Auditor General: HUSD in compliance, still has deficiencies
When Cynthia Windham took over duties of financial director for the Humboldt Unified School District in August 2007, she found a plethora of problems that needed immediate attention.
So did the Arizona Office of the Auditor General.
In December 2007, the OAG notified HUSD that the district had failed its audit for fiscal year 2005-2006. The district received this news in a 90-day non-compliance letter, which means the State can withhold funds if the district does not implement the OAG's recommendations within the 90-day period.
Prior to receiving the letter, Windham already had realized the district lacked procedures and staff to comply with State regulations, and she requested the board hire an internal audit manager.
Windham told the board at its meeting Tuesday, that the Auditor General found the district in compliance.
However, the compliance letter dated Feb. 24 also stated "a number of deficiencies still exist."
Windham, Internal Audit Manager Kaye Schrenk, and Teresa Price - who worked on the student attendance deficiency - worked diligently with district office staff to reach compliance.
While many object to money not spent directly on teachers or the classroom, Windham stressed that hiring Schrenk and developing financial accountability is money well spent.
"I maintain that for a district to continue to make any strides in adding programs for students, it must first be on solid financial footing. It is essential to know where we are before we can chart a course on where we are going," she said.
"This principle is always true, but in this economic climate, it is even more critical."
Windham continues to work on the areas of deficiency as outlined by the Auditor General's recommendations. These include:
Strengthen controls over bank accounts.
Improve controls over competitive purchasing and expenditures.
Ensure accurate and complete lists for capital assets, inventory and stewardship.
Windham made changes in cash collection and reporting procedures, which require prior approval for fundraisers, deposits of all money within five days of receipt, authorization from the district office (Windham) to expend money, and centralization of oversight for all high school student activity and auxiliary accounts.
Tax credit money is a sub-category of auxiliary money, and those funds are no longer kept in local checking accounts. The district now transfers all tax credit money to the county office.
Windham is finalizing the changes at the high school and hopes to complete the middle school transition by the end of the school year.
Tracking inventory is a huge job, she said, that involves accounting for every item with a cost of $1,000 or more, the items' location, and requiring verification of 6,000 lines of data.
"We are hopeful that the time and effort expended on district compliance issues will continue to pay dividends," Windham said.