Working closely with the Kalama School District Business Manager, the Office of the Washington State Auditor has wrapped up its work on the district’s most recent financial audit. The auditor’s team found no issues in its Federal Single Audit Report, but did find deficiencies in its Report on Financial Statements, which covered the period between September 1, 2021 and August 31, 2022.
According to the report, there were “no instances of noncompliance that were material to the financial statements of the district” (in other words, nothing that would significantly impact the integrity of the district’s finances). However, the auditor’s team did identify a number of items to correct in order to ensure accurate and transparent financial statement reporting moving forward:
- Expenditure misclassification (for example, capital project funds were classified as “unassigned” instead of “restricted”)
- Compliance with new state requirements related to lease accounting (partially implemented)
- Reconciliation of records with the Cowlitz County Treasurer, as identified in a March 2023 audit (process in place, but not fully-implemented until the current fiscal year)
- Misc. journal entry errors (related to tax receivables and state transportation funds)
The district is resolving the above items by adopting additional tools, training and processes to ensure all areas are accurately covered. At the same time, Jennifer Steward, KSD Business Manager, will continue to work closely with the Auditor’s Office to restore the district's consistent track record of receiving clean audits from the state.
"I appreciate the state auditor’s team and their expertise in reviewing district finances,” said Steward. “Each audit serves as a valuable opportunity to learn and strengthen our practices, ensuring strict compliance with all relevant local, state, and federal financial regulations."
The state auditor conducts an audit of school districts at least once every three years, with a goal of increasing trust and transparency. Kalama School District’s latest audit was initiated due to the receipt of additional federal dollars during the pandemic.
“State and federal regulations require very specific documentation on so many aspects of our operation. That is why, as a district, we have elected to undergo more frequent audits – at least one every two years,” said Kalama School District Superintendent Eric Nerison. “Staying abreast of regulatory changes requires a total team effort, and with recent staff turnover in business management, being able to rely on the Auditor’s Office for guidance has been a huge positive.”
The district anticipates its next financial audit will take place during the spring of 2024.