed sessions, allegations of quid pro quo, and using private emails for district business, a violation of the Inspection of Public Records Act.

The second finding highlighted a problem with the special audit conducted by REDW into the spending of the maintenance department. The auditors found the district’s audit committee was not involved in entrance and exit conferences for the special audit, as required by state law.

In a repeat federal awards finding from fiscal year 2019, they found noncompliance with the National School Lunch program, which provides free and reduced lunch to Los Lunas Schools students. Of the two sites tested, one did not reconcile daily meal counts and the other did not have enough evidence, as required by federal law, to constitute an audit. The issues were resolved in December 2019 when the problem was first identified.

In a separate finding, the award recipients of the U.S. Department of Education funding were not checked to see if they had been suspended or procured. Both federal awards findings were labeled as significant deficiencies.

Additionally, pay for five Title I employees were erroneously charged to a federal award title that could have incorrectly billed the federal government for more than $42,000. All these were labeled as significant deficiencies.

In other matters, the auditors found the schools accounting processes and procedures had not been updated since 2004 at the time of the audit, some pay rates had been approved by the superintendent without input from the board of education or proper documentation, and recommendations based on the REDW special audit.

Jaramillo Accounting Group categorized all of the findings from fiscal year 2020 as resolved.

“Wonderful job by everyone involved to make sure our tax dollars are spent wisely to have improvements for our students,” LLS Superintendent Arsenio Romero said. “We went from clearing eight findings last year to two findings this year.

“As much as we want to be able to have zero findings, that may happen, but you’re right though. These findings, although serious, are minor and we will learn from them.”