Audit shows funds vary

Following the presentation of the Audited Financial Statements for the Fulton Independent School District, presented at the Nov. 21 FISD Board of Education meeting, Jeff Rogers, Superintendent of Fulton Independent School District, issued a press release on the audit findings.

Rogers stated Pursuant to Kentucky Revised Statute 156.265, the Fulton Independent School District has conducted, on an annual basis, audits of the financial records of the local board of education, Carr Elementary School and Fulton High School. The district employs the firm of Shad J. Allen, CPA in Richmond, Ky., to perform the annual audit. The audit report for the 2022 – 2023 school year, as presented at the Fulton Independent Board of Education meeting Nov. 21, discovered a significant discrepancy between the budgeted beginning balance of the 2023 – 2024 budget and the actual amount of funds available, which, was believed to include a $1.5 million carryover.

Following further research and investigation, it was determined there was a difference in available funds of $1.1 million.

He said the auditors attributed the shortfall to three key findings:

1. The district’s accounting department did not have a system of internal control over financial reporting that would allow it to prevent, or detect and correct in a timely manner, a significant misstatement in its financial statements, including footnote disclosures.

2. The district was not in compliance with model procurement as required by Kentucky Revised Statute.

3. Purchase Orders were not being issued for purchases.

Rogers said In response to these findings the district, working in conjunction with the Kentucky

Department of Education, The Kentucky Association of School Administrators, and The Kentucky School Boards Association, has developed a corrective action plan that is being implemented immediately. The plan addresses the concerns identified in the audit and introduces financial best practices that will safeguard against future concerns.

The Superintendent said once the audit findings were provided, the task at hand was to dig deeper and identify the origin of the differences in budget amounts reported, as compared to amounts actually there and accessible.

He said through further research, it appeared there could be a number of areas for consideration, which included better administrative oversight, improvement in operational systems of control and re-evaluation of the District’s stipends paid, which, Rogers said could be considered excessive when compared with similar area school district’s stipends.

Recipients of stipends could be district employees who take on any extra or co-curricular role, such as a club sponsor, coach, contracted administrators of grants, or grant writers who receive stipends determined by a percentage of the grant awarded.

“Poor district spending, or, living beyond our means, as well as ESSER money not spent appropriately, has also been considered. Another factor regarding the difference in available funds is that a district wide raise of 8% was implemented for this fiscal year, part of a 12% raise, which was to have been implemented over a three year period. It was not budgeted adequately,” Rogers said.

“There is no one thing to point out, it was a combination of a number of things. The issues have been identified, and we have great plans to solve them. Our district is not in any jeopardy. The State has been working with us, and we have forwarded information to the Kentucky Department of Education, which they will review.

“We are excited about the positive growth that is happening in our community and in our school district. I am confident that the new policies and procedures that we are implementing in our finance department will safeguard against these types of concerns going forward. The remainder of this school year will be challenging financially for our district. We will have to tighten our belts and focus on being diligent in how we use district funds. Despite these findings, we are financially stable and growing as a school district. I am confident that these new policies and procedures will have a direct impact on the continued success of our students. My expectation is that every decision made by our school district reflects the best interests of our amazing students,” Rogers said.