Audit Presentations, Other Financial Topics Front-And-Center at School Board Meeting

BRADENTON – Auditing and finances were among the front-and-center topics at Tuesday’s school board meeting, with presentations by the school board’s Audit Committee and Internal Auditor, as well as approval to authorize refunding of Certificates of Participation for 2016, all taking place.

One of the approved resolutions related to the CoP authorizes that $45 million of the district’s 2009 outstanding Certificates of Participation be refunded by the federal government. It was advised that the refunds would create about 7.59 percent in savings (about $3 million) of the refunded bonds. The board also approved authorizing a loan of $28 million, which the board plans to pay back with revenues from property taxes. Jay Glover, Financial Advisor for Public Financial Management, told the board that as a result of the multi-million dollar financial problems announced in 2012, the district’s credit rating was downgraded, but that as of Tuesday, Fitch had upgraded its credit rating, which is now at an "A-" level.

Audit Committee Chair Joe Blitzko gave an overview of a number of topics. Blitzko said, "I never see anything with capital projects; this needs to be an emphasis that needs to be placed with this board." Blitzko also advised that action plans for post-audit reviews need to be implemented to help ensure timely follow-ups by internal audit reports. "We need to get back on track with those ... so that we’re not relying on the external auditors or the A.G. (Auditor General) to come in and say, 'Are we doing the right thing?'"

During one presentation by the district’s Internal Auditor, Shinn & Co. went over a recent audit of the current progress made on implementing the district’s new ERP system and the costs associated with it.

The total estimated cost so far as of July 28 for implementing the project is $2,004,193.90; the actual cost so far is $1,438,233.13 – a difference of $565,960.77. Those numbers were given with a footnote that the expenses for June had not yet been invoiced, and that not all invoices received have been reviewed and paid yet.

Shinn Co.’s report identified a number of risk areas to be aware of as implementation progresses, including:

• Data cleansing progression–the project’s data cleansing currently underway is at risk for not being completed by the end of the four month timeline given by the district. Data cleansing is the process of amending or removing data in a database that is incorrect, incomplete, improperly formatted, or duplicated.

• Additional project costs having not been budgeted–those costs, "including but not limited to End User Training costs" for training employees in the use of the new ERP software, are at a "high likelihood" of including costs "beyond the software purchase and Ciber's (the company behind the software) time and labor costs."

• Cultural resistance to change associated with use of the new software–the likelihood that district personnel "will not embrace and adopt the cultural change" was rated at "medium."

• The needed creation or updating of policies and procedures for using the new software was rated as having a high likelihood of delaying the project.