Barnwell 45 school district gets clean audit, but finds there is no free lunch

"There is no free lunch."

That old adage came back to the Barnwell 45 school district as independent auditors gave a review of its findings to the Barnwell 45 school board during its Feb. 26 meeting.

The Greenwood-based auditing firm of Elliott Davis gave the district a clean, unqualified opinion for its fiscal year that ended June 3, 2008, meaning that the auditors did not find any deliberate or intentional misrepresentation of the district's financial records.

In fact, the district's general or operating fund increased by $536,000, although this was not new money that the district sourced, said auditor Mickey Young with Elliott Davis.

However, the auditors discovered several findings which the district should pay attention to, he said.

One point the auditors noted was that the district's food service program ran $148,000 into the red.

District Superintendent Roy Sapough said this was a case of deficit spending and that the program would be reviewed to correct the problem, he said.

"I knew there had been some concerns there," he said.

One factor that caused the deficit spending is that documentation for the district's free and reduced lunch program had not been submitted on time to get reimbursements from the federal government, Sapough said.

"It's a federal form and it's a rather complex form," he said.

Another error in the food system program caused the district to miss claiming $8,000 for it, although the error was unintentional, Sapough said.

"There's no money missing or wrongdoing going on, it's just some things could be done better," he said.

The district will also look at the fee scale for that lunch program to see if it is comparable to others of its size, he said.

"I know we are charging less than a lot of other systems. We will compare our system and other neighboring and similar systems and see what they are charging," he said.

The district will also check to make sure ineligible children are not inadvertently receiving free lunches too, Sapough said.

"It's got to be a fiscally sound program," he said.

Shirley Kitchings, the district financial officer, will also be looking into the food service finances, she said.

"Our meal costs are low and I don't know if the school board is willing to raise the school lunch costs. I know our school lunch costs are lower than Blackville and Williston-Elko. We are going to look at school food services and see what the problems are and how we can help them," she said. "I think a lot of school districts are struggling with this."

The other concern the auditors voiced was in the area of budget to actual comparisons with the district's financial statements.

Basically the district had no clear snapshot of what its budgets were for major fund accounts throughout the fiscal year.

Because of this, it was unclear as to what its expenditures were on certain accounts compared to the balance remaining in these accounts.

According to a copy of the audit obtained by The People-Sentinel, the audit report noted: "During our audit, we noted the school district performs no comparisons of budgeted revenues and expenditures to actual performance for any of the major funds throughout the year. As a result, the school district does not have a formal process in place to identify, evaluate and control revenues and expenditures for any of the major funds or specific programs."

Sapough said the district is working to remedy this situation.

"How do you know how to go on your expenditures if you don't know what your line items are?" Sapough said.

Kitchings said that correcting the condition of the budget to actual comparisons is the "most important thing" she will be facing.

"That's the most important thing - getting working budgets, line item budgets," she said. "You have to have controls so that you know what you have to live with."

"We had a budget this year but it's not comprehensive and it didn't cover the whole year," she said.

"We are going to be looking at how we do things. We've got to work smarter and coming up with some written procedures on how we do things. We need to use technology more instead of doing things by hand," Kitchings said.

After the auditors gave their report, Kitchings in other financial matters warned the school board that the state Department of Education would likely enact another revenue cutback for state education. The cutback would probably equate to a 3 or 4 percent reduction or about $450,000, she said.

"The economy is declining still and a lot of our funding is dependent on the sales tax," Kitchings said.