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BELLEVILLE
TOWNSHIP SCHOOL DISTRICT
COMPREHENSIVE ANNUAL FIN NCI L REPORT
FOR
THE
FISC L YE R
ENDED
JUNE
30 2014
Belleville New Jersey
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COMPREHENSIVE ANNUAL
FINANCIAL
R PORT
of the
Belleville Township School District
Belleville New Jersey
For The Fiscal Year Ended June 30 2014
Prepared by
Business Office
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BELLEVILLE
TOWNSHIP SCHOOL DISTRICT
TABLE OF CONTENTS
Letter of Transmittal
Organizational Chart
Roster
of
Officials
Consultants and Advisors
Independent Auditor s Report
INTRODUCTORY SECTION
FINANCIAL SECTION
REQUIRED SUPPLEMENTARY INFORMATION- PART I
Management s Discussion and Analysis
Basic Financial Statements
A. District-wide Financial Statements
A 1
A 2
Statement
of
Net Position
Statement of Activities
B. Fund Financial Statements
Governmental unds
B 1 Balance Sheet
B-2 Statement of Revenues, Expenditures, and Changes in Fund Balances
B 3 Reconciliation of the Statement of Revenues, Expenditures and
Changes
in
Fund Balances
of
Governmental Funds to the
Statement of Activities
Proprietary unds
B 4 Statement of Net Position
B 5 Combining Statement
of
Revenues, Expenses, and Changes in Net Position
B-6 Statement of Cash Flows
iduciary unds
B-7 Statement of Fiduciary Net Position
B-8 Statement of Changes in Fiduciary Net Position Not Applicable
Notes to the Financial Statements
i-iv
v
vi
v
1 3
4-14
15
16-17
18
19
20
21
22
23
24
25
26-55
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
TABLE OF CONTENTS
REQUIRED SUPPLEMENTARY INFORM TION PART II
C Budgetary Comparison Schedules
C 1
C-2
C-3
Budgetary Comparison Schedule - General Fund
Budgetary Comparison Schedule - Special Revenue Fund
Required Supplementary Information Budgetary Comparison Schedule-
Notes to the Required Supplementary Information
OTHER SUPPLEMENTARY INFORMATION
D School Level Schedules Not Applicable
E Special Revenue Fund
E 1
E-2
Combining Schedule of Program Revenues and Expenditures
Special Revenue
Fund
Budgetary Basis
Schedule of Preschool Aid
Expenditures
Budgetary Basis Not Applicable
F Capital Projects Fund
F 1 Summary Schedule of Project Expenditures Budgetary Basis
F-2 Summary Schedule of Revenues Expenditures and Changes in Fund
Balance
Budgetary Basis
F-2a Schedule
of
Project Revenues Expenditures Project Balance and Project
Status
Budgetary Basis
F-2b Schedule of Project Revenues Expenditures Project Balance and Project
Status
Budgetary Basis
G Proprietary Funds
nterprise Fund
G 1
Combining Statement of Net Position
G-2 Combining Statement ofRevenues Expenses and Changes in
Net Position
G-3 Combining Statement
of
Cash Flows
56-63
64
65
66-67
68
69
70
71
72
73
73
73
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
TABLE
OF CONTENTS
OTHER SUPPLEMENTARY INFORMATION Continued)
H. Fiduciary Fnnds
H 1
H 2
H 3
H 4
Combining Statement of Agency Fund Net Position
Combining Statement of Changes in Fiduciary
Net
Position
Not
Applicable
Student Activity Agency Fund Schedule of Receipts and Disbursements
Payroll Agency Fund Schedule of Receipts and Disbursements
I. Long-Term Debt
1 1
I 2
I 3
J.
J 1
J 2
J 3
J 4
J 5
J 6
J 7
J 8
J 9
J 1 0
J 11
J 12
J 13
J 14
J 15
J 16
J 17
J 18
J 19
J 20
Schedule
of
Serial Bonds
Schedule of Capital Leases Payable and Lease Purchase Agreements
Debt Service Fund Budgetary Comparison Schedule
STATISTICAL SECTION Unaudited)
Net Position by Component
Changes in Net Position
Fund Balances Governmental Funds
Changes in Fund Balances Governmental Funds
General Fund
Other Local Revenue by Source
Assessed Value and Actual Value
of
Taxable Property
Direct and Overlapping Property
Tax
Rates
Principal Property Taxpayers
Property Tax Levies and Collections
Ratios of Outstanding Debt
by Type
Ratios
of
Net General Bonded Debt Outstanding
Direct and Overlapping Governmental Activities
Debt
Legal Debt Margin Information
Demographic and Economic Statistics
Principal Employers
Full Time Equivalent District Employees by Function/Program
Operating Statistics
School Building Information
Schedule
of
Required Maintenance for School Facilities
Insurance Schedule
74
75
75
76
77
78
79
80
81 82
83
84 85
86
87
88
89
9
91
92
93
94
95
96
97
98
99 100
101
102
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
T BLE OF
CONTENTS
Page
K
SINGLE
AUDIT
SECTION
K 1
Rep011 on Internal Control Over Financial Reporting and on Compliance and
Other Matters Based on an Audit
of
Financial Statements
Performed in Accordance with Government Auditing Standards -
Independent Audi tor s Report 103-104
K-2
Report on Compliance for Each Major Federal and State Program; Report on Internal
Control Over Compliance; and Rep011 on the Schedule
of
Expenditures
of
Federal
Awards Required by U.S. OMB Circular A-133 and Schedule
of
Expenditures
of
State Financial Assistance Required by New Jersey OMB Circular 04-04
Independent Auditor s Report 105-108
K-3
Schedule
of
Expenditure
of
Federal Awards 109
K-4
Schedule
of
Expenditures
of
State Financial Assistance
110-111
K-5
Notes to the Schedules of Expenditures of Federal Awards and
State Financial Assistance
112-113
K-6
Schedule
of
Findings and Questioned Costs
114-151
K-7
Summary Schedule
of
Prior Year Findings
152
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INTRODU TORY SE TION
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ELLEVILLE
PU LIC
SCHOOLS
Ricardo costa
cting Superintendent
December 17,2014
Honorable President and
1
02
Passaic Avenue
BELLEVILLE PUBLIC SCHOOLS
102 Passaic Avenue
Belleville, New Jersey 07109
Web Site: www.bellevilleschools.org
Members of the Board of Education
Belleville School District
Essex County, New Jersey
Dear Board Members:
Phone: 973 450-3500 ext. 1021
Fax
973 450-3504
The comprehensive annual financial report of the Belleville School District for the fiscal year ended June
30, 2014 is hereby submitted. Responsibility for both the accuracy of the data and completeness and
fairness
of
the presentation, including all disclosures, rests with the management
of
the Board
of
Education. To the best of our knowledge and belief, the data presented in this report is accurate in all
material respects and
is
reported in a mauner designed to present fairly the financial position and results
of
operations of the various funds and account groups of the District. All disclosures necessary to enable the
reader to gain an understanding
of
the District's financial activities have been included.
The comprehensive annual financial report is presented in four sections: introductory, financial, statistical
and single audit. The introductory section includes this transmittal letter, the District's organizational chart
and a list of principal officials. The financial section includes management discussion and analysis
(MD&A), the basic financial statements and schedules, as well as the auditor's report thereon. The
MD&A of the District's financial activities is added to this section under GASB 34 to introduce the basic
financial statements. The statistical section includes selected financial and demographic information,
generally presented on a multi-year basis. The District is required to undergo an annual single audit in
conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and
Budget Circular A-133, Audits of State and Local Governments , and the state Treasury Circular Letter
04-04 OMB, Single Audit Policy for Recipients
of
Federal Grants, State Grants and State Aid Payments.
Information related to this single audit, including the auditor's report on the internal control structure and
compliance with applicable laws and regulations and findings and recommendations, are included in the
single audit section of this report.
1
REPORTING ENTITY AND ITS SERVICES: Belleville School District is an independent
reporting entity within the criteria adopted by the GASB as established by GASB Statement No. 14. All
funds and account groups of the District are included in this report. The Belleville Board of Education
and all its schools constitute the District's reporting entity.
i
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The District provides a full range o educational services appropriate
to
grade levels Pre K through
12.
These include regular, vocational as well as special education for handicapped youngsters. The District
completed the 2013-2014 fiscal year with an enrollment o 4,699.0 students, which is 1.32 more than
previous year's enrollment. The following details the changes in the student enrollment o the District
over the last two years.
2013-2014
2012-2013
4,699.0
4,638.0
1.32
1.42
2 ECONOMIC CONDITION AND OUTLOOK: The Township has little undeveloped land and,
accordingly, any new industry will have to be a replacement to existing establishments.
3 MAJOR INITIATIVES: The school district is committed
to
maintaining and improving student
performance on standardized assessments. The district relocated
th
grade students from seven elementary
schools to the middle school on September 1 2013. The middle school and central office staff continued
to work with the NJDOE Regional Achievement Center 3
to
provide strategic support
to
meet middle
school academic goals. In addition, the district secured additional computers to support
PARRC testing.
The NJQSAC report indicated that the district
is
not meeting academic standards for student success
resulting in a need for additional technology, academic resources, and professional development.
4 INTERNAL ACCOUNTING CONTROLS:
Management o the District is responsible for
establishing and maintaining an internal control structure designed to ensure that the assets o the District
are protected from loss, theft or misuse and
to
ensure that adequate accounting data are compiled to allow
for the preparation o financial statements in conformity with generally accepted accounting principles
(GAAP). The internal control structure is designed
to
provide reasonable, but not absolute, assurance that
these objectives are met. The concept o reasonable assurance recognizes that: (1) the cost o a control
should not exceed the benefits likely to be derived; and (2) the valuation o costs and benefits requires
estimates and judgments by management. The district failed to maintain these controls throughout the full
school year resulting in a deficit which will impact future budgets and a need for fiscal oversight.
As
a recipient o federal and state financial assistance, the District also
is
responsible for ensuring that an
adequate internal control structure is in place to ensure compliance with applicable laws and regulations
related to those programs. This internal control structure is also subject to periodic evaluation by the
District management. As part o the District's single audit described earlier, tests are made to determine
the adequacy o the internal control structure, including that portion related
to
federal and state financial
assistance programs, as well as to determine that the District has complied with applicable laws and
regulations.
5 BUDGETARY CONTROL: In addition to internal accounting controls, the District is obligated to
maintain budgetary controls. The objective o these budgetary controls is to ensure compliance with legal
provisions embodied in the annual appropriated budget approved by the voters o the municipality.
Annual appropriated budgets are adopted for the general fund, and the special revenue fund.
Project-length budgets are approved for the capital improvements accounted for in the capital projects
fund. The final budget amount as amended for the fiscal year is reflected in the financial section.
An encumbrance accounting system is used to record outstanding purchase commitments on a line item
basis. Open encumbrances at year-end are either canceled or are included as reappropriations o fund
balance in the subsequent year. Those amounts to be reappropriated are reported as reservations o fund
balance as o June 30, 2014. During March 2014 the district acknowledged the budget controls were not
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adequate to prevent over expenditures o the 2013-14 budget. In March the board approved an
administrative change which began a process to address the projected deficit.
6 ACCOUNTING SYSTEM AND REPORTS: The District's accounting records reflect generally
accepted accounting principles, as promulgated
by
the Govermnental Accounting Standards Board
(GASB). The accounting system o the District is organized on the basis o funds and account groups.
These funds and account groups are explained in Notes to the Financial Statements , Note
I
The district
did not file appropriate monthly financial reports from December 2013 through March 2014 resulting in a
delayed reconciliation o accounts during the remainder o the school year. In March, the Board approved
an administrative change to address the projected deficit. An Acting Interim Business Administrator was
appointed who after an analysis o the district revenues and expenditures advised the Belleville
Superintendent and the Essex County Executive Superintendent that the district was in deficit estimated to
be
$3,500,000.
After several meetings with the New Jersey Department o Education and the Commissioner a fiscal state
monitor was appointed to work with the administration, staff, Board, and the community to resolve the
district's deficit. In May the district notified over 100 staff members that a reduction in force could
impact their employment for the 2014-15 school. The district continued to work with the Executive
County Superintendent and the NJDOE to remedy the fiscal deficit and improve student performance.
The Belleville Board o Education was presented a report by the certified public accounting firm o Lerch,
Vinci
&
Higgins, LLC on June 16 2014 that indicated categorical over expenditures projected at
$4,827,126 resulting in an unassigned deficit
o
$3,605,033. The report was shared with the New Jersey
Department o Education.
7
FINANCIAL INFORMATION AT FISCAL YEAR END:
As demonstrated by the various
statements and schedules included in the financial section o this report, the District did not meet its
responsibility for sound financial management. The following schedule presents a summary
o
the general
fund revenues for the fiscal year ended June 30, 2014.
Revenue mount of Total
Local Sources
$
34,303,621
52.3
State Sources 31,093,966 47.4
Federal Sources 143,334
0.2
Total $
65,540,921 100.0
The following schedule presents a summary
o
general fund for the fiscal year ended June 30, 2014.
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Expenditures
mount
of
Total
Current Expense:
Instruction
43,640,706
61.6%
Support Services
26,408,284
37.2%
Capital Outlay
45,941
0.13%
Debt Service 789 132 1.13%
Total Expenditures
70,884,243 100%
8.DEBTADMINISTRATION: The District had no outstanding debt issues (serial bonds) smce
September 1996.
9. CASH MANAGEMENT: The investment policy o the District is guided in large part
by
state statute
as detailed in Notes to the Financial Statements , Note
2
The District has adopted a cash management
plan, which requires it to deposit public funds in public depositories protected from loss under the
provisions o the Governmental Unit Deposit Protection Act ( GUDP A ). GUDP A was enacted in 1970
to protect Governmental Units from a loss o funds on deposit with a failed banking institution in New
Jersey. The law requires governmental units to deposit public funds only in public depositories located in
New Jersey, where the funds are secured in accordance with the Act.
10. RISK MANAGEMENT: The Board carries various forms o insurance, including but not limited to
general liability, automobile liability and comprehensive/collision, hazard and theft insurance on property
and contents, and fidelity bonds.
11. OTHER INFORMATION:
A Independent Audit - State statutes require an armual audit by independent certified public accountants
or registered municipal accountants. The accounting firm o Lerch, Vinci
&
Higgins, LLP was selected by
the Board o Education. In addition to meeting the requirements set forth in state statutes, the audit also
was designed
to
meet the requirements o the Single Audit Act o 1984 and the related OMB Circular
A-133 and state Treasury Circular Letter 04-04 OMB. The auditor's report on the basic financial
statements and combining and individual fund statements and schedules is included in the financial
section o this report. The auditor's reports related specifically to the single audit are included in the
single audit section o this report.
Respectfully submitted,
~
Ricardo Acosta
Acting Superintendent o Schools
iv
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atoriPa.._Throut:fo Grant or/
'
U.S. Deparlmcntof Agrkulnu.,
p..,sed-lhrough Stnft Departmentof Edacalioo
Food Dislribul.ion
Progrnm
Food Dilribution
Progrnm
National School LW>oh Program
Nal.ionnl Sclwo LW>oh Program
Special Milk
Progrnm
National School Bceokfost Program
No.lionnl School Breakfast Program
Tola1 Enterprise FUIId
U.S. Ocparnnent f E d l l < : l l ~ o n P a s e d Throut:fo
sr.re Deparlmcntof Edueotion
General Fund
Education Jobs FW>d
Tooal
General Fund
U.S.
Deparlmcntof Heallil and
Human Serviceic
IDEA Part
B.
Basic
IDEA Port
B.
Preschool Handicapped
IDEA Port
B,
Preschool Handicapped
Carl D
Perlcins Vocotion
Educotion
Carl
D. Pl
lhrough
Soate Department ofEduCiltion
Hurricane S.ndy
U.S.
Department
of Education
Passed-Through
County
of Essex
Summer Youth Employment Training
Total
Speci,_l R ~ = u e Fund
Tooal Federal Awords
Federal
CFDA GrantorSflltc
Number Projoet Number
1()550
10.550
0.555
10.555
10.556
1().553
10.553
84.41
93.778
84.010
84.010
84.027
84.027
84.15
84.151
84.048
84.048
84.162
84.162
843&6
84.366
84.367
84367
84.416
97.036
7.265
WA
W
WA
NIA
WA
W
NiA
NIA
Grant
Period
7 / l / 1 3 ~ 3 0 / 1 4
711/12-6130113
7 1 1 1 3 ~ 3 0 / 4
71 112--6/30/ 3
7/1112--6/30113
711113--6130114
711112--6/30/B
71 .'l3-61301t4
71Jit3-6,]0/ 4
7/1113--6/30/14
9/ / 2--8/31113
7/1113-6130114
9/1/12-t /31113
7 1113--6130/14
9/ 112-t /31113
71 /13--6/30/14
9 1112-t /31113
711113--6/30/14
9 1112-t /31113
7/1/13--6130/14
9/ /12--8131113
9/1112-8131113
9 1106-8/31/07
9 1112-8131113
9Allll2-t l3 /13
7/01 12-61301 3
See
AOCOinp93 s
891.049
212.429
"
1,010
58,982
4.444
1.132.194
80,655
~ - ' ' ~ ' 0 0
1.242,117 1.276.275
~ - - ' ' - 5 ~
~ - - ' ' - 5 ~
~ - ' 9
Adju
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
NOTES TO THE SCHEDULES OF EXPENDITURES OF
FEDERAL AWARDS AND STATE
FINANCIAL
ASSISTANCE
FOR THE FISCAL
YEAR ENDED
JUNE
30, 2014
NOTE
1
GENERAL
EXHIBITK 5
The accompanying schedules present the activity of all federal and state financial assistance programs of the Belleville
Township School District. The District is defined in Note l (A) to the Board's financial statements. All federal financial
assistance received directly from federal agencies, as well as federal awards and state financial assistance passed through
other government agencies
is
included on the schedules
of
expenditures
of
federal awards and state financial assistance.
NOTE 2 BASIS OF ACCOUNTING
The accompanying schedules are prepared and presented using the budgetary basis of accounting with the exception of
programs recorded
in
the food service fund, which are presented using the accrual basis
of
accounting. These bases
of
accounting are described in Notes 1 C) to the Board's financial statements. The information in these schedules is presented
in
accordance with requirements of U.S. OMB Circular A-133, Audits of States, Local Governments and Non-Profit
Organizations and New Jersey OMB Circular 04-04, Single Audit Policy for Recipients of Federal Grants, State Grants,
and State Aid . Therefore, some amounts presented in these schedules may differ from the amounts presented in or used in
the preparation of, the financial statements.
NOTE 3 RELATIONSHIP TO FINANCIAL STATEMENTS
The financial statements present the general fund and special revenue fund on a GAAP basis. Budgetary comparison
statements or schedules (RSI) are presented for the general fund and special revenue fund to demonstrate finance-related
legal compliance in which certain revenue is permitted
by
law or grant agreement to be recognized in the audit year, whereas
for GAAP reporting, revenue is not recognized until the subsequent year or when expenditures have been made.
The general fund
is
presented in the accompanying schedules on a modified accrual basis with the exception
of
the revenue
recognition of the delayed state aid payments in the current budget year, which is mandated pursuant to N.J.S.A. 18A:22-
44.2.. For GAAP purposes, those payments are not recognized until the subsequent year due to the state deferral and
recording of certain state aid payments in the subsequent year. The special revenue fund is presented in the accompanying
schedules on the grant accounting budgetary basis which recognizes encumbrances as expenditures and also recognizes the
related revenues, which may include the delayed state aid payments, whereas the GAAP basis does not. The special revenue
fund also recognizes the delayed state aid payments in the current budget year, consistent with N
J
.S.A. 18A:22-44.2.
The net adjustment to reconcile from the budgetary basis to the GAAP basis is a decrease of $756,654 for the general fund
and an increase
of
$100,035 for the special revenue fund. See the Notes to Required Supplementary Information for a
reconciliation of the budgetary basis to the modified accrual basis of accounting for the general and special revenue funds.
Awards and financial assistance revenues are reported in the Board's financial statements on a GAAP basis
as
presented
as
follows:
Federal State
Total
General Fund $
143,344
$
31,093,966 $
31,237,310
Special Revenue Fund 2,322,683 127,181 2,449,864
Food Service Fund
1,276,275 25,532
1,301,807
Total Financial Assistance $
3,742,302
$
31,246,679 $
34,988,981
112
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
NOTES TO THE SCHEDULES
OF
EXPENDITURES OF
FEDERAL AWARDS ND STATE FINANCIAL ASSISTANCE
FOR THE
FISCAL YEAR ENDED JUNE 30,2014
NOTE
4 RELATIONSHIP TO FEDERAL
ND
STATE FINANCIAL REPORTS
EXHIBITK-5
Amounts reported
in
the accompanying schedules may not necessarily agree with the amounts reported
in
the related federal
and state financial reports due to timing differences between the District's fiscal year and grant program years.
NOTE 5 OTHER INFORMATION
Revenues and expenditures reported under the National School Lunch Program as non-cash assistance represent current year
value received and current year distributions, respectively
of
the Federal Food Distribution Program. TPAF Social Security
contributions
in
the amount
of
2,226,611 represents the amount reimbursed by the State for the employer's share
of
social
security contributions for TPAF members for the fiscal year ended June 30, 2014. The amount reported as TPAF Pension
System Contributions
in
the amount of 1,225,221 and TPAF Post-Retirement Medical Benefits Contributions
in
the amount
of 2,008,901 represents the amount paid by the State on behalf
of
the District for the fiscal year ended June 30, 2014.
NOTE 6 ON-BEHALF PROGRAMS NOT SUBJECT TO STATE SINGLE AUDIT
On-behalf State Programs for TPAF Pension and Post-Retirement Medical Benefits Contributions are not subject to a State
single audit and, therefore, are excluded from major program determination. The Schedule
of
State Financial Assistance
provides a reconciliation
of
State financial assistance reported
in
the District's financial statements and the amount subject to
State single audit and major program determination.
ll
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EXHIBIT K-6
BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE
OF
FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2014
Part -
Summary ofAuditor s Results
Financial Statement Section
Type
of
auditors' report issued on financial statements
Internal control over financial reporting:
l
Material weakness(es identified?
2) Significant deficiencies identified that are
not
considered
to be
material weaknesses?
Noncompliance material to basic financial
statements noted?
Federal wards Section
Internal Control over major programs:
(1) Material weakness(es identified?
(2) Significant deficiencies identified that are not
considered to
be
material weaknesses?
Type of auditor's report issued on compliance for
major programs
Any
audit findings disclosed that are required to be reported
in accordance with section .5IO(a) ofCircular A-133?
Identification of major federal programs:
CFDA Number(s)
10.555
10.553
84.010
84.027
84.151
Dollar threshold used to distinguish between
Type A and Type B programs:
Auditee qualified as low-risk auditee?
114
Unmodified
_ _ : X : __ yes
no
_ _ : X : __ yes
none repmted
_
_ : X : __
yes
no
_
_.:.X.:..__yes
no
_
_ : X : __ yes
none reported
Unmodified
_ _:_X : __ yes
no
Name of Federal Program
or
Cluster
National School Lunch Program
National School Breakfast Program
Title I, Part A
IDEA - Part B Basic
IDEA- Part B Preschool
300,000
yes no
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EXHIBITK-6
BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE
OF
FINDINGS AND QUESTIONED COSTS (CO NT D)
FOR THE FISCAL YEAR ENDED JUNE 30 2014
Part Summary o Auditor s Results
State Awards Section
Internal Control over major programs:
(1) Material weakness(es) identified?
(2) Significant deficiencies identified that are not
considered to be material weakness( es )?
X yes
no
yes
_ _ _ X _ _
none reported
Type of auditor s report issued on compliance for
m jor progr ms
Any audit findings disclosed that are required to be reported
in accordance with N.J. Circular Letter 04-04?
Identification o major state programs:
GMIS Number(s)
495-034-5120-078
495-034-5120-083
495-034-5120-084
495-034-5120-089
495-034-5120-044
495-034-5120-002
Dollar threshold used to distinguish between
Type A and Type B programs:
Auditee qualified as low-risk auditee?
5
Modified
yes
no
Name o State Program
Equalization Aid
Education Adequacy Aid
Security Aid
Special Education Aid
Extraordinary Aid
TPAF Social Security
863,076
yes
:_:___
no
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BELLEVILLE TOWNSHIP S HOOL DISTRI T
SCHEDULE
OF
FINDINGS AND QUESTIONED COSTS
FOR
THE
FISCAL YEAR ENDED JUNE 30,2014
Part 2 Schedule
of
Financial Statement Findings
EXHIBIT K-6
This section identifies the reportable conditions, material weaknesses, and instances of noncompliance related to the
basic financial statements that are required to
be
reported
in
accordance with paragraphs 5.18 through 5.20
of
Government Auditing Standards
Finding 2014-001
With respect to fund deficits and budget line item overexpenditures:
The District ended the fiscal year with a General Fund operating deficit in the amount of 3,712,426 at
June 30, 2014.
We noted approximately ninety (90) budget line accounts were overexpended at June 30, 2014.
In
addition,
we noted the total General Fund budget appropriations were overexpended by 4,636,201
at
June 30,2014.
riteria
or
specific requirement
GAAP Technical Systems Manual; NJAC 6A:23A-16.1 0
Condition
The General Fund expenditures exceeded revenues resulting in an operating deficit at June 30, 2014. Numerous
budgetary line items expenditures exceeded available appropriations resulting in overexpenditures.
Context
See Finding 2014-001
The District incurred expenditures without sufficient appropriations available resulting in an operating deficit as
of June 30, 2014 in the General Fund.
Unknown.
Recommendation
The District develop, approve and implement a corrective action plan to eliminate the general operating
deficit at year end and to ensure internal control procedures are in place to prevent operating deficits
from occurring in future years.
Internal control procedures be reviewed and revised to ensure corrective measures are taken to prevent
the incurring of expenditures in excess of available budget appropriations during the year.
View
of
Responsible Officials
and
Planned Corrective Action
Management has reviewed this finding and has indicated that corrective action will be taken.
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BELLEVILLE TOWNSHIP SCHOOL
DISTRICT
SCHEDULE
OF
FINDINGS
AND
QUESTIONED COSTS
FOR
THE FISC L
YE R
ENDED JUNE 30, 2014
Part 2
Schedule
ofFinancial Statement Findings
EXHIBIT
K-6
This section identifies the reportable conditions, material weaknesses, and instances
of
noncompliance related to the
basic financial statements that are required to be reported
n
accordance with paragraphs 5.18 through 5.20
of
Government Auditing Standards
Finding
2014-002
We noted prior to the commencement of our audit, the District s financial accounting and reporting and payroll
computer systems crashed and many of the District financial transactions were lost n the system.
t
appears the
District s computer back-up procedures were inadequate.
Criteria or
specific requirement
Internal Controls Over Financial Reporting.
Condition
The procedures utilized by the District included a daily back-up which was saved and stored onsite.
t
appears
the back-up tape utilized was corrupt. As a result, the District was unable to retrieve information after the system
crashed. No offsite back-up
of
financial transactions was performed.
Context
See Finding 2014-002.
The District s financial transactions could be lost and unretrievable. The District re-entered transactions from
source documents that were lost as a result of the system crash while other information was retrieved by the
software vendor.
Inadequate data back-up and recovery procedures.
Recommendation
Internal controls be reviewed and revised to ensure daily computer back-up procedures are adequate to prevent the
loss
of
financial information and transactions n the future.
View
of
Responsible Officials and Planned Corrective Action
Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action is
taken.
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BELLEVILLE TOWNSHIP
S HOOL DISTRI T
SCHEDULE
OF
FINDINGS AND QUESTIONED COSTS
FOR
THE FISCAL YEAR ENDED JUNE 30, 2014
Part 2 Schedule
of
Financial Statement Findings
EXHIBITK-6
This section identifies the reportable conditions, material weaknesses, and instances
of
noncompliance related to the
basic financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20 of
Government Auditing Standards
Finding 2014-003:
Our audit with respect to the examination
of
claims:
We were not provided with invoices or other suppotting documentation for several payments issued during
the fiscal year.
In
some instances the invoices or supporting documentation were not clerically accurate or
sufficiently detailed to support the goods or services being paid for by the District.
Our audit revealed purchases were made and contracts were entered into prior to the approval and issuance
of
a purchase order (confirming orders).
riteria
or
specific requirement:
Internal controls over purchasing and accounts payable.
Condition:
Purchase of various goods or services were made which were not in accordance with the procedures specified in
Board policy and N.J.S.A. 18:19-4.
Context:
Effect:
Cause:
Of
the disbursements reviewed, we noted:
Thirty-one (31) disbursements were either not supported with a vendor invoice or the suppmting
documentation provided was insufficient. Total amount unsupported was 2,143,608.
Three (3) disbursements did not appear to be clerically accurate.
Twenty (20) disbursements were noted in which the date
of
the invoice preceded the purchase order date.
Lack
of
internal controls pertaining to vendor payments and purchases may result in unauthorized payments.
Unknown.
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BELLEVILLE TOWNSHIP
S HOOL
DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR
THE
FISCAL YEAR ENDED JUNE 30, 2014
Part 2 Schedule
of
Financial Statement Findings
EXHIBITK-6
This section identifies the reportable conditions, material weaknesses, and instances
of
noncompliance related
to
the
basic financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20
of
Government Auditing Standards
Finding 2014-003: Continued)
Recommendation:
Payments to vendors be made only after invoices or supporting documentation are provided, verified and in
agreement to amounts supported for payment.
n
all instances a properly executed purchase order be approved and issued prior to the purchase
of
goods or
rendering
of
services to ensure confirming orders do not occur.
View
of
Responsible Officials and Planned Corrective Action:
Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action is taken.
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BELLEVILLE
TOWNSHIP
SCHOOL
DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE
FISCAL
YEAR ENDED JUNE 30 2014
Part Schedule o Financial Statement Findings
EXHIBITK-6
This section identifies the reportable conditions material weaknesses and instances
of
noncompliance related to the
basic financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20 of
Government Auditing Standards
Finding 2014-004:
Our audit of the payroll tax reporting revealed the quarterly payroll tax filings were not always remitted to the
Federal and State Agencies in a timely manner. We noted penalties and interest were charged to the District on
numerous occasions for the late submissions
of
Federal Fotm 941 State Forms NJ927 and NJWR-30.
Criteria or specific reguirement:
Intemal controls pettaining to payroll tax reporting.
Condition:
The District has incurred penalties and accrued interest due to the late filing and payment of
payroll related
liabilities.
Context:
Effect:
Cause:
The District did not file Federal Form
94
for the quarters ending September 30 2013 December 31
2013 March 31 2014 or June 30 2014 by the required due dates. The District was unable to provide
documentation to support that forms were filed for all quarters for the school year.
The District did not file State Form 927 for the quarters ending September 30 2013 December 31 2013
or March 31 2014 by the required due dates.
The District is incurring penalty and interest charges for failing to file quarterly reports in a timely manner.
Unknown.
Recommendation:
The District remit its Federal and State quarterly payroll tax filing in a timely manner.
View of Responsible Officials and
Planned
Corrective Action:
Management has reviewed this finding and indicated it will revise its procedures
to
ensure corrective action is taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE
OF
FINDINGS
AND
QUESTIONED COSTS
FOR
THE
FISCAL YEAR ENDED JUNE 30, 2014
Part 2 Schedule
of
Financial Statement Findings
EXHIBITK 6
This section identifies the reportable conditions, material weaknesses, and instances of noncompliance related to the
basic financial statements that are required to be reported
in
accordance with paragraphs 5.18 through 5.20
of
Government Auditing Standards
Finding 2014-005
Our audit revealed that the balance in the payroll deduction account was not sufficient to pay the amounts due to
the various agencies at June 30, 2014. An audit adjustment was required to record an interfund due from the
General Fund in the amount of 365,404 at year end.
Criteria or
specific requirement:
Internal controls over payroll processing and reporting,
Condition:
See Finding 2014-005
Context
The District payroll agency account balance
of
702,492 at June 30, 2014 was insufficient to pay the amounts
due at year end by 365,404.
An interfund balance was required from General Fund to fund liabilities in excess of the available balance at year
end in the payroll deduction account.
Unknown.
Recommendation
The required amounts be deposited into the payroll agency account for each payroll period during the year.
View
of
Responsible Officials and Planned Corrective Action
Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action is taken.
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BELLEVILLE TOWNSHIP
SCHOOL
DISTRICT
SCHEDULE OF FINDINGS
ND
QUESTIONED COSTS
FOR
THE FISCAL YEAR ENDED JUNE 30, 2014
Part 2 Schedule
of
Financial Statement Findings
EXHIBITK 6
This section identifies the reportable conditions, material weaknesses, and instances of noncompliance related to the
basic financial statements tliat are required to
be
reported
in
accordance with paragraphs 5.18 through 5.20
of
Government Auditing Standards
Finding 2014-006
With respect to year end encumbrances and accounts payable:
Our audit of year end open purchase orders
in
the General and Special Revenue Funds revealed certain
encumbrances should have been classified as accounts payable and certain encumbrances were deemed
overstated at June 30, 2014. Audit adjustments were maae to reclassifY and cancel these purchase orders,
accordingly.
Our audit of payments made subsequent to June 30,2014 revealed unrecorded liabilities and encumbrances
that were not reflected in the Distnct's accounting records at year end. Audit adjustments were made to
record these amounts.
Criteria or specific requirement:
Internal controls over year end closing procedures of open orders.
Condition
Certain encumbrances were determined to not have been classified properly, or were overstated and deemed
invalid at year end. n addition, certain encumbrances and accounts payable were not recorded at year end.
Context
Seven (7) purchase orders classified as reserve for encumbrances should have been classified as accounts
payable totaling 24 I ,645 in the General Fund and 22,989 in the Special Revenue Fund.
Reserve for encumbrances recorded in the General and Special Revenue Funds totaling 239,233 were
determined to be overstated.
Liabilities and encumbrances for retiree compensated absence payouts, legal expenses, worker compensation
contribution, tuition payments and gasoline for District vehicles were not recorded at June 30,2014.
o Total unrecorded payables were 269,062
o Total unrecorded reserve for encumbrances were 35,000
Financial statements do not properly reflect liabilities, expenditures and fund balance at year end.
Unknown.
Recommendation
Procedures be reviewed and revised to ensure open purchase orders are reviewed at year end for appropriateness and
proper classification as accounts payable or encumbrances.
Greater care be taken at year end to ensure all liabilities and encumbrances are recorded in the District's accounting
records at June 30.
View of Responsible Officials and Planned Correct ive Action
Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action
is
taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS
AND
QUESTIONED COSTS
FOR
THE
FISCAL YEAR ENDED JUNE 30,2014
Part 2 Schedule ofFinancial Statement Findings
EXHIBITK 6
This section identifies the reportable conditions, material weaknesses, and instances
of
noncompliance related to the
basic financial statements that are required to be reported in accordance with paragraphs 5 18 through
5.20
of
Government Auditing Standards
Finding 2014-007
Our audit of the District's year end bank reconciliation balances revealed the District's general operating account
cash balance was in an overdraft or deficit position of 1,365,369 at June 30, 2014. In addition, we noted the
workers' compensation claims account cash balance was also in
an
overdraft or deficit position of
8,010
at year
end.
Criteria or
specific requirement:
Internal controls over cash disbursements.
Condition:
Cash balances at June
30, 2014
in the General Fund and Internal Services were in deficit positions.
Context
See finding
2014-007
Funds are not available for checks issued for payment.
Unknown.
Recommendation
Internal controls be enhanced to ensure cash balances are monitored to prevent cash overdrafts from occurring.
View
of
Responsible Officials
and
Planned Corrective Action
Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action is taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR
THE FISCAL YEAR ENDED JUNE 30 2014
Part
Schedule
ofFinancial Statement Findings
EXHIBITK 6
This section identifies the reportable conditions, material weaknesses, and instances
o
noncompliance related to the
basic financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20 o
Government Auditing Standards
Finding 2014-008
We noted the financial transactions o a 1,025,000 capital lease bank account with First Hope Bank for a roofing
project and a 1,950,000 capital lease bank account with TD Bank for security and network upgrades were not being
recorded in the District's accounting records. n addition, the payments made by the banks (fiscal agents) to vendors
from these accounts were not included
on
the bills list and therefore not approved by the Board in the official
minutes.
Criteria or specific requirement:
State Department o Education's GAAP Technical Accounting Manual
Condition:
The transactions relating to the
roo
project and security/network upgrades capital lease bank accounts
maintained by the Fiscal Agents were not reported on the District's accounting records or included
in
the
Treasurer's report.
Context
The transactions related to the 1,025,000 roof project capital lease and 1,950,000 security/network upgrades
capital lease bank accounts were not reflected in the District's records during the year and, therefore, were not
included
in
the Treasurer's report.
Accounting records did not reflect all financial transactions o the District.
Unknown.
Recommendation
The District record all the transactions o its capital lease bank accounts
in
their financial accounting records. n
addition, payments to vendors be included
on
the bills list presented to the Board, be approved by Board action and
be made part o the official minutes prior to payment by the Fiscal Agent.
View of Responsible Officials and Planned Corrective Action
Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action is taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE
30 2014
Part
Schedule
ofFinancial Statement Findings
EXHIBITK 6
This section identifies the reportable conditions, material weaknesses, and instances
of
noncompliance related to the
basic financial statements that are required to be reported in accordance with paragraphs 5.18 through 5.20 of
Government Auditing Standards
Finding 2014 011:
Our audit of the District's capital assets revealed capital assets were not updated for
2
13/2014 school year
additions and deletions.
Criteria or specific requirement:
Generally Accepted Accounting Principles.
Condition:
The District did not update its capital asset records for additions and deletions for the fiscal year ended June 30,
2014.
Context:
Effect:
Cause:
The District's total governmental activities and business-type activities capital assets and accumulated
depreciation, as reported in the CAFR, are 23, 0,863 and 74,851,174, respectively. Current year additions, as
reflected in the District's budgetary reporting system, were 2,756,190.
The District capital asset records may not agree with actual values of District owned assets.
Capital assets acquired during the year were not identified and recorded in the District' s capital asset accounting
records.
Recommendation:
The District update its capital asset records on a timely basis to reflect all current year activity.
View
of
Responsible Officials and Planned Corrective Action:
Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action is taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE
OF FINDINGS AND QUESTIONED
COSTS
(CONT D)
FOR
THE
FISCAL YEAR ENDED
JUNE
30, 2014
Part Schedule
of
Federal and State ward Findings nd Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and New
Jersey
OMB s
Circular 04-04, as amended.
CURRENT YEAR FEDERAL AWARDS
Finding 2014-012:
Our audit of salary charges to the NCLB Title I grant program revealed the following:
Employees and their respective salaries charged to the program were not formally approved
in
the
Board minutes.
An instance was noted for an employee charged to the program who was not included on the time and
effort activity report for Title I
Federal Program
Information:
Title I
84.010A
Criteria
or
Specific Requirement
Federal Grant Compliance
Supplement-
Employee Time and Effort
Condition:
Salaries of individuals charged to the Title I grant program were not approved by the Board. The time and effort
report was not provided for one
I)
individual.
Questioned Costs:
Undeterminable.
Context:
Effect:
Cause:
We noted none of the individuals charged to Title I were approved in the official minutes
by
grant title and salary
amount allocated. We noted the time and effort repmt was not provided for one
I)
individual.
Personnel charged to Federal grants may not be allowable grant charges.
Unknown.
Recommendation:
Employees and their respective salaries charged to the NCLB Title I grant program be formally approved in the
Board minutes. In addition, all employees charged to the NCLB Title I grant program be included on the time and
effort activity report to support their salary amount charged to the grant program.
View
of
Responsible Officials
and
Planned
Corrective
Action:
Management has reviewed this finding and indicated it will review and revise its procedures to ensure corrective
action is taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT'D)
FOR
THE FISCAL YEAR ENDED JUNE 30, 2014
Part Schedule ofFederal nd State ward Findings nd Questioned Costs
EXHIBITK 6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, s required by OMB Circular A-133 and New
Jersey OMB's Circular 04-04, as amended.
CURRENT YEAR FEDERAL AWARDS
Finding 2014-013:
Our audit of the NCLB Title I grant program revealed employee benefits charged were not properly suppmied
by
a
detail calculation nor were they charged on a monthly basis. We noted the District made n entry at year end to
reallocate General Fund employee benefit charges to the grant program.
Federal Program
Information:
Title
84.010A
Criteria or
Specific
Requirement
Federal Grant Compliance Supplement Allowable Costs/Cost Principles
Condition:
See Finding 2014-013.
Onestioned Costs:
Undeterminable.
Context:
Effect:
Canse:
The District was unable to provide us with documentation to support the amount charged to the Federal grant
program for employee benefits in the amount of 126,472.
Employee benefits charged to Federal grants may not be for allowable charges.
District did not prepare a detailed analysis of employee benefit costs allocated to the grant program.
Recommendation:
Employee benefits charged to the NCLB Title grant program be supported
by
an analysis detailing the basis for the
amount allocated to the program and the benefits be charged when paid throughout the grant period.
View of Responsible Officials and
Planned
Corrective Action:
Management has reviewed this finding and indicated it will review and revise its procedures to ensure corrective
action is taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT'D)
FOR THE FISCAL YEAR ENDED JUNE 30, 2014
Part Schedule
of
Federal and State ward Findings
nd
Questioned Costs
EXIllBIT K-6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and New
Jersey
OMB s
Circular 04-04, as amended.
CURRENT YEAR FEDERAL AWARDS
Finding 2014-014:
Our audit revealed charges to the NCLB Title I grant program for payments made to Standard Solutions, LLC for
professional development cost that appear to be for all District staff rather than specific to Title I staff members.
Federal
Program Information:
Title I
84.0IOA
Criteria or Specific Requirement
Federal Grant Compliance Supplement- Allowable Costs/Cost Principles
Condition:
See Finding 2014-014.
Questioned Costs:
Unknown.
Context:
Effect:
Canse:
The District charged 162,192 to the program for Standard Solutions, LLC for professional development charges
that appear to include non-Title I District employees.
Professional development amounts charged to the grant program may not be for allowable charges for eligible
employees.
Unknown.
Recommendation:
The District discontinue the practice of charging the Title I grant programs for professional development costs for
District staff members not related to the Title I program.
View of Responsible Officials and Planned Corrective Action:
Management has reviewed this finding and indicated it will review and revise its procedures to ensure corrective
action is taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)
FOR
THE
FISCAL YEAR ENDED JUNE 30, 2014
Part Schedule
of
Federal
and
State Award Findings
and
Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies, material weaknesses, and instances
of
noncompliance, including
questioned costs, related
to
the audit of major federal and state programs, as required by OMB Circular A-133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENT YE R
FEDER L
AWARDS
Finding 2014-015:
Our audit of the applications for free and reduced price meals noted the following exceptions:
Three (3) applications approved as free did not meet the eligibility requirement for free meals. These
applications should have been approved for reduced price meals.
One I) application approved as reduced did not meet the eligibility for reduced price meals. Thi
application should have been denied.
Two (2) applications approved as reduced met the eligibility requirements of free meals. These applications
should have been approved for free meals.
Four (4) applications were not located and, therefore, unavailable for audit. The students selected on these
applications were all classified as reduced
on
the list provided for audit.
We noted the applications for the 2013/2014 school year were not filed in an orderly and systemic manner.
Federal Program
Information:
National School Lunch Program
National School Breakfast Program
10.555
10.553
Criteria or Specific Requirement
Federal Grant Compliance Supplement- Eligibility
Condition:
See Finding 2014-015.
Questioned Costs:
Undeterminable.
Context:
Effect:
Six (6)
of
the seventy one (71) students selected were reported in a category different from the category the
individual was determined to be eligible. Additionally, the District was unable to locate the lunch applications
for four (4) students selected.
Meals claimed for reimbursement may be inaccurately reported.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS
ND
QUESTIONED COSTS (CONT D)
FOR
THE FISCAL YEAR ENDED JUNE 30,2014
Part
Schedule of
Federal and State Award Findings
and
Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs,
as
required by OMB Circular A-133 and
New
Jersey
OMB s
Circular 04-04, as amended.
CURRENT YEAR FEDERAL AWARDS
Finding 2014-015: (Continued)
Cause:
Eligibility
of
individuals was not properly determined or supported by the District.
Recommendation:
Greater care be exercised in the determination
of
eligibility for free and reduced price meals of the child nutrition
programs.
In
addition, applications be filed in an orderly and systemic manner in accordance with the requirements
of
the child nutrition programs.
View of Responsible Officials
and
Planned Corrective Action:
Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action
is
taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)
FOR
THE FISCAL
YEAR ENDED
JUN
30, 2014
Part Schedule ofFederal nd State ward Findings nd Questioned Costs
EXHIDITK-6
This section identifies the significant deficiencies, material weaknesses, and instances
of
noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and
New
Jersey
OMB s
Circular 04-04, as amended.
CURRENT YEAR STATE AWARDS
Finding 2014-016
With respect to fund deficits and budget line account overexpendiutres:
The District ended the fiscal year with a General Fund operating deficit in the amount of 3,712 ,426 at
June 30,2014.
We noted approximately ninety (90) budget line accounts were overexpended at June 30, 2014. n
addition,
we
noted the total General Fund budget appropriations were overexpended by 4,636,201 at
June 30, 2014.
State Program Information:
Equalization Aid
Education Adequacy Aid
Special Education Aid
Security Aid
Criteria or
Specific Requirement
495-034-5120-078
495-034-5120-083
495-034-5120-089
495-034-5120-084
State Grant Compliance
Supplement-
State Aid
Public-
Special Tests and Provisions
Condition:
See Finding 2014-16.
Questioned
Costs:
Unknown.
Context:
See Finding 2014-16.
Effect:
The District incurred expenditures without sufficient appropriations available resulting in an operating deficit as
of
June 30, 2014 in the General Fund.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)
FOR THE FISCAL YEAR ENDED JUNE 30, 2014
Part3 Schedule ofFederal and State ward Findings and Questioned Costs
EXHffiiTK-6
This section identifies the significant deficiencies, material weaknesses, and instances
of
noncompliance, including
questioned costs, related to the audit of major federal and state programs, as required by OMB Circular A 133 and New
Jersey
OMB s
Circular 04-04, as amended.
CURRENT YEAR STATE AWARDS (Continued)
Finding 2014-016 (Continued)
Cause:
Unknown.
Recommendation:
The District develop, approve and implement a corrective action plan to eliminate the general operating
deficit at year end and to ensure internal control procedures are in place to prevent operating deficits from
occurring in future years.
Internal control procedures be reviewed and revised to ensure corrective measures are taken to prevent the
incurring of expenditures
in
excess of available budget appropriations during the year.
View of Responsible Officials and Planned Corrective Action:
Management has reviewed this finding and indicated it will revise its procedures to ensure corrective action is taken.
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BELLEVILLE TOWNSHIP
SCHOOL
DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)
FOR
THE FISCAL YEAR ENDED JUNE 30,2014
Part Schedule ofFederal nd State ward Findings nd Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENT YEAR STATE AWARDS
Finding 2014-017:
With respect to travel and expense reimbursements, our audit noted the following:
The District did not establish by Board resolution a maximum travel expenditure amount for the
budget year for which the District will not exceed,
as
required by Board policy.
Purpose and relevance statements were not attached to the travel requests or purchase orders as
required
by
Board policy.
Instances for reimbursement of travel expenses to certain individuals for travel events that were not
pre-approved by the Board
as
required by Board policy.
Instance where the hotel room rate paid was in excess
of
the GSA approved room rate
for
the
respective event location.
State
Program Information:
Equalization Aid
Education Adequacy Aid
Special Education Aid
Security Aid
495-034-5120-078
495-034-5120-083
495-034-5120-089
495-034-5120-084
Criteria or
Specific Requirement
State Grant Compliance Supplement State Aid
Public
Special Tests and Provisions
Condition:
Certain travel expense procedures and policies are not in accordance with Board policy and State travel expense
guidelines.
Questioned Costs:
Unknown.
Context:
Effect:
See Finding 2014-017.
Certain travel expense reimbursements and costs may not be allowable per Board policy and State travel expense
guidelines.
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BELLEVILLE
TOWNSIDP SCHOOL
DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)
FOR THE FISCAL YEAR ENDED JUNE 30,2014
Part Schedule
of
Federal and State Award Finding f
nd
Questioned Costs
EXHIBITK 6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENT YEAR STATE AWARDS
Finding 2014-017: (Continued)
Cause:
Unknown.
Recommendation:
The District annually establish by Board resolution a maximum travel expenditure amount which it will
not exceed for the budget year, in accordance with Board policy.
With respect to travel expense reimbursements, the District adhere to Board policy to ensure:
o Purpose and relevance statements are attached to travel requests or purchase orders.
o All travel events be pre-approved by Board resolution.
o Lodging room rates be verified to the GSA approved rates prior to booking overnight travel.
View of Responsible Officials
and Planned
Corrective Action:
Management has reviewed this finding and indicated it will review and revise its procedures
to
ensure corrective
action s taken.
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BELLEVILLE
TOWNSHIP
SCHOOL DISTRICT
SCHEDULE
OF
FINJ)INGS AND QUESTIONED COSTS (CONT D)
FOR
THE
FISCAL YEAR ENDED JUNE 30, 2014
Part Schedule ofFederal nd State ward Findings nd Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENT YEAR
STATE AWARDS
Finding
2014-018:
Our audit revealed certain certificated staff salaries that were not classified and charged to the proper budget account
lines
in
accordance with the Uniform Minimum Chart of Accounts.
State
Program Information:
Equalization Aid
Education Adequacy Aid
Special Education Aid
Security Aid
495-034-5120-078
495-034-5120-083
495-034-5120-089
495-034-5120-084
Criteria
or Specific
Requirement
State Grant Compliance
Supplement-
State Aid
Public-
Special Tests and Provisions
Condition:
School administrative salary expenditures were classified and charged to General Administration and
Improvement of Instruction Services line accounts rather than School Administration budget line accounts.
Questioned Costs:
Unknown.
Context:
Effect:
Cause:
Two (2) principals and the athletic director were not charged to the school administration budget line accounts.
The District
is
not
in
compliance with the State
of
New Jersey Grant Compliance Supplement
and
Uniform
Minimum Chart
of
Accounts.
Unknown.
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BELLEVILLE TOWNSHIP
SCHOOL
DISTRICT
SCHEDULE
OF
FINDINGS
AND
QUESTIONED
COSTS (CONT D)
FOR THE
FISCAL YEAR
ENDED
JUNE 30,2014
Part Schedule
t f
Federal and State ward Findings and Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies material weaknesses and instances of noncompliance including
questioned costs related to the audit
of
major federal and state programs as required by OMB Circular A-133 and
New
Jersey
OMB s
Circular 04-04 as amended.
CURRENT
YEAR STATE AWARDS
Finding 2014-018:
(Continned)
Recommendation:
A review be made
of
certificated staff to ensure their salaries are charged to the proper budget account lines in
accordance with the Uniform Minimum Chart
of
Accounts for New Jersey Public Schools.
View of Responsible Officials and
Planned
Corrective Action:
Management has reviewed this finding and indicated it will review and revise its procedures to ensure corrective
action is taken.
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BELLEVILLE TOWNSHIP
SCHOOL
DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)
FOR
TH FISCAL YEAR ENDED
JUNE
30,2014
Part Schedule
of
Federal and State ward Findings
nd
Questioned Costs
EXHIBITK 6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENT YEAR STATE A WARDS
Finding 2014-019:
With respect to the monthly financial reports of the Board Secretary and Treasurer of School Monies:
We noted the monthly Board Secretary s reports were not submitted to and approved by the Board for the
entire 2013/2014 school year, as required by N.J.S.A. 8A: 17-36.
The Treasurer s monthly reports or similar type cash reports were not completed timely and submitted to the
Board for their approval for the months
of
December 2013 through June 30,2014. We noted the Treasurer
resigned in 2014, effective December 31, 2013.
State
Program
Information:
Equalization Aid
Education Adequacy Aid
Special Education Aid
Security Aid
Criteria
or Specific Requirement:
495-034-5120-078
495-034-5120-083
495-034-5120-089
495-034-5120-084
State Grant Compliance
Supplement
State Aid
Public
Special Tests and Provisions
Condition:
See Finding 2014-019.
Questioned Costs:
Unknown.
Context:
See Finding 2014-019.
Effect:
Financial statements and transactions could be misstated without proper and timely completion, submission and
approval of Monthly Board Secretary reports and Treasurer s reports.
Cause:
Unknown.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)
FOR THE FISCAL YEAR ENDED JUNE 30, 2014
Part Schedule ofFederal and State ward Findings nd Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENT YEAR STATE AWARDS
Finding 2014-019: (Continued)
Recommendation:
The monthly financial reports
of
the Board Secretary be submitted to and approved
by
the Board
in
accordance with the requirements ofN.J.S.A. 8A: 17-36.
The monthly reports of the Treasurer or similar reports of the Board designee be completed and submitted to
the Board
for
approval
in
a timely manner
in
accordance with N.J.S.A. 18A:l7-36 or 18A:l7-9, as required.
View of Responsible Officials and
Planned
Corrective Action:
Management has reviewed this finding and indicated it will review and revise its procedures to ensure corrective
action
is
taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT'D)
FOR
THE
FISCAL YEAR ENDED JUNE 30,2014
Part Schedule ofFederal and State ward Findings nd Questioned Costs
EXIDBIT K-6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and New
Jersey OMB's Circular 04-04, as amended.
CURRENT YEAR STATE A WARDS
Finding 2014-020:
The District had aggregate budget transfers to administrative budget lines that on a cumulative basis exceeded
10 of the total of the advertised administrative budget line. The cumulative transfers over 10 were noted
prior to the appointment of the State Monitor and they were not submitted to nor approved by the Executive County
Superintendent.
State Program Information:
Equalization Aid
Education Adequacy Aid
Special Education Aid
Security Aid
495-034-5120-078
495-034-5120-083
495-034-5120-089
495-034-5120-084
Criteria
or Specific Requirement:
State Grant Compliance Supplement State Aid Public Special Tests and Provisions
Condition:
The monthly and year to date 0 transfer reports were not submitted to the Executive County Superintendent or
State Monitor. Certain transfers which exceeded the maximum allowed were not submitted to the County for
approval.
Questioned Costs:
Unknown.
Context:
Effect:
Cause:
Monthly transfer repmts were not submitted to the Executive County Superintendent. Transfers were made into
General Administration and Central Services exceeding 10 which require approval of the Executive County
Superintendent or the State Monitor.
The District is not
in
compliance with State Aid Grant program requirements.
Unknown.
Recommendation:
Executive County Superintendent's or State Monitor's approval be sought as required for all transfers that exceed ten
percent (10 ) of the original advertised budget appropriation amount
in
accordance with
N.J.A.C.
6A:23A-13.3(g).
View of Responsible Officials and
Planned
Correct ive Action:
Management has reviewed this finding and indicated it will review and revise its procedures to ensure corrective
action is taken.
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BELLEVILLE
TOWNSHIP
SCHOOL
DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)
FOR THE FISCAL YEAR ENDED JUNE
30, 2014
Part Schedule
of
Federal
nd
State Award Findings
nd
Questioned Costs (Cont d)
EXHIBITK 6
This section identifies the significant deficiencies, material weaknesses, and instances
of
noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required
by
OMB Circular A-133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENT YEAR STATE AWARDS (Continued)
Finding 2014-021 (Continued)
Context:
Effect:
Cause:
Purchases and contracts for instructional support, outsourcing of Information Technology Department, technical
support for the telephone internet technology management system, computer supplies, professional development
services, grant writing, payment of lunch aides to the food services management company and other services
were made in excess of the bid threshold for which documents were unavailable to determine if awards were
procured through public bids advertised or other required processes in accordance with Public School Contracts
Law.
Purchases for printing services and computer supplies were made in excess
of
the quote threshold for which
documents were unavailable to determine if quotations were solicited in accordance with the Public School
Contracts Law.
Noncompliance with requirements
of
the Public School Contracts Law.
Unknown.
Recommendation:
Internal control procedures over purchasing be reviewed and revised to ensure all contract awards and
purchases which exceed the bid threshold are made in accordance with the requirements of the Public
School Contracts Law.
In
addition, documentation be maintained on file and made available for audit to
support the District s compliance with the procedures required under the Public School Contracts Law
(N.J.S.A. 8A: 18A).
Purchasing procedures be enhanced to ensure competitive quotations are solicited and attached to purchase
orders for
all
contract awards that exceed the quote threshold in accordance with N.J.S.A. 8A: 18A-37(a).
All payments for services unrelated and outside of the food service management company s contract be
procured separately
in
accordance with N.J.A.C. 5:34-4.4(b).
Views of Responsible Officials
and
Planned Corrective Action Plan:
Management has reviewed this finding and has indicated it
will
review and revise its procedures to ensure
corrective action is taken.
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BELLEVILLE
TOWNSHIP
SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT'D)
FOR
THE
FISCAL
YEAR ENDED JUNE 30,2014
Part Schedale ofFederal and State ward Findings nd Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit of major federal and state programs, as required by OMB Circular A-133 and New
Jersey OMB's Circular 04-04, as amended.
CURRENT YEAR STATE AWARDS
Finding 2014-022
We noted an emergency contract award for an inventory of district hardware and IT infrastructure assets as well as
IT support for a ninety day period where the written statement of emergency from District personnel required
by
N.J.S.A. lSA:ISA-7 was not available for review. In addition, we noted the required notification to the Executive
County Superintendent
of
an emergency contract award does not appear to have been made
in
accordance with
N.J.A.C. 5:34-6.1.
State
program
information:
Equalization Aid
Education Adequacy Aid
Special Education Aid
Security Aid
495-034-5120-078
495-034-5120-0S3
495-034-5120-0S9
495-034-5120-0S4
Criteria or specific requirement:
State Grant Compliance Supplement- State
Aid
Public- Special Tests and Provisions
NJSA SA: SA- Public School Contracts Law
NJAC 5:34-6.1- Emergency Contracts
Condition:
See Finding 2014-022.
Questioned Costs:
Unknown.
Context:
Effect:
Cause:
We noted one (I) emergency contract awarded
in
which the District was unable to provide documentation of the
required written statement
of
emergency and notification to the Executive County Superintendent.
Noncompliance with requirements
of
the Public School Contracts Law.
Unknown.
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BELLEVILLE
TOWNSHIP
SCHOOL DISTRICT
SCHEDULE
OF
FINDINGS AND QUESTIONED COSTS (CONT D)
FOR
THE FISCAL YEAR ENDED JUN 30, 2014
Part Schedule ofFederal nd State ward Findings nd Questioned Costs
EXHffiiTK 6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A 133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENTYEARSTATEAWARDS
Finding 2014-022 (Continued)
Recommendation:
Emergency contract awards be supported by the required written statement of emergency and notification of
emergency contract award be made to the Executive County Superintendent as required by N.J
.A.
C. 5:34-6.1.
Views
of
Responsible Officials
and Planned
Corrective Action Plan:
Management has reviewed this finding and has indicated it will review and revise its procedures to ensure
corrective action
is
taken.
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BELLEVILLE TOWNSIDP SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONT D)
FOR TH FISCAL YEAR ENDED JUNE 30, 2014
Part Schedule ofFederal nd State ward Findings nd Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies, material weaknesses, and instances of noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A 133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENT YEAR STATE AWARDS
Finding 2014-023 (Continued)
Recommendation:
Change orders to original contract awards for capital projects be approved by the Board and made part of the official
minutes in accordance with N.J.A.C. 6A:23A-2l.l(c)
Views
of
Responsible Officials
and Planned
Corrective Action Plan:
Management has reviewed this finding and has indicated it will review and revise its procedures
to
ensure
corrective action is taken.
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BELLEVILLE TOWNSHIP SCHOOL DISTRICT
SCHEDULE OF FINDINGS
AND
QUESTIONED COSTS (CONT D)
FOR
THE FISCAL YEAR ENDED JUN 30, 2014
Part Schedule ofFederal nd State ward Findings nd Questioned Costs
EXHIBITK-6
This section identifies the significant deficiencies, material weaknesses, and instances
of
noncompliance, including
questioned costs, related to the audit
of
major federal and state programs, as required by OMB Circular A-133 and New
Jersey OMB s Circular 04-04, as amended.
CURRENT YEAR STATE AWARDS
Finding 2014-024
A review of students Individual Education Plans (IEP) revealed certain students reported on the application for
State Extraordinary Aid did not have an intensive related service specifically included in their IEP. A minimum
of
one intensive related service is required to be included
in
a student s IEP to be eligible for inclusion on the
Extraordinary Aid application.
State program information:
Extraordinary Special Education Aid 100-034-5120-473
Criteria or specific requirement:
State Grant Compliance Supplement- Extraordinary Aid- Eligibility
Condition:
Certain students inclu
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