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

PIONEER CENTRAL SCHOOL DISTRICT AUDIT COMMITTEE REQUIREMENTS Sara M. Dayton, CPA Seth D. Hennard, CPA

AUDIT OVERVIEW 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 1

AUDIT SCHEDULE 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 2

AUDIT PLAN 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 3

AUDIT PLAN MAJOR AREAS • State aid, property and sales tax revenue, and related receivables/unearned revenues • Property and equipment, capital projects, related payables, and outstanding debt • Payroll • Compensated absences, pensions, and OPEB • Commitments and contingencies • Uniform Guidance • Extraclassroom activities 4

AUDIT PLAN 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 5

NEW ACCOUNTING STANDARDS 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 6

NEW ACCOUNTING STANDARDS (con’t) 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 – 7

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