School districts have asked the State Auditor’s Office to let them know in advance the areas they can expect auditors to emphasize in upcoming audits. This list will help your district prepare for audits examining FY 2016. If you have questions, your local audit team is available year round: they can answer technical questions and point you to additional guidance on specific areas of audit. GASB 68 Pension Reporting
Modified accrual and cash basis school districts must report their contributions to pension plans, as well as their proportionate share of the net pension liability and other figures, in the notes to their financial statements. The final F-196 with the net pension liability data should be the basis for these notes: it is what we use for audits.
GASB 10 Self Insurance
Many districts participate in self-insurance activities that require an audit at least once every two years (RCW 43.09.260). Activities that fall under this requirement include: ESD non-risk sharing unemployment compensation pools, workers compensation, and dental plans for employees. Be ready to discuss any self-insurance programs you have with your local auditor, as we might need to audit them this year.
Career and Technical Education
Local audit teams will be examining three areas of Career and Technical Education (CTE) enrollment that affect CTE funding claims:
(1) Is the course approved by OSPI for the period under audit?
(2) Does the instructor have a CTE certification for the period under audit?
(3) Does the instructor have an endorsement (v-code) that ties to the approved course code (CIP)?
The Performance Audit team recently concluded its work around CTE programs. The first audit, examining CTE outcomes, was published in December 2016; the second, on leading practices in CTE, will appear in spring 2017.
Transportation (Program 99 expenditures)
This year, local audit teams will focus on the process a district has in place to identify non to-and-from transportation expenditures that are required to be removed from Program 99 prior to reporting on the F-196.
Alternative Learning Experience (ALE) Enrollment
The final year of legislatively mandated ALE work will continue with Team School Programs performing ALE audits of 125 ALE programs in 73 districts. The primary reason an audit will question ALE funding is the lack of supporting documentation. Documentation required includes (but is not limited to):
- District release forms for nonresident students enrolled in an ALE program
- Letter of attestation, which must be on file within 30 days of enrollment or a student may not be counted for funding
- Written student learning plan and all required components, two of which are:
- Beginning and ending dates
- Average number of hours per week
The ALE program must also satisfy the Office of Superintendents of Public Instruction’s requirements for course of study and equivalencies leading to a high school diploma.
Performance audit is also conducting ALE audit work and sent out a survey to school districts at the end of October. We expect to publish a report summarizing these mandated audit results in December 2017.
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