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ADMINISTRATIVE LETTER  #32

POLICY CODE:  IL      

 

 

TO:                  Superintendents of Schools

                        Municipal Officials of School Administrative Units

                        Directors of Applied Technology Regions

 

FROM:            J. Duke Albanese, Commissioner

 

DATE:             June 18, 2001

 

SUBJECT:      New Audit Requirements

 

Public Law 2001, Chapter 344 was enacted by the legislature and signed by Governor King on June 1, 2001.  These revisions to the audit statutes are intended to (1) make submission of the audit report less burdensome for many school administrative units by providing more flexible reporting requirements, (2) clarify the required assurances that units have complied with applicable provisions of the School Finance Act of 1985 and 1995, and (3) require an audited reconciliation of the annual financial report (EF-M-45) prepared and certified by the auditor – a sample reconciliation has been enclosed with this letter.  The new statutes require an “Initial report to the Commissioner” due on or before December 1st and submission of the June 30th audit report within 9 months after the end of the audit period, except that audits of Federal programs shall conform to Federal requirements.

 

Enclosed with this letter is 20-A M.R.S.A. Chapter 221, Subchapter II Audits (§ 6051 and §6052) that include the revisions enacted in P.L. 2001 Chapter 344.  Please review these new requirements with your auditor.  Public Law 2001, Chapter 344 is available on the Legislature’s web page at http://141.114.121.65/legis/bills/chapters/PUBLIC344-1.asp

 

The “Initial report to the commissioner” due on or before December 1st should be sent to:

Joanne Allen, School Finance Consultant

M. I. S. Team

Department of Education

23 State House Station

Augusta, ME 04333-0023


The submission of the June 30th audit report due within 9 months after the end of the audit period should be sent to:

Susan Griffin, Supervisor of Audit

Support Services Team

Department of Education

23 State House Station

Augusta, ME 04333-0023

 

If you have questions, please feel free to contact any of the following personnel:

Susan Griffin at 624-6860 or email susan.griffin@state.me.us

Suzan Cameron at 624-6790 or email suzan.cameron@state.me.us

Joanne Allen at 624-6790 or email joanne.allen@state.me.us

 

JDA:scc

 

Attachments

 

Cc:       Auditors of School Administrative Units & Applied Technology Regions

            Susan Griffin, Supervisor of Audit

            Suzan Cameron, Supervisor of School Finance

            Joanne Allen, School Finance Consultant


 

CHAPTER 221

SCHOOL RECORDS, AUDITS AND REPORTS

SUBCHAPTER II

AUDITS

20A § 6051.     School administrative units

1.  Audit. A school board shall provide for an annual audit of the school administrative unit.  The audit shall include the following:

A.  Accountability of all revenues and expenditures;

B.  A determination of whether or not proper budgetary controls are in place;

C.  A determination of whether or not the annual financial report submitted to the department is correct;

D.  An audit of all federal programs in accordance with applicable federal law;

E.  A determination as to whether the school administrative unit has complied with applicable provisions of the School Finance Act of 1985 and the School Finance Act of 1995; and

B.      Any other information which the commissioner may require.

 

2.  Fiscal year. The fiscal year of an audit shall be from July 1st to June 30th, except that audits of federal programs shall conform to federal requirements.

 

3.  Auditors. Audits shall be conducted by either the Department of Audit or qualified certified public accountants or public accountants registered by the Board of Accountancy.

 

 4.  Initial report to the commissioner. On or before December 1st, the school board shall provide the commissioner with:

A.  Repealed   

B.      Repealed

C.      Written determination of whether or not proper budgetary controls are in place;

D.     A written determination of whether or not the annual financial report submitted to the department is correct, including submission of an audited reconciliation of the annual financial report prepared and certified by the auditor; and

E.      A written determination as to whether the school administrative unit has complied with applicable provisions of the School Finance Act of 1985 and the School Finance Act of 1995.

5.  Records. Financial records and accounts shall be kept for 7 years after the end of the fiscal year and shall be available to the auditors and any other upon request.

 

6.  Report to commissioner.  Within 9 months after the end of the audit period, the school board shall provide the commissioner with:

A.  A copy of the audit report;

B.  Accountability of all revenues and expenditures;

C.  Written assurance that the audit has been conducted in accordance with applicable state and federal laws relating to financial and compliance audits; and

D.  Any other information that the commissioner may require.

 

20A § 6052.     Federal audits

The following provisions apply to federal audits.

1. A school board of a school administrative unit which accepts federal funds shall hire auditors and pay out of available school funds or from federally allocated sums for any audit of federal programs.

2.  Report to commissioner. The auditor shall provide the commissioner with a copy of the audit.

3.  Use of audit. The commissioner may use these audits to provide the Federal Government with any information it requires.


SAMPLE RECONCILIATION

AUDIT ADJUSTMENTS TO EF-M-45

 

 

General Fund (10)

Special Revenue Funds (20)

Capital Projects Funds (30)

Totals

June 30 balance as per EF-M-45

$283,526

$8,095

$3,241,651

$3,533,272

Beginning balance variance

$0

($1)

$0

($1)

Revenue Adjustments

 

 

 

 

Local Interim Financing Appropriations

$225,000

 

 

$225,000

Investment Earnings

$1,068

$23

$268,559

$269,650

Miscellaneous

$347

 

 

$347

Title IA

 

$12,931

 

$12,931

Title II

 

($17)

 

($17)

Title IV

 

($187)

 

($187)

Title VI

 

($294)

 

($294)

Local Entitlement

 

($29)

 

($29)

School Lunch Program

 

($4,873)

 

($4,873)

Local Revenue

 

 

$129,815

$129,815

Capital Projects Fund Reimbursement

$63,940

 

($63,940)

$0

Expenditure Adjustments

 

 

 

 

Operation/Maintenance of Plant

($110)

 

 

($110)

Administrative

($41)

 

 

($41)

Insurance Reserve

($459)

 

 

($459)

School Lunch Program

 

($591)

 

($591)

Capital Projects Fund

 

 

($889,351)

($889,351)

Audited GAAP Basis Fund Balance

$573,271

$15,057

$2,686,734

$3,275,062