PIONEER CENTRAL SCHOOL DISTRICT AUDIT COMMITTEE REQUIREMENTS Sara - - PowerPoint PPT Presentation

Sara M. Dayton, CPA Seth D. Hennard, CPA

PIONEER CENTRAL SCHOOL DISTRICT

AUDIT COMMITTEE REQUIREMENTS

AUDIT OVERVIEW

1

RESPONSIBILITIES AND DELIVERABLES

• Our responsibilities detailed in our engagement letter are under:
• Generally Accepted Auditing Standards
• Government Auditing Standards
• Uniform Guidance
• Purpose is to express opinions on your financial statements
• Includes each major fund of the District, fiduciary funds, and the District as a whole
• Required Supplementary Information (RSI) and Supplementary

Information (SI)

• RSI is not audited, however, we apply limited procedures to
• Management’s Discussion and Analysis (MD&A)
• Pensions and OPEB schedules
• SI includes budget and 4% calculation, capital projects, and single audit schedules
• We will also provide recommendations for process improvements and

internal controls in a written letter to management

AUDIT SCHEDULE

2

SERVICES TIMING

Preliminary Audit Committee meeting Virtual Final field work Begins July 29 Drafts available Late August Audit Committee meeting – draft review To be determined

AUDIT PLAN

3

AUDIT APPROACH

• Risk-based; entity wide focus
• Update understanding of operations and organizational objectives
• Update understanding of the processes in place to address identified

risks

• Assess audit and fraud risk
• Design appropriate audit procedures to address assessed risk
• Continuous communication with management

AUDIT PLAN

4

MAJOR AREAS

• State aid, property and sales tax revenue, and related

receivables/unearned revenues

• Property and equipment, capital projects, related payables, and
• utstanding debt
• Payroll
• Compensated absences, pensions, and OPEB
• Commitments and contingencies
• Uniform Guidance
• Extraclassroom activities

AUDIT PLAN

5

MATERIALITY

• Metrics-based formula - the higher of assets or revenues:

Government-wide assets & deferred outflows of resources $96,462,000

Planning materiality of $1,929,000 Tolerable misstatement of $1,447,000

Same approach is used for each major fund

NEW ACCOUNTING STANDARDS

6

GASB 84, Fiduciary Activities

• Establishes criteria for identifying and reporting fiduciary activities
• Will impact payroll withholdings, scholarship activity, and extraclassroom activities
• Effective for the fiscal year ending June 30, 2020

GASB 87, Leases

• Leases are essentially capitalized on the government-wide statement of net position

as a lease asset and lease liability

• Not applicable for leases with less than a 12 month duration
• Effective for the fiscal year ending June 30, 2021

GASB 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements

• Requires greater disclosure within the footnotes including unused lines of credit,

assets pledged as collateral, terms relating to events of default, significant termination events, and subjective acceleration clauses

• Effective for the fiscal year ending June 30, 2019

NEW ACCOUNTING STANDARDS

(con’t)

7

GASB 89, Accounting for Interest Cost Incurred before the End of a Construction Period

• Clarifies the accounting for interest costs on the government-wide and fund

statements as an expense

• Effective for the fiscal year ending June 30, 2021

NEW YORK STATE UPDATE

• TRS Sub-Fund of the Retirement Contribution Reserve Fund

– Maximum contribution of 2% of teachers’ salaries each year – Cannot exceed 10% of total prior year compensation of all District TRS members

REQUIRED COMMUNICATIONS

COMMUNICATION UPON COMPLETION OF THE AUDIT

• Management and auditor responsibility
• Independence
• Estimates
• Consistent application of accounting principles
• Uncorrected misstatements/adjustments
• Difficulties encountered during audit
• Significant internal control weaknesses
• Other significant relevant matters

8

QUESTIONS

CONTACTS

• Sara M. Dayton, Partner, 716.270.4927, sdayton@lumsdencpa.com
• Seth D. Hennard, Principal, 716.270.4949, shennard@lumsdencpa.com

9