Jose de Wit
SUN Staff Writer
Published 10/30/08
A recently released audit gave the Española School District a relatively clean bill of health for the 2006 fiscal year school on all but one count: the District is woefully behind on its financial reporting.
The State Auditor’s office rated the District’s 2006 audit, which was released this summer, as “unqualified,” the highest possible rating. That opinion was marred by the fact that the audit was submitted in October 2007, nearly a year after it was due.
The 2006 fiscal year began July 1, 2005, and ended June 30, 2006. Every government agency in New Mexico is required to perform an audit at the end of each fiscal year, and school districts statewide must submit their audits to the State Auditor’s office by Nov. 15, about three months after the end of each fiscal year.
The District’s 2007 fiscal year audit is even longer overdue. The District’s 2008 audit is due in two weeks, but the District is nowhere close to turning in the previous year’s audit.
The District started making payments in July of this year on a $40,000 contract with accountant Chester Mattocks to conduct its 2007 audit, according to payment vouchers. But according to Los Cariños Charter School business manager Alex Salazar, the auditor has not yet begun to inspect that school’s finances, which were a major reason the 2006 audit was turned in late.
Cockerham said the District must also conduct an inventory of all its equipment to complete the 2007 audit, which he plans to hire an outside contractor to do.
The delay leaves the District out of compliance with state rules and regulations and jeopardizes state and federal funding because “legislators, creditors, bondholders and state and federal grantors do not have timely audit reports and financial statements available,” the audit states.
Auditing firm Norbitt, Hagood and Company blamed itself, the District and Los Cariños for the delay of the 2006 audit.
“A switch in (District) fixed asset software, a new charter school, which did not maintain general ledger accounting, and the auditor’s loss of key staff and major illness caused an even greater delay,” the audit reads.
As a charter school, Los Cariños operates semi-autonomously from the District. The charter school handles its own finances, but receives its state and federal funding through the District. For auditing purposes, Los Cariños and the District’s other charter school, the Española Military Academy, are considered part of the District.
The audit goes on to explain how the bulk of the delay was because general accounting, and even “the overall filing and administration of the school,” at Los Cariños were “dysfunctional.”
“(Los Cariños) was not completely structured or ready for operations. The accountant needed training and support to operate accounting software,” the audit states. “It was necessary for the auditor to audit bank accounts and other supporting documentation in lieu of adequate accounting records.”
As a result, the audit recommends the District should “seriously consider” taking over Los Cariños’ finances.
The audit also slapped the District on the wrist for missing federal deadlines for submitting data and overspending in several budget categories.
The District failed to turn in required data and reports to federal agencies within a deadline nine months after the close of the 2006 fiscal year, something that could “cause impairment in future funding.” The audit does not indicate when the District turned in those reports.
Spending exceeded budgeted amounts by a total of $415,300 in 10 budget line items, three of them related to administrative budgets at the charter schools. Most of them stemmed from previous years’ errors that were not corrected at the start of the 2006 fiscal year, according to the audit. Auditors said although the errors could have led the District to overspend its overall resources, that did not happen. The District kept its major funds and overall budget balanced.