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Presented by the Charlotte-Mecklenburg Schools’

Accounting/Internal Audit Department

Working Together is the Key to Financial Success

EAST ZONE

April 26, 2012

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Betty Mattos (ext. 5513) –Director of Accounting

Russ Pressley (ext. 6387) – Senior Auditor

Beverly Kubota (ext. 6374) – Senior Accountant

Janet Perrien (ext. 6352) – Senior Accountant

Leslie German (ext. 6828) – Accountant/Auditor

Lynette Stover (ext. 6397) – Accountant/Auditor

Kelly Jones (ext. 6372) – Accountant/Auditor

Lewkytra Weddington (ext. 6326) – Accountant/Auditor

Tasha Williams (ext. 6346) – Cash Accountant

Iris Jackson (ext. 6327)- Fixed Asset Accountant

Accounting Department Contacts

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AGENDA

• State Laws Pertaining to Finance

• School Accounting • Audit Overview• Responsibilities of Principal and

Treasurer• Accounting Updates• Accounting Training

Opportunities• CMS Pool• Accounting Resources

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State Laws Pertaining to

Finance

• §115C-288 Principal Duties• §115C-438 Provisions for Disbursement of

State Money• §115C-441 Budgetary Accounting for

Appropriations• §115C-445 Daily Deposits• §115C-447 Annual Independent Audit• §115C-448 Special Funds of Individual

Schools• §115C-523 Care of School Property

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School Accounting

Keeping track of activities at the

school

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Receipts and Disbursements Monthly Report

Consist of an entire month’s daily posting of transactions.

Reconciled with the monthly bank statement.

Must be balanced. Due to be completed by 5:00 pm on the

10th of the following month (unless the 10th falls on a weekend or holiday, then due the next business day).

Print and sign all forms and keep on file for next audit

See handout as an example

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SchoolFunds Online

• Schools required to use new SchoolFunds Online accounting package

• Allotment funds can be used to purchase

• Must purchase SchoolFunds checks-SFO receipts are optional (checks order from bank is prohibited)

• Contact TRA (1-866-700-4872) for ordering instructions

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Sales and Use Tax Basics

• Schools receive at least 2.5% sales tax refund on purchased goods

• Refundable Items include:– Any NC sales tax paid to a vendor or

the NC Department of Revenue on tangible personal property used or consumed.

– NC sales tax on hotel/motel bills but not occupancy tax

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Sales and Use Tax Basics

• Non-Refundable Items include:– School Sales of Items– Employee Reimbursements

• School Funds should be set up to track your sales tax information – There should be a “Y” in the boxes next to

Receipt Tax Reporting and Sales Tax Reporting on the Setup screen in School Funds

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Sales and Use Tax Procedures

• Use tax – Out of State vendor purchases where the vendor is not registered to collect and remit to NC Dept of Revenue

• Sales tax – Resale (collection of money) of items at school

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Sales and Use Tax Procedures(Cont’d)

• Forms to Use– E595E – takes the responsibility off

vendor and puts it on school• Should be marked “Single Use

Only”– Sales and Use Tax Worksheet to Cash

Accountant• Submit by the 10th of the month • Minimum submission of $10 or

more which includes all CMS related payments (media fees, sales tax, etc)

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Audit Overview

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School Audits

• Financial audits are done once a year for each school

• Audits should be used as tools to identify where there are weak controls

• Property audits (≥$5000 per item) are performed at 25% of the schools each year

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Why Does CMS Perform Audit of Schools and Departments?

• NC State Statute §115C-447 requires that each local school administrative unit have its financial records and the financial records of individual schools audited as soon after the close of each fiscal year as possible-by an outside accounting firm.

• CMS consists of 170 + schools and a multitude of departments. A single accounting firm could not perform an audit of all of CMS within a reasonable time. Therefore, the CMS Accounting Department performs the audits of the schools and departments. These audits are a component of the overall school system’s annual financial audit.

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Types of Audits

• Annual– School Accounting– Fixed Assets– Inventory Observation

• Short Period– Change in Treasurer– Change in Principal

• Special Investigative Audits

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Purpose Audits Serve

To review financial records to ensure compliance with the Board of Education (BOE) policies and state laws.

To ensure financial policies and procedures are consistently followed by all schools.

To identify and help correct procedural and processing errors.

To provide guidance pertaining to CMS policies and procedures

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What is Audited at Schools?

Deposits and Disbursements Fund Raising Report and

Activities FLSA Kronos Time Reports P-Card Activity Contributions 1099 Payments Sales and Use Tax

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When Will You Be Audited?

Your audit will be between early fall and May 31 of the school year.

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How Many Days Will My Audit Take?

• Elementary: 2 days

• Middle: 3 days• High: 5 days

Treasurers have one week from the date of the exit conference to provide any required documentation.

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Top Audit Exceptions

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Top 10 CMS Audit ExceptionsFiscal Year End 06/30/2012

Ranking Exception # of Exceptions

1 Fair Labor Standards Act 76

2 P-Card Violations 66

3No Purchase Order for purchases over $750, printers, computers, audio-visual, telecommunications equipment, furniture, bus transportation using an approved vendor 40

4 Teachers Holding Money Overnight 38

5 No Fund-Raising Report or not complete 33

6 Form 5137b or thank you letter not given for contribution to school 22

7 1099 Violations 20

8Zone Superintendent approval not obtained for disbursement exceeding $1,000 or any amount to the principal or school treasurer 18

9Charlotte Mecklenburg BOE fees not remitted or not remitted in a timely manner 15

10 No signatures on disbursements or initials on facsimile stamps 14

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Audit Statistics District Wide

2010-2011

– 180 Schools– 51 Schools with Zero Exceptions

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What Happens After My Audit?

• An audit letter will be mailed to you no later than 60 days from the beginning of your audit.

• A response to your audit letter is due within 10 days of receipt of your letter from the principal to the Superintendent.

• Remember to complete your Audit Satisfaction Survey

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How Do I Get A Clean Audit?

• Review audit letter from the prior audit• Review audit comments sheet (A-3)

from prior audit conference• Follow all year-end memos• Review all forms (i.e. journal entries,

payment vouchers, checks, fundraising reports and other forms, time records, P-Card monthly statements and forms) to ensure they have the proper approval and signatures

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How Do I Get A Clean Audit?

• Remit all sales tax for fundraising events and purchases from out-of-state vendors

• Keep track of all donations and remember to send a Thank You letter or CMS Form 5137.B. – CMS requires a Thank You letter for all

donations.– Received an amount exceeding $2,000? Send

it downtown.• Review Monthly - use School Funds to find

your ten largest dollar amount deposits and checks. Find all related PO’s, invoices, vouchers, ticket seller reports, turn-in forms and deposit slips for each one.

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How Do I Get A Clean Audit?

• Prior to the audit, be sure your Fundraising Summaries, Ticket Seller Reports (TSR) and Tests of Inventories (TOI) are complete.

• Be sure you completed a Picture Reconciliation (accompanied by supporting records such as class rosters, excel spreadsheets, etc.) Forms are available on the Accounting website to help with this.

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How Do I Get A Clean Audit?

• Each month pick a pay period and check the leave slips to ensure they are complete and on file.

• Make sure comp time is not over the max of 45 hours.

• Be sure checks have supporting documentation (i.e. payment voucher, invoice, receipt)

• For payments for services (1099), be sure that a W-9 is on file for each check.

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How Do I Get A Clean Audit?

• On a monthly basis select a few large P-card transactions from the summaries. Make sure all of the invoices and packing slips attached?

• Use the Pre-Audit checklists and Internal Audit Preparation checklist (this is sent prior to the audit by your auditor).

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Responsibilities of Principals and School Treasurers

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State Statutes-Principal Responsibility

(a) To Grade and Classify Pupils

(b) To Make Accurate Reports to the Superintendent and to the Local Board

(c) To Improve Instruction and Community Spirit

(d) To Conduct Fire Drills and Inspect for Fire Hazards

(e) To Discipline Students and to Assign Duties to Teachers

(f) To Protect School Property

(g) To Report Certain Acts to Law Enforcement and the Superintendent

(h) To Make Available School Budgets and School Improvement Plans (see 115c-288 for others)

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State Statutes-Treasurer Responsibility

• 115C-445 Daily Depositsa) Collection and Deposit of

Moniesb) Supervise and Monitor Teacher

Collections• 115C-448-Special funds of

Individual Schoolsa) Record keepingb) Monthly reporting

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Daily Deposits by the School Treasurer

– Master receipts are written daily for all money collected.

– Establish a cut-off time for making deposits.

– Make daily and timely deposits.– For funds collected after the daily

deposit, any funds $25 or greater must be taken to the bank.

– On the last day of the month, any amount of funds on hands must be deposited.

– Post deposits daily to the appropriate accounts.

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Accounting Updates

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Update #1 – AuditDocuments that need to be saved

and made available for Auditors:• Smart Find Express report signed

by principal• Leave Request forms for both

exempt and non-exempt employees • Exception reports for all departures

from scheduled time per policy (currently set by the principal in writing)

• Non-compliance will result in an audit exception

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Update #2 – Banking Procedures

– No changes should take place at the bank without a letter of approval from the CFO

– Bank Change notifications should be sent to Accounting (via email to CMS Cash Accountant)

– Please provide full names and bank branch address • make sure account type is

Collateralized Public Funds

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Update #2 – Banking Procedures

• Both the principal and treasurer should be present at bank to make changes

• There should be 3 signatures on each signature card (Principal, Treasurer, CFO)

• Be sure to complete and submit the Change in Banking Form when changes are made to the signature card

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Update #2 – Banking Procedures

• In the absence of either a principal or treasurer, the only other authorized signer is the CFO

• Checks written should be sent to Accounting for review (please include all supporting documentation)

• Once signed the checks will be returned to the school

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Update #3 – Sports Participation Fees

• Schools will once again be collecting Sports Participation Fees.

• Payments can be made online or at school

• Only accept checks or money orders

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Update #3 – Sports Participation Fee

Reminders• Middle School fees =

$50/student per sport• High School fees = $100/student

per sport• Total collected each month is

due to Finance by the 10th of each month

• Send to CMS Cash Accountant

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Update #3 – Sports Participation Fees

• Template for Sports Participation Fees– Athletic Payments for Sports

• Spreadsheet located on the Accounting website

• Maintained for Athletic Department and Auditors

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Update #4 – Sales Tax• Please be advised that the sales

tax rate changed effective July 1, 2011• The new rate is now 7.25%• The breakdown is listed below: 4.75% State 2.00% County .50% Mecklenburg County

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Update #4 – Sales Tax• Change the excel sales tax

calculator spreadsheet to 7.25%

Important Reminder:• Sales tax is due by the 10th of the

month for the liabilities of previous month.

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Update #5– Fund-Raising Reminders

• The Fund-Raising Report should include

all activities where money is collected at

the school for a good or service.• Examples: Pictures, Yearbooks,

Magazines, Agendas, PE Uniforms,

Staff Concessions, Drama Productions

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Update #5– Fund-Raising Reminders

• A Fund-Raising Report addendum

should be completed and approved by the Zone Superintendent for any new events

planned after the initial Fund-Raising Report.

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Update #6– Retirement Rate

• The retirement rate is now 13.12% on payments to CMS employees for the 2011-2012 school year.

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Update #7– FLSA Testing

• FLSA testing will be conducted differently due to the implementation of Kronos

• Keep Requests for Absence and Exception Reports for errors on file

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Update #8– Leave Coupons

• Comp time cannot be awarded to employees, it must be earned

• Comp time is maintained in Kronos and employees should not be tracking on prior comp time sheet.

• No more than 45 hours comp time

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Reminders• School Banking Information

Forms due by September 1 of the current year

• Month End Reports are due by the 10th of each month unless the 10th falls on a weekend or holiday (then due on the following Monday)

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Accounting Training Opportunities

Make the most of our training classes – you are never to old to learn!

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Accounting Training Opportunities

• New Treasurer Training (Late July/Early August)

• Bi-Annual New Treasurer Training (October and February)

• School Funds Training (Summer; October and February; One-on-one by request)

• Year End 101 (Mid June)

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CMS Pool Investment Account

CMS Pool Investment Account – Making the most of your school

money and fulfilling your fiduciary responsibility

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CMS Pool Investment

• Pooled savings account for CMS schools

• Currently earns 2.9% interest – compared to bank savings accounts earning from 0.5% - 1.0%

• Schools should invest at least 90% of idle cash

• Pool Calculator located on Accounting webpage

• Best Deal Around!

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Resources• Log on to the CMS intranet:

For questions related to accounting processes and procedures go to the link for Departments. Once you click on this link go to the Accounting Department. Under this link you will find the following information:

– Accounting Manual– School Funds Updates and Manual– Various Documents and Forms– Newsletters/Memos

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Resources(Cont’d)

• Recent updates to Accounting Website include:– Revised Banking Information

Forms– Updated Payroll Reimbursement

Forms– New Athletic Payments Record

Be sure to check them out!

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FOR ALL YOU DO!

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Questions?