The North Dakota State Auditor’s Office has identified seven areas of concern in a petition audit of the Williston Basin Public School District #7. The audit period was from July 1, 2021, until June 30, 2022. The issues identified include:
Bank Reconciliations not Completed for Entire Fiscal Year (page 48)
In the entire fiscal year (from July 1, 2021, through June 30, 2022) a bank reconciliation was not completed once. Monthly bank reconciliations are essential because they identify accounting or bank errors by providing explanations of the balance in the bank and the cash balance. The cash in the bank account for the District exceeded what was in the general ledger.
Large Dollar Audit Adjustments (page 49)
An audit adjustment is a change made by an external entity (in this case the State Auditor’s Office) and is a proposed correction to a general ledger. The net audit adjustment that needed to be made by the Auditor’s Office because there were no bank reconciliations was $1,677,651. More information can be found on page 3 of the audit report.
Missing Documentation for Annual Budget (page 51)
The audit team was not able to find documentation for the annual budget. It’s important to document the annual budget because taxes collected from the community may be too high or too low.
The audit team also found that the District does not have segregation of duties (page 47) in place. Segregation of duties is having more than one person complete a task to reduce the chances of fraud and error. Additionally, a fraud risk assessment (page 50) was not completed for the fiscal year 2022. Fraud risk assessments are important because they evaluate the probability and impact of fraud and identify potential areas of concern. In addition, a separate debt service fund (page 52) should have been used to comply with State Aid Certificates of Indebtedness. Lastly, an area of concern with the Single Audit (page 53) was identified with missing documentation for expenses charged to a federal grant.
Under North Dakota law, the State Auditor’s Office may be called on to audit or review a political subdivision if enough qualified voters of that entity request the audit. The Williston Basin Public School District petition request required 707 signatures, they received 988 signatures.
In February of 2023, the Auditor’s Office completed an audit of the Williston Basin Public School District #1. District #1 merged with District #8 on July 1, 2021, to create the current District #7. This new District #7 has hired all new staff in the business office, including a new business manager, and superintendent.
For the full audit report, visit: https://bit.ly/WillistonPSD7