By Aberdeen Insider - May 1, 2025 in WARNER SCHOOL DISTRICT NO. 6-5
NOTICE OF AUDIT OF THE FISCAL AFFAIRS
Notice is hereby given that the records and books of account of Warner School District No. 6-5 of Brown County, South Dakota, have been audited by Eide Bailly LLP for the fiscal year ended June 30, 2024, that a detailed report thereon is filed with the governing board, the Business Manager, and the Department of Legislative Audit, 427 South Chapelle, Pierre, South Dakota, for public inspection.
The following findings and recommendations referred to in the report are hereby published in compliance with the provisions of SDCL 4-11-12:
Current Audit Findings and Recommendations
Finding 2024-001 – Preparation of Financial Statements and Footnotes, Material Proposed Adjustments to the Financial Statements
Material Weakness
Criteria: An organization’s internal control structure should provide for the recording of all necessary material adjustments and the preparation of financial statements and footnotes in accordance with generally accepted accounting principles.
Condition: Warner School District 6-5 does not have an internal control system designed to provide for the preparation of the financial statements being audited, including required footnotes and disclosures and all necessary material audit adjustments, in accordance with generally accepted accounting principles.
Cause: The limited size of the School District’s staff and resources causes the inability to prepare the financial statements and footnotes and causes the need for auditors to, at times, propose material journal entries.
Effect: This condition may affect the School District’s ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. It may also affect the condition of financial information throughout the year being used by management in analysis and decision making and increase the risk that potential misstatements remain present in the financial statements.
Recommendation: This circumstance is not unusual in an organization of this size. It is the responsibility of management and those charged with governance to make the decision whether to accept the degree of risk associated with this condition because of cost or other considerations.
Views of Responsible Officials: Management agrees with the finding.
Finding 2024-002 – Lack of Segregation of Duties
Material Weakness
Criteria: A good system of internal controls contemplates an adequate segregation of duties so that no one individual handles a transaction from its inception to its completion.
Condition: Warner School District 6-5 has a limited number of office personnel and, accordingly, does not have adequate internal accounting controls in expenditures and payroll functions because of a lack of segregation of duties.
Cause: The School District has insufficient number of staff to adequately separate duties in all areas.
Effect: This condition increases the risk that fraud or errors might occur and not be detected in the financial reporting process.
Recommendation: Although it is recognized that the number of office staff may not be large enough to permit an adequate segregation of duties in all respects, it is important that management and those charged with governance be aware of this condition. We recommend that the School Board exercise adequate oversight of the accounting function.
Views of Responsible Officials: Management agrees with the finding.
Published twice on May 1 and May 8, 2025, at the total approximate cost of $64.01 and may be viewed free of charge at www.sdpublicnotices.com and www.aberdeeninsider.com