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East making progress on audits

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But challenges remain as district tries to catch up

By Mercy Lopez

Two-and-a-half years ago, as the Las Vegas City Schools District was grappling with scandal over the sexual relationship between former Robertson High School teacher Jay Quintana and a student, the district was also dealing with cash management issues.

During the fiscal year that ended June 30, 2010, the district didn’t have enough cash in its general fund to cover program overages. As a result, it ended up borrowing nearly $1.7 million from its Bond Building Fund to cover the shortfall.  

Rick Romero was the superintendent at the time, although auditors say the cash management issues were due to turnover in the business manager position and to the cash balance in the general fund not being monitored closely.

That is among the new information to emerge in the latest audit of the district’s finances, which was made public last month. The audit covers the fiscal year that ended June 30, 2010.

While that audit shows that challenges remain for the district, it also reveals that the district has made notable progress in getting its financial house in order. It shows that five of the prior year audit findings were cleared. And the district received a qualified opinion on its financial statement, a significant improvement from the disclaimer opinion it received in the 2009 audit.

“The important thing, I think, is that the auditor found that we’ve made significant improvements in our cash management,” said school board President Felix Alderete. He said the money that was borrowed from the bond fund during the 2010 fiscal year was paid back.

While the district had hoped to catch up on its late audits by next month, that won’t be the case. The school board is meeting behind closed doors with its auditors on Friday to discuss the launch of the audit for the fiscal year that ended June 30, 2011. That audit is almost a year late. The audit for the fiscal year that ended on June 30 of this year is due on Nov. 15, but the 2011 audit must be completed before the 2012 audit can begin.

Alderete said district staff has already provided auditors with the reports they need for the 2011 audit. He said one of the primary reasons for the delay in the 2011 audit is the auditing firm’s schedule.

The 2010 audit was conducted by Albuquerque-based Griego Professional Services, LLC. The district received an unqualified opinion on the audit of its compliance with major programs, meaning that while some problems were found, none of them were major.

Many of the findings in the 2009-10 audit were repeated from prior years, and the district in its response to many of the findings says they are likely to reappear in the 2010-11 audit because the district has been so behind on its audit reports that there was effectively no time to fix the problems.

Among the findings in the 2009-10 audit report:

• There is a possible unknown cash shortage in the food service fund.

• The reconciliation of the bank statements to the general ledger was off by $27,231.

• The district was not following state law in its handling of bids. Specifically, it couldn’t prove that it published requests for bids in a newspaper as required.

• The district didn’t pay its utility bills on time, resulting in late fees.

“I have all the confidence, and I know the board does too, that we’re going to resolve these old audit issues quickly and our system is going to be very well managed in terms of cash and other activity accounts,” Alderete said. He added that the current staff is doing a good job with district finances.