Have you ever had one of those days? Have you ever had one of those weeks? How about one of those careers?
Now that I am older than dirt, I must admit that I sometimes get impatient. Actually, I have always been one to get impatient. I just get MORE impatient. I guess my impatience has to do with wanting to make a difference in the lives and education of young people. I want my career to be meaningful. Don’t you?
Sometimes we in the Business Office (or Transportation, Maintenance, Food Service, Technology, or Human Resources offices) do not get to see the day-to-day process of educating children. We don’t see the custodians who go out of their way to allow a learning-disabled child feel special by raising the flag in front of school in the morning. We don’t see the food service workers who go above and beyond the call of duty to greet children cheerfully in the lunch line (even though they themselves may be having a rotten day.) We don’t see the bus drivers who maybe go the extra mile to tell a child who needs a confidence boost that they have a cool backpack. We don’t get the hugs that the kindergarten teachers get.
When I go through the above mental gyrations, I really need to stop myself. Because the fact of the matter is that MSBO members DO MAKE A DIFFERENCE! All the efforts that we make to ensure the financial integrity of the district, to make sure the buses operate safely, to provide Michigan’s school children with warm food and classrooms are meaningful.
Next time you are struggling with the day-to-day tasks of your job, remember the lyrics to an old song from Van Halen:
“I get up, and nothing gets me down.
You got it tough. I've seen the toughest around.
And I know, baby, just how you feel.
You've got to roll with the punches to get to what's real...
Oh can't you see what I mean?
Might as well jump. Jump !”
And then jump right in to your day’s work remembering that what we do on a daily basis is for the benefit of kids.
First GASB and Now SAS: OOOEEY VEIGH!
Speaking of frustration! A few years ago, we learned about the Governmental Accounting Standards Board (GASB). GASB is the nonprofit board, which establishes the accounting rules for how governments, including public schools, must record their books. Now comes the American Institute of Certified Public Accountants (AICPA) with their Statement of Auditing Standards (SAS). Great! As if FID, SRSD, MDE, and SID weren’t already enough acronyms to be aware of!
The AICPA sets the rules the district’s CPA auditors must use in auditing the books. In the last couple years, the AICPA issued SAS numbers 110 through 114. These rules apply to audits of not only school districts, but also governments, and profit making companies including the companies of the Fortune 500. As a result of Enron and for many other reasons, auditors have to “tighten” the rules of how they audit.
I strongly suggest that you have a frank conversation and communicate, communicate, communicate with your auditors BEFORE the audit starts this year, DURING the audit, and AFTER the fieldwork but BEFORE the report is issued.
There are many things that you should know about the new AICPA SAS statements but maybe the most important is that the auditors are now required to report certain things (i.e., more things) to the Board of Education. Hopefully, your auditors will be conducive to working with you so that you can better prepare your Superintendent and the Board of Education so that they understand the nature of this new reporting and its significance (or lack thereof.) Some basic background on the new audit standards is:
SAS 110: Assessing Audit Risk and Evaluating Audit Evidence
This statement is a broadly sweeping update to the auditor’s requirement for their audit procedures including testing of internal controls. Keep in mind, in order to test internal controls, auditors will need to understand what those controls are. Guess who will need to give them information on internal controls? You (and other members of your staff) will.
SAS 112: Communicating Internal Control Matters
Since the auditors are required to spend time auditing internal controls, they are naturally required to spend time reporting the results of their audits. Auditors will be looking for and assessing internal “control deficiencies” especially “significant deficiencies” during their audit work. They will be required to report “deficiencies” that are “more than inconsequential.” SAS 112 is also the statement, which requires the district, not just the auditors, to have the expertise to prepare the annual financial statements. If the district does not have this expertise, then the auditors may claim that the district has a “significant deficiency” in its internal controls over financial statements.
SAS 114: Communicating with Those Charged with Governance (i.e., the Board of Education)
This statement requires the auditors to report all of the above (and more) to the Board of Education or at least an “Audit Committee” of the Board. They must report all “significant findings from the audit” to the Board.
In summary, the financial integrity of the school district is important to the Board of Education, to your community, and to the Michigan Department of Education Office of Audits. How we as MSBO members report that financial integrity is important. As outside and independent consultants, how the auditors report that integrity is also important. MSBO is here to help. Last year and this year, MSBO held an annual financial statement preparation workshop in June in Lansing to help train MSBO members. Stay tuned for more information on the new AICPA audit requirements from MSBO in the coming months. In the meantime, communicate with your auditors (and maybe your Superintendent) about the changes that may occur in the upcoming audit.
Strategic Planning at MSBO
Last but not least, I was blessed to host the annual retreat of the MSBO Board this year. The location I chose was New Buffalo. You can’t get any farther southwest and still be in Michigan’s Great Southwest. (In fact, there are plenty of folks in New Buffalo who really think that they are a suburb of Chicago, but that is another story.)
During our annual retreat, the MSBO Board and MSBO staff members participated in a strategic planning session. If there is one thing that I learned from that session, it is that MSBO Board members are passionate about the business of educating Michigan’s children. In addition, it is clear to me that I am blessed to be serving with a Board that considers service to the MSBO members as priority #1.
More will be reported on the MSBO strategic planning process at a later date. Stay tuned.
Have a great balance of the summer! Enjoy the beauty of the Great Lakes State!