001Okay. So, old business. We need a motion that the Board of Education approves the proposed revisions to policies 1411, 1416, and 1470 as presented, thereby adopting the revised policies as part of chapter 1000. Motion. Second. >> Second. All right. All those in favor? Aye. >> Aye. Any opposed? All right. Motion carries. Just refreshing to see new business. Okay. What's that? You can move forward with the audit discussion. Oh, okay. All right. New business. We have the fiscal year 2025 annual independent audit. There was supposed to be someone here from the audit firm, but they are not. Um and we've reached out to them and haven't heard anything, so I don't know if they got the location wrong or what happened there, but um they would give a brief report on the audit. Um we do
002need this approved tonight. Um Is there any questions that I could answer for you regarding this? Um Yeah, can you just go over what specifically the audit company is reviewing? So, what they are reviewing is they are uh um They are looking at our processes and make sure that we are um following board policy as to paying bills, that we have the actual appropriate documentation that goes with bills that are paid and with salaries. Um so, they will pull certain things and and really what they're trying to come up with in in the the financial statements that we present, do those financial statements are are they representative of what what is actually happening in the district? So, they are not um they are testing certain things. They will pull random uh request random information on
003show us this bill and show us the documentation that goes with it. And so, then they will they will do that at several different points. And we will pull that documentation and then provide that to them and so, then they will test that and see are we following the processes and procedures that are in place? Same way with salaries. They will test um certain salaries for people. Is there a contract? Are we paying what is actually contracted or what the actual amount is? Um So, that's one of the things they're doing and then they're just reviewing the other processes financial statements to make sure that uh everything that we are reporting in our financial statements are uh actually representative and we have the documentation that our bank reconciliations are done, that everything is um complete
004in there and that it it balances out. The the calculations that we've made match what what they they make. So, um it's it's really a test of of our systems to make sure that we are doing things the right way and following the procedures and board policies on uh accounting procedures. And then I see in the report that it showed that we had overspent the budget and that it was a violation of um and I forget which one it was. Um Arizmo. So, what happens at that point? So, that's really just a a booking error on our end. Um That is from the bond defeasance that was approved by the board. Um With the changeover in staff, that actual transaction happened. It just wasn't booked in our financial software um appropriately. And so, then we
005actually went over budget. At the end of June, we have a meeting and make final budget adjustments. Since we didn't have that booked, we didn't catch and see that we were over the budgeted amount in that in fund three. And so, then um that's how that happened and then uh what that means There's there's no penalty. There's no It's just a here's a a situation that you need to be aware of and correct it in the future. We had a similar um situation in there. The prior year was for a different uh different issue with mileage on buses and so, then we put procedures in place to uh check that and verify by that. Yeah, and that one, I mean, it looks like the difference is like 180,000 or less than half a percent, correct?
006The difference? Yeah, yeah, yeah. And so, again, that the actual bond defeasance was approved by the board, and when we do that, you know, we're it until that actually closes, we don't know exactly what that amount is. Um and so, we do a budget adjustment based on that. So, um again, that's how That's what happened on that situation. I do have questions, well, a question for the auditor. Um is there is it possible to bring him here in January to have a discussion because the questions that I want to ask him, I also want to have a board discussion after I hear his response. Sure. Yeah, we can ask. Yeah, I I I would assume they would be able to be here. We just the audit has to be approved. We have to have it
007submitted to DESE by December 31st. I just want to make sure that we can still have a discussion. >> Yeah, yeah, yeah, definitely. Tim, even with the discrepancy or the you know, the the minor issues that they saw, they still gave us a clean report, correct? Yeah, that was really a management issue, um and and looks at, you know, just our the the financial statements are representative of what they they are. The numbers that we're presenting are accurate, and it's just on the management side of that because uh you know, with with a public entity, your budget amount really controls what you have the authority to spend. And so, that's why you have to have that that budgeted amount at least at your actual. And that's why we have the meeting at the end of
008June to to make those budget adjustments. If that had been in our financial software, we would have seen that that amount was over. It just wasn't wasn't booked uh even though the transaction had been done. So, this year, what we did to correct that, when we did the bond defeasance in November, instead of waiting till the spring to do it like they uh wanted to do it last year, we did it right away. So, it's already been booked. You'll see it in our uh financial statements that you'll see that amount that's already been paid out of our fund three. So, I mean, since they're out here, this is something we would have even if we disagreed with Jen, we we still have to approve that we saw it, correct? Yes. And they could come back
009in January, and we can ask whatever questions. Yeah, yeah, yeah. Anybody else have any questions or discussion? So, what's the language of the motion? Is it we're approving the audit or we're approving a receipt of the audit? >> need to approve the audit. I mean, you can still ask the auditor any question that you want. It's not going to change their opinion. What they've No, no, what I'm asking is are we is it is the statute that we have to approve receipt that we've received the audit? You have to approve the audit. Okay. To approve that we agree with their findings. Is that what you're saying? It has to be an approved audit. That's I mean, I don't know that you have to say that you agree with it in the motion. You just have
010to have approved the audit. changed the language in the past to say we've rece- we we approve receipt of X, Y, and Z. The audit is different than some other >> approving the audit. things. What's that? We're we're we're we're approving that we've received the audit. Right? I'd have to look at the what the actual statute says, but um the language on the board memo is the same as it was last year. So, the board memo language is a motion to approve the fiscal year 2025 audit report as presented. Do we have that motion? Motion. Second. Any other discussion? Did you Uh can we roll call please, Johnny? Director Way. Okay, sorry. Oh. She is here. I am. Okay, this is Jen. Sorry, I was stuck in traffic trying to get here. I apologize. I
011was stuck in traffic trying to get here from the city. So, any questions that you guys have, I mean, overall the audit, we have four clean audit opinions. We had no issues with internal controls. We had no issues with the audit as a whole. We know issues with the single audit. So. Um. So, pertaining to the management comment letter. >> Mhm. Uh, it states in the paragraph one that this audit was not done for the purposes of expressing an opinion on the effectiveness of the district's internal control, and that your firm does not express an opinion on the effectiveness of the district's internal control. Correct. >> It further states in the third paragraph that given the limitations of the audit, you were unable to identify deficiencies in internal control that may be considered material weaknesses.
012Correct. We did identify nothing that of the testing that we did, we identified nothing that was an issue within that would be require us to report a material weakness. Or anything as a significant deficiency or anything along those lines. So, then it it ends it by saying in material witnesses may exist, but have not been identified. Correct. So, my question is, generally, what differences would there be in scope of your audit if the limitations didn't exist, and what would the time frame and cost be for? So, the biggest thing is that we can't we test what we consider to be a statistical sample of documentation for the district as a whole. So, we determine a sample based on what we believe to be an issue. And we test that issue. We test that significant or
013sorry. We test that that sample. And so, typically, it tends to be 40 to 50 invoices as a whole. And we found no issues within those 50 of across payroll distributions, employee or employee reimbursements, vouchers in general, or bank statements, or anything along those lines. We test all of those items, and we found no issues within those 40, which we consider to be a statistical sample of any kind of issues within the district. Okay, so what are the limitations that are are being expressed in the first paragraph? So, the biggest limitation is the fact that we can't test every We can't test every like transaction that the district has. It's not economically feasible to you to pay us to do that, nor is it economically feasible for us to test every item. So, that's the
014only limitation? Correct. We test a statistical sample Okay. that determines that based on the statistical sample and what issues we expect to ex we expect is a sample that we test. Okay, so for do you guys do more than just like government like school districts? Do you do private businesses as well? Okay. So, when you're doing private businesses in comparison to um like our budget, is that still like 40 invoices? So, you guys are what we consider So, you guys have a single audit, which requires you to have what we consider a yellow book audit, which means that we test your internal controls as they relate to the financial reporting. So, if you have a nonprofit that's let's say doesn't have the same requirements that you have, we won't test those items, but because you
015have a single audit and a yellow book audit, we test your internal controls to determine whether or not the what we know to be your internal controls are being followed. So, we test a a statistical sample. Typically, that's 40 invoices picked randomly across the course of the year. And we look to see whether or not the approvals are present, whether or not it looks to be a um legitimate business expense, whether or not it looks like to be booked correctly, and whether or not it has the approval of the board as a whole. Okay. So, we didn't find anything in the course of our testing across the yellow book audit and the single audit as related to special ed that anything violated your guys' internal controls of how expenditures are approved. So I guess and
016maybe I'm not asking the right questions. Um my experience with um financial audits of internal controls in companies with less um budget size and companies that are way bigger has been that there's always something found. And it's not nefarious always, you know, but it's people are human. There's accounting controls that are in are in place for a reason, but things happen. So I know we're not perfect, but I'm I'm assuming that there's my I guess what I'm getting at here is is there a way that we can make this more robust to where we're I don't know if that just means making it more than 40 invoices or if we can do other things. >> So the biggest thing we found was that the debt service fund was in excess of appropriations. And then um
017in the prior year we had found that transportation hadn't been reporting the mileage correctly as far as the DESE um collective statistics is concerned. So when we look at items, when we test the 40 invoices, you know, we try to pick random so that there's no there's no chance that the management or the CFO could determine what we're going to pick. So we pick a a random sample and determine whether or not the internal controls are being followed. We found no issues where the internal controls weren't being followed. However, we did find that the debt service fund was being spent in the excess of what was budgeted. But we also found that the transportation issues that we determined in the prior year had been resolved. So yes, we can't test every instance and we can't
018test every invoice, but in prior years we had been notified of issues that were brought to our attention by members of the board. And we did test in excess of our scope and nothing was found of those items that was determined to be outside of what the board determined to be the internal controls >> [snorts] >> of the entity as a whole. So we have tested outside of our scope of what we have as an audit, but we haven't found any issues that relate that relate to the audit as a whole that we would believe that would be an issue other than the debt service fund spent more than what was budgeted for. So if we want more robust, we just need to get involved with the audit. So when you when you go more
019robust than a yellow book or a single audit as we have, you have a forensic audit, which we aren't licensed to do. So I know there's a firm. I mean like last year when there was board members involved in the audit, that's how we would get more robust, basically. >> Correct. And when the board members last year came to us and said that there were issues, we tested far outside our scope of what we would normally test and we still found no issues. So we tested additional invoices, we tested additional approvals, we tested additional items and no items of there found to be outside of the approval of the board as a whole. Okay, so I'll ask one question just to make sure. So DESE has audit requirements. It's it's part of what they give
020us. The scope of the audit, does it comply with everything that's in the DESE guidance here? Plus all and it's law. There's Rizmo's on it, too. Correct. Everything we've done it to you falls within DESE's requirements. >> So every school district's supposed to be doing the Rizmo DESE requirements like we are. Correct. The the exact same ones regardless of who the accounting company is or anything like that. Correct. Okay. I was I was just suggesting maybe above and beyond that. Was that that's what I was talking about. >> No, and we audit about 30 school districts in the state of Missouri and we all have the same stipulations and the same requirements across the whole and we always comply to DESE standards. And I would say the letter probably indicates that we haven't been perfect
021in any way, shape or form with it. Like two years, two letters, two different things. They're corrected. So that's really what we're looking for is if you find something, we need to know what's found so we can correct it so it doesn't happen again. Um above and beyond, I don't know what the cost would be when you get into that stuff. That's something the board would have to weigh if they want to extend the additional money that's above and beyond what the state of Missouri's requirements are. By law and by DESE. And anytime that we find something that may be an issue that we believe should be brought to the board's attention, we bring it to your attention. That's how we brought attention to the excess expenditures of the debt service fund, and we also
022pointed out that last year there was a transportation reporting issue that has been resolved this year. So of what we test, we bring it to your attention as soon as we find there is an issue. But because of financial limitations, we can't test every transaction. And so we test a statistical sample. Uh I have a question. You had mentioned that board members had come to you with questions. Could you elaborate on that? Cuz >> So in the prior year, we had a couple of board members that came to us and said that they had suspected that certain transactions weren't being heard by the board. So we tested This was prior year, not this year. So in the prior year, we pulled those samples of items, and we found no instances where the board had not
023approved the expenditures. So there were no instances of any kind of wrongdoing or uh financial Everything had been approved by the board as per the district's financial uh responsibilities and the financial policies. So like in the you had mentioned in that instance you like went above and beyond the scope. Did that increase the cost of the audit last year? >> We did not increase the cost of your audit. We did it out of a um abundance of caution on our part to test additional items. We did not increase your audit cost, nor did we increase the the overall scope, and we did not penalize the district for what the additional testing that was brought to our attention. Thank you. Your audit firm does encourage board members to come forward and express any concerns, correct? >>
024Absolutely. We email out a form that is standardized that's asked you if there's any instances of fraud, any instances of basically pretty much any item that you guys would believe that would be of any attention that we should know about, and to either contact us or let us know. And I know last year, there were a couple of board members that came forward and actually sat with my firm for about 2 hours going over concerns, and we made sure to adjust our testing accordingly. I have one more question. Um so I work in a field where all I talk about is statistical significance, so I'm pretty familiar with the process. Um are your the number of invoices vary based upon size of budget? Or are you just That's just kind of what you found as
025a So So we use the AICPA's um standardized statistical sample. So depending on the population as a whole, if the population is 200 or more, we test 40. If it's under 200 but less more than 100, we test 35. If it's under 100, we test 30% up to 50% of the total population. So it's a a population statistic, and we do our best to make sure that at no point in time can the management of the district, not you guys, but the management of the district be able to do predict who we're going to pick. And just for clarification in the audit, this is answering your question about approval or the way it's worded in here, it says, "Copies of board minutes documenting approval of the audit and if applicable, management letters issued by the
026auditor must be also submitted to the department. Documents must be submitted by um may be submitted after December 31st, but must include all required signatures. Audits, board members, and management letters must be submitted electronically via tiered monitoring systems and web apps. However, it's important to note if you if we submit after December 31st, the department withholds payment until audit is received." It It says approval. It doesn't I don't know. It doesn't define. Uh And so what that means is we have to have the audit submitted, approved, and then we sub by December 31st, and then we'll submit the actual minutes showing that approval with signatures after the minutes are approved next month. Any other questions? All right. Thank you. No problem. Okay, so we had a motion and a second to approve the fiscal year
0272025 audit report as presented. Uh, could we get a roll call, please? Director Way. I. Director Lewis. Ho, ho, ho. Or I mean, I. What do you think? President Scott. >> [laughter] >> I. Vice President Walsh. I. Director Hankey. I. Secretary Rosenthal. I. Director Olson. I. Motion carries. All right, next we have new business 12.2. We need a motion to approve the master contract agreement with Hohner Architects LLC as presented. Motion. Discussion? All right. Uh, we can get a roll call, please. Director Way. Director Lewis. I. President Scott. I. Vice President Walsh. I. Director Hankey. Nay. Secretary Rosenthal. I. Director Olson. Nay. Motion carries. Okay. Next is board action items. Anything to add or discuss there? All right, board member comments? Merry Christmas, happy Hanukkah, happy New Year, all of the holidays. Anybody? Go ahead.
028>> have one thing and it's I guess it's a question to both Brian and maybe to Tim. Um, we talked during the back and forth of the setting up for this meeting about contracts and we made some changes to the contract language. I guess I'm I'm curious cuz this has happened both this year and in previous years on contracts where the language that was presented to the board has what I consider significant issues that that don't appear to be looked at in detail. Who's responsible for looking at the 40-50 pages of a contract and weeding through the things? Is that executive team or is it somebody else assigned them? Ultimately, it all it's my responsibility. Whether it's assigned to somebody or not, it's my responsibility. So when that error happens, it you need to look
029directly here. And so we'll continue to look at our processes and figure out why it happened. Um, but that's that's on me. You're correct. It was definitely an error that I'm glad you caught. It could have led to an issue. Yeah. Um, but we'll do a better job. That that's on me. I appreciate that standing up for that, Brian, and I wasn't trying to call out anybody. It's just I know. I'm concerned about that. >> It's I I truly believe that it's ultimately on me. If a mistake's made, that's your job as a leader. So we'll figure out how to correct it and and make sure it doesn't continue to happen. Okay, thanks. One other item. When we were looking at things for approval, there was a reference with uh the hotel for a event
030in April. And the point that I made was was on per diem rates, but the response back was that this wasn't something that the school district pays for anyway. Maybe it wasn't that word. >> Yeah, so ultimately, it's an activities account that is done through a a booster club type thing and they do it that way. Uh, we can't tell them they have to request that. I will say like we do request that per diem, but they're not required to give it to us. All we can do is request it. Which is that's the hard part. Like you I I googled it and looked and and really dug into some law stuff. And unfortunately, there's no requirement for the these hotels to give us that per diem. All we can do is ask and see
031if they're willing to do it. Um, and so in that case, we're still looking for the the I would say the best environment at the cheapest cost we can find. I wish there was a law that said, yes, school districts have to be given the government per diem rate. Right. And I I hear what you're saying on that. I guess where I thinking think about this as well is that we chose or the the hotel that of record was chosen because they had the best rates based upon a bid. Well, not they don't have to do a bid process in that situation. The The end of hit the the group like that it's a not a school affiliated organization. The only reason we're approving it and Tim jump in if I messed up here. Um
032the only reason we're approving that is it's still school district students and we're still taking them on an out of district trip. And it's really because the hotels require us to sign a contract. If it was just a purchase order, they didn't require a contract, then it wouldn't come to the board for approval. You know, if it's a purchase order that's less than $3,000, that's approved administratively, but hotels and like the Cardinals, they require a contract. So, our policy and procedure requires any contract, no matter the dollar amount, to come to the board for approval. And so, that's why you see all of those on the board consent agenda because the board approves all of those contracts. We do a lot of other purchases for that amount of money that is just done through a
033purchase order that doesn't necessarily have board approval before it happens. It just has administrative approval because we have budget approval, it's within the budget, and we follow our purchasing procedures established by the board to authorize those administratively. Whether it's the school district's money or the fundraisers money, I guess or do we share with them options such as per diem? I mean, to me anybody that's going out to look for hotel rooms associated to school should be saying do you accept per diem rates, government per diem rates? That should be the first question and find one that does. Why spend $170 a night when you spend $110 a night? I mean, it's all money that goes to the kids. Yeah, we definitely encourage that. Can I guarantee that every person that has ever done that follows
034those procedures? No, I I can't guarantee that. But But and it you know, the the per diem rate is more on a reimbursement. The the state price is more of what we're we're talking about here, the state government pricing for hotel rooms, which is which is a little different than the per diem rate um cuz the per diem rate is more of from the federal government, GSA and and the state contracted price is a is a little different than the per diem rate. So, you're telling me that we get we get federal funds, but we can't use federal benefits? No, I'm saying um the state has contracted rates that that they do with a lot of hotels. That's sometimes they will pass those on to school districts. The GSA is a reimbursement amount for employees.
035Per diem rate is the way I understand that. Not the amount that the federal government pays hotels. It's as an employee of the federal government, this is the amount that you get to go to this place. Well, I would I would argue against that. I mean, I I worked as an individual contractor. We used GSA rates all the time. You just call up the hotel. You say, "Hey, I'm I'm I need GSA rate for three nights." And you give them the nights, they approve it, and and that's what you get billed. Did you have a contractor license? I mean, how did they know? Because we told them. That's all it takes. I just I I I I hope that they get shared with the various organizations that are generating money for the kids. That That's
036my whole point, really. >> Yeah. Okay, thanks. That's it. Any other board member comments? I would just say everybody have a great break, and teachers especially, unplug, rest, nap, sleep, forget about school for a couple weeks. All right, we need a motion to adjourn open session. Motion to adjourn. Second. All those in favor? I. I. Oh, roll call. >> We need a roll call. All right, roll call. Director Way? I. Director Lewis? I. President Scott? I. Vice President Welsh? I. Director Henke? I. Secretary Beasenthal? I. Director Olson? Motion carries.