WESTOVER — Somerset County Public Schools ended last year with $1.059 million unspent as several categories of expenses came in under budget.
The excess fund balance was primarily attributed to savings in student transportation, instructional salaries, special education, textbook and supplies — all less than budgeted due to the COVID-19 pandemic.
The excess will be available for the start of fiscal year 2023.
Nearly $63 million passed through school operations and capital accounts for the fiscal year ending June 30 with some $44 million part of the regular budget. Ron Hickman, CPA and partner with the TGM Group which conducted the FY21 audit, gave it “is a clean opinion” adding that the books fairly present the school system’s financial picture.
He said the internal control audit was also “a clean opinion.” “We handle almost $63 million between grants, school construction, and everything, so it’s very important that we have the checks and balances. That’s one of the audit tests to make sure they’re working.”
On $44 million budgeted Mr. Hickman said there was “a fairly significant” fund balance which showed there was less spent on salaries and fixed charges during year when students were entirely virtual or schools were at just 50% capacity as some returned to in-person learning.
The “surplus” at the end of FY20 was $148,000 but with the million dollars left over at the end of the last fiscal year “it will be a nice start” when drafting the FY23 budget. “Ninety-nine percent of the surplus is related to expenditure savings,” he said, “it’s nice to have that little cushion” but it represents just eight or nine days of expenses.
Food service, which is accounted for separately, showed a profit of $194,279 with costs much less than the prior year. However, Mr. Hickman said the school system used $657,880 in federal funds to offset losses related to no food being sold in cafeterias as schools closed for COVID.
Mr. Hickman said testing is done at the school level to ensure expenses are approved, checks include two signatures, etc. He recommended some “minor ways” to strengthen internal control at the schools, but schools should know random samples are being taken and if there are exceptions they’re pointed out.
While the audit does not express an opinion on the effectiveness of the current internal controls, no deficiencies were considered to be material weaknesses. “However, material weaknesses may exist that have not been identified,” the audit states.
One incident from earlier this year resulted in charges of theft against a now-former finance office employee, accused of taking cash including funds from jury duty that were to be deposited. Jeffrey L. Smith, 60, entered an Alford plea to theft between $100 and $1,500 in District Court on Dec. 9 for allegedly taking over three years nearly $3,400. He will be sentenced on Feb. 23.
An Alford plea does not admit guilt but acknowledges had the case gone to trial he would have likely been found guilty.