##VIDEO ID:MBb3FVyzyPw## e e e e e e e e how you doing I would like to call the Fint Board of Education regular board meeting to order at 6:30 p.m. board member as I call your name could you please stay present for the record truste King treasur Luna Trust Ste rord vice president clack pres assistant secretary teria mag pres secretary Perkins present myself M Neil six present one absent I would Now call upon the SEC secretary Perkins to read the dismission statement and first statement in the standard practice District mission statement it is the Miss of the Flint School District to develop a community of Learners who are prepared to live work and contribute in an everchanging Society Flynn board of education standards of practice in order to provide outstanding leadership and better serve the Fint Community Schools we the members of the Fint Board of Education commit to the following standards of practice number one we will be consistent in our dealings with each other as well as student students staff and Community we will model trustworthiness and honesty in our relationships with each other with our superintendent and with our constituents we will focus on common goals of providing the best education possible for the students in the flank Community Schools we will respect the diverse views that each of us brings to the organization as well as the views of others that we interact with as we carry out the business of the Board of Education we will be open and authentic with each with each other our staff and Community as we work to make decisions we will focus on issues not personalities our decisions will be student centered and based on objective facts we will practice good listening skills to better understand our fellow Board of Education members and constituents thank you board member uh at this moment we're going to allow uh superintendent Jones to address the public regarding the issue um that happened at the school so at this point I'll turn the floor to Mr John before we proceed thank you board president just want to um there was a situation that happened at one of our elementary schools where uh one of our third party substitute teachers uh decided to speak to students uh about uh a Ouija board um it's not in our curriculum it's not something that we condone as it pertains to speaking about those type of things in a way um that would instill fear or even uh speak away from the curriculum so just wanted to address and say we have rectified that situation and we have determined that um we would not have that particular uh third party party uh staff member uh in the district uh so that we uh can ensure the safety and well-being of our Scholars and make sure that our Scholars are being taught the curriculum and uh not things outside of our curriculum so I wanted to address that um and make sure that our families know uh that the safety and well-being of our Scholars is most important to us and we have um handled the situation as it pertains to the concerns about a Ouija board in our district thank you thank you Mr Jones moving along approval of the minutes I see a motion and a second to approve the minutes from the October the 9th 2024 Committee of the whole meeting October 16 2024 special board meeting October 16 2024 the regular board meeting and the October 18 finance and operation Committee of the whole Madam chair yes I'd like to make a motion to approve the minute from the above mentioned I'm not going to mention all the meetings but previous mentioned meetings support motion by trustee clack and supported by trustee Perkins are there any correction Madam chair yes um I wasn't present at the October 18th meeting which was which was held on a Friday and I would like to have the presentation that was provided that day and also in regards to the all a of 8 million to cover the overage ofer funds I don't understand that I see where that was uh voted on so is there any way that we can um I can receive this information because $8 million that's a lot of money and I had no knowledge of it so can someone explain that or just give me clarification on why we would need $8 million trusty rifa we have um Administrative Assistant get you all of that information she took the minutes as well all right uh you have any comments it was just a point of order that we're voting on the meeting minutes and this is something that yeah this is something that it's discussion it I can ask a question because I wasn't there well the thing was were there any correction that's the correction I want to make I wasn't there and I don't have that are there any more any other correction s n the motion to approve the minutes from the October the 9th the 16th and the 18 will be conducted by a roll call vote as I call your name say yes or no secretary Perkins yes trustee McIntyre yes vice president clack yes trustee reler no truste King yes treaser lonea is absent and myself is say yes five yes one no one absent Madam chair yes will this will miss beer be able to give me that information regarding um October 18th meeting I point of order thank you I asked a question point of order what is the correction to the meeting minutes this is not a correction of the meeting minutes first of all I have the floor this is a privileged motion this is not appropriate at this time to have this question is this a question about approving the the minutes yes or no no it is not we already done with okay okay thank you very much your point of order was out of order so Madam chair my question is will miss bear be able to give me the information I ask for that's just a question yes or no hopefully she will okay thank the board will not hear will hear comments from the public we ask that you state the reason for addressing the board and that you limit your remarks to three minutes on matter with the authority of the board and not address individual by name the presiding officer of the board shall have the rights to limit the numbers of person who may address the board please state your name first before beginning to speak is there's anyone here from the public who wishes to address the board come forward please good evening my name is Mr Brandon Betts I would just like to continue to affirm our school um nethercut Elementary School I couldn't hear you uh my name is uh Mr Brandon bets I'm a Student Success coordinator at nethercut elementary school thank you um I would just like to to affirm our school um for their um leadership the the family community environment that I have been able to um learn under nethercut is one of two priority schools that have met all 11 of 18 month benchmarks um capacity and enrollment are important factors when making uh decisions but if we're truly in education for results nethercut Elementary School um should not be on a chopping block and remain open but that's not necessarily up to me um one thing that I I did come across when it came to school closings in Michigan this can disrupt um families Um this can disrupt student peer and teacher networks um the routines that families depend upon um as well as accelerate the decline of a school district um we are one of the schools in the district that have uh about 80% of our staff our our certified teachers um two actually came out of retirement to work under um Mrs cook and Master's leadership who is a great mentor to me um I've built a great relationship with her we've we've created opportunities for these students to become uh lunchroom captains we took them through uh rigor rigorous um interviewing processes which will start back up for the next um session in January but this gives them an opportunity to um to have some responsibility as well as learn the mechanics of adulthood um and just becoming a little bit more responsible um the potential of a school closing um I did not hear this from anyone's mouth but I know that we have quite a few tenur um teachers who have experienced multiple um school closings and um just based on body language and sentiments shared I'm not sure if if they'd be excited to to move you would you would think that um priority would be well if we're getting results in this area maybe we should move people who are not getting results in one area to a place where things are affective effectively ran um that's that's all the information that I would like to share today once again um just affirming my my my building my administrator as well as the teachers um Miss SCH Miss Barnett Miss Sparks and Miss Spencer thank you thank you is there's anyone else here from the public please come forward and you can just line up if you're ready to speak good evening my name is Aaron thank you for taking the time to listen I am with a team that's putting together an event in Flint called Christmas at the Dort Financial Center so it's right here really close we'll be having that on December 21st it's an event that we did last year we had over 65 churches that were we were working in collaboration with and this year we are doing that again working with churches and also Community leaders and trying to get even more impact into the city of Flint last year we had about uh 4,000 people attend so we expect more than that this year as we're working with a lot more people our goal is not anything beyond just to give hope and encouragement to the city of Flint to help however we can so some of the things that we're doing is we're partnering with the MTA bus system to get people free transportation to and from the event they can show up to any bus stop and just say they're going to the door and the the bus will take them there free of charge bring them back home we are also partnering with food pantries to do food distributions and in and around the Flint area to try to bless the the Flint area and then also we're doing some toy distributions we have three different dates that we're partnering with um some of the local areas um to do some toy distributions one of which is in the elementary schools of Flint that we will be making sure that every child infl has a toy so part of the reason that I'm here today is just to let you guys know about that but also to ask if you have any other ways that we can let the people of Flint know about this event the goal is that everyone would know that it's for them that they can come as they are come in their Crocs and their sweats we don't care we just want them to come in the door hear a message of Hope celebrate Christmas together and be an encouragement to them so that is my my goal here is informational but also and ask if you have I don't know if there are schools that we can speak at an assembly let kids know that they can come free of charge that it's for them we'd be more than happy to show up anywhere and do anything so thank you hold on one second Aaron um nice meeting you um do you have any more little boxes of card that you gave out to me Saturday um Dr yes and I wanted the board to have them uh I think that and they looking for volunteer I hear and did you want to do the uh you did want to have a question about um working with the school do you want toyss distribute at the school or they just come to those location we are actually dropping them at the Flint schools on um I believe the date is December what's the date 12th it's a Thursday I let you speak I the 12th yeah yes the 12 and if you don't have enough they can kind of share some of those um Mr Jones can speak also as well superintendent Jones y our PR team is working uh to put this information out and what I will do she's she's actually watching the board meeting oh okay I will make sure that she reaches out to you all again U for I'm not sure how she's um um as well as uh I don't think he's here I'm not to address anybody but the member that allowed me to go over my time last week I wanted to thank him for that um as a parent and you know this being something new and it can be emotional and all those things I really appreciated that for him letting me get my thoughts out I am so sorry and that was it basically thank you thank you is there's anyone else please feel free good evening my name is Billy Mitchell I am the parent to the student at Freeman Elementary who was introduced to a Ouija board her and her whole classroom and so I came tonight just wanting to know um what measures are going to be taken in order to address the issue I also wanted to see what protocol is used when we hire teachers when we make them permanent teachers in their subs and they're not really qualified to teach our students thank you Mr Jones just superintendent Jones just spoke on that beh have you might I saw you came in late uh Billy um if it's okay with the board is Mr JN could repeat what uh the protocols they use to address that issue sure are you finished I am okay uh first of all we we do apologize that your child had to experience something like that uh that is not something that is condoned by this board of education or the leadership of this District um we have taken measures uh without uh going too far um we have taken measures to ensure that this particular person is not in our district any longer uh that has already been taken care of and um when it comes to how we hire teachers uh if if it's a third party uh we we work with a third party firm for substitute teachers um when it comes to certified permanent teachers we hire within the district meaning we do those interviews uh but we work with third parties for substitutes uh basically that's most of the time how it's done unless we have our own substitutes on staff in which we don't in that case so uh to speak to the situation the situation has been handled uh that should not be happening to your child in our district and anytime something like that does happen to any one of you listening on this call uh please make sure that you reach out to the district and we will handle that situation so thank you thank you thank you there any more comments seeing no comments we'll move on to our audit presentation at this time I would like to ask Miss Cindy Scott from Stevenson and Company to join us on the stage evening evening good evening I don't think I see any audience is not aware my name is Cindy Scott I'm a partner at Stevenson and Company and I had the pleasure of being in charge of the Flint school's audit this year with me I have Nathan Miller Nathan is a manager with the firm and he has oh probably just as much experience on school audits as I do so he's definitely my right-hand man and he has a very integral part of your audit as well so i' like to have him here so if you do have questions you have two sets of ears that are listening and that way we can make sure we answer the most efficiently so I do have a PowerPoint I think they're going to be pulling up it didn't come through do you have from the original email I checked she's doing a presentation for the public I'm sorry I'm waiting for them to pull up the PowerPoint and I want to see if Miss Cleaves has it you don't have it so it's not coming up do you you do have it over there you just do you want to grab the laptop and we can send it we can send it again I can start chatting with you in the me time but that way we don't have to hold up your meeting so none of your executive team has the PowerPoint okay thank you proceed I was going to say I think the date would have been right at the end of September early October you do have it we can put it on on a thumb drive for you too Shand did find it too mhm thank you great thank you oh beautiful I'll let you handle that all right so the whole reason why we do what we do is to issue an opinion on your financial statements so we are not here to say whether or not these financial statements show that you're in good Financial standing or poor financial standing we're here to tell you is this information accurate and free of material misstatement and yes it is we've issued an unmodified opinion which is the highest level of assurance saying that it is free of material misstatement and you can rely upon this information for management decisions so the whole reason we come out here and spend several weeks and and bombard your staff with lots of tests and lots of questions and lots of requests is to ensure the Integrity of that information so it is a positive thing to issue that unmodified opinion and it is the highest level of assurance that we can give so when you're looking at that bound report just pass the index the table of contents you'll find a two or three page opinion letter and that's what that is next then you get to What's called the Management's discussion and Analysis this begins on page three I really encourage all of you to read through this page by Page line by line it's a recap of the current year activity and it's really just a good read it's a good way for you to have a feel about how the year went and what things transpired and so I encourage you to read through that and one of the big highlights here on page four is it talks through your Capital outlay additions and you have massive additions going on so many improvements and Nathan and I actually had the ability on one of the last days of the audit to walk through some of those buildings and see those Renovations and it's just amazing to see what you've been able to accomplish so page four is going to detail those numbers out for you and then on page eight We Begin the government-wide financial statement so to give you a real quick refresher on how that works with your financial statements you have two different sets of data you have your fund level statements which take each fund individually your general fund your food service fund your debt fund and so on and then at one time a year you have to combine all of that information into one big big set of data and then we incorporate the long-term activity like your land your buildings your equipment all these huge beautiful Renovations that you're doing and then we also take into account any long-term debt so any bonds any notes payable and that really big ticket one your net pension liability so all of that gets Incorporated just one time a year on those government-wide statements that begin on page eight and on those statements then you'll see that your ending net position was 35,246 949 now keep in mind that's including the land the buildings the equipment so a big chunk of that 70 million to be exact is actually made up of your land you're building and your equipment net of the related debt the net pension liability is the number one liability on your books and as of June 30th your net pension liability was 55,68255 so a very very big number how'd that number get so big so let me give you a quick recap of how that's developed oh I'm sorry I'm sorry I said I apologize I said I apologize okay so we will get to that and I'll explain how this works so one other thing I want to point out is you're going to notice on page eight that you have a an asset this year called net OPB asset now historically this has been a liability similar to the pension liability but because so much money has been funded by the district into and not just this District all the school districts in the state of Michigan because so much money has been flowed into the opab liability it has now flipped and it's over funded and there's an asset so let's take a step back because I do think it's important for you to understand the big picture you have the net pension liability and the OPB asset formly known as a liability and what these are are at the state level every single School District in the state that participates with the Michigan public school retirement system and there's I think 800 some districts that participate every single District pays in what what they have to pay in toward this retirement it's a percentage of the salaries that the state tells you you have to pay in and then over and above that the state gives you additional funding through your state aid every month that you have to turn around and pay in to the retirement system to help pay that down even quicker so unfortunately you have no control over how much you have to pay in it's a dictated amount so this huge multi-billion dollar liability at the state level is determined by actuar at the state who do an Actuarial valuation every year where they come up with assumptions those assumptions are things like at what age is the average female employee going to retire and at what age is the average female employee or retired employee going to pass away things like that at what rate of return are our investments going to be receiving of Interest that's going to help pay down this liability so all of these assumptions are made at the state level none of us have control over that so every year when they do this Actuarial valuation they say okay what is this multi-billion dollar liability how much do we think we are going to have to pay for all current and past employees in the entire state from retirement to death and they come up with this huge number then they say Okay of that amount how much have all the districts in the state that are participating how much have they put into this huge trust that the state is holding and they take the difference and that's the net pension liability of that multi-billion dollar number they then proportionate it out think of a big pie and they're giving every single School District a slice of that pie and from that slice that tells you here's how much of that debt you owe so this is a huge estimate it is going to fluctuate year after year after year you're going to see it go up some years you're going to see it go down some years even though you're continuing to pay into it based on how those assumptions change at the state so all we can do is inform you what your number is and I just want to stress it is an estimate it's going to fluctuate so this year it looks like you're overfunded with OPB OPB is other post-employment benefits so think of the health care that your retired employees receive so that OPB right now is overfunded but it's very possible that a year from now if their assumptions change you could be underfunded again and we could have a liability um let's go on to the next page so looking still at the big picture I'm talking all of your funds combined all of that long-term activity included what were our big changes and the net pension liability did decrease this year about $18.5 million so because of assumptions changing and because of the dollar amounts that you're contributing to the state and the fact that your piece of the pie your proportionate share went down the state's giving you a little bit less of that P now your overall liability went down about 18.5 million that's offset by close to 11 million in Assumption changes so the net effect you feel is about $7 million roughly the OPB was a liability now it's an asset and that was a swing of close to 5 million next slide revenues big picture everything included revenues increased about $ 31.2 million there are two big ticket items that that really pushed that increase and one was your property tax revenues going up 1.5 million mostly related to just taxable value increases and then the Esser dollars the portion of the Esser dollars that you were able to recognize with all this construction specifically increased close to 30 million on the expense side your net change in expenses was an increase of 1.4 million and there's lots of ups and downs and I have them detailed in that PowerPoint that should be available to you if if you have not received it yet we can get that to you but the big CH changes here is you did have an increase in supplies of about half a million dollars purchase Services went up and you're going to see salaries and benefits went down there was more Outsourcing especially with jisd a lot more services being outsourced where they used to be employees in house so you're going to see some fluctuations there um and also because that net pension liability and that OPB formerly a liability now an asset when that fluctuates so much it has to run through current year expenses so because those went down it shows an your expenses going down as well beginning on page 10 then is when you get to the fund level statements this is going to line up with what you're familiar with looking at it's going to be what you're budgeting in accordance with and just be more familiar numbers and it breaks your funds apart by by fund and the only major fund that you have currently is the general fund so looking at where your fund balance ended up in the general fund just to refresh your memory there's five levels of fund balance the first is what's called nonspendable so it's part of your fund balance part of the overall value of your general fund but it's not cash that you can spend it's inventory It's a prepaid expense that you've already put the money into so it's nonspendable and you did have 38,000 of nonspendable the next step down which you currently do not have in the general fund would be restricted so restricted fund balance is when by legislation or by Grant or it is legally restricted for specific purpose so that would be a debt Levy for your taxes for example or your Sesser funds if you received them in advance before you spent them or something you do not currently have any restricted fund balance the next would be committed if the board by formal board motion or resolution committed dollars for a specific purpose those would be considered committed and we don't currently have those after that would be assigned Now by nature of you approving a budget for 25 where your expenses exceed your revenues the definition of that means that you're assigning some of your fund balance for next year's operating cost us so we do have assigned fund balance of just over $10 million and then what's left what's unassigned what are you able to budget with 47,6 181,182 per of your current year expenses now couple things are skewing those numbers for you because you'll notice it says that last year your unassigned fund balance was 77% what's skewing that for you somewhat is that you had all of these construction projects and in your general fund all of those projects come through as expenses so it inflates the expense number and when you inflate your expense number it makes your fund balance amount seems smaller when really you have very inflated general fund expenses this year with all of that construction so I do want to point that out because I think that's a comforting thing to know it's skewing your number however I do need to caution you and I know you're aware of this the Sesser funds are going away this is your last year that you'll be drawing those Sesser funds in your completion of these construction projects and then it's you're going to feel the pinch so while I want to compliment you in saying that that 41% I think is a skewed figure because of how high your Capital outlay expenses are the SRA moneyyy is going away and that's made up up a huge portion of your Revenue so you are going to feel that pinch and you're going to want to very closely Monitor and I know that your your Finance director is doing a fabulous job she'll be monitoring it I'm sure to say okay now that that Sr money's gone now what now what's our projection look like next slide so looking at our revenues I like to take a three-year look at our revenues based on type of Revenue what's the source so you can see local state federal interd district and other pretty much everything's been pretty consistent some slight increases on the local side in the state side but the big jump was that Federal your federal revenue just spiking up with those Sesser dollars so you are going to see a drastic decline next year and then on the expense side same thing I like to compare three years by type of expense and you can see your Capital outlay has been huge huge increase this year your purchase service are going up you've got a lot more things getting outsourced and at the same time your salaries and benefits are coming down but the salaries and benefits are not coming down as fast as the purchase services are going up so on those purchase Services even over and above the employees that are now being outsourced out you also have things like um help me remember here you had increased legal fees and you had increased security costs oh I do have that there okay so there were a lot of additional purchase service type costs that increased over and above the just the genes ISD employees for example Security Services virtual classes um fees licenses some software so things like that next slide and then just looking at what makes up your expenses usually we're going to see salaries and benefits around 65 to 85% of your expenses you can see that yours is significantly less than that right now but those Capital outlay costs are really skewing the picture this year so it is not a fair representation with those Capital outlay costs so then beginning on page 14 it takes us to the notes to the financial statements I really encourage you to read through this um it gives you more meat behind each number I'm not going to talk through all of them I think that's a lot of information but there's just a few that I'd like to point out we are always required to disclose if there's any pending litigation we try to make sure we do it very respectfully and um confidentially but while Meeting those requirements so we do disclose that and then if the board approves something after the end of the fiscal year but before we issue the audit report that's significant that we feel we need to make the financial statement user aware of we disclose that as well so on August 17th the board approved a public address system upgrade with Rowland soundcom at DTM Eisenhower Freeman in Southwestern for 59846 so we're disclosing that to the user I'm not going to read all of these to you these are included in your footnotes and it's in the PowerPoint but when the board has commitments outstanding so this would be the board has already approved a contract and maybe that contract just wasn't complete at June 30th then we have to disclose that as well what was the total contract approved and how how much was still remaining at the end of the year and with all of your construction there was still about 15 million outstanding at the end of the year so we are disclosing that as well and then the last piece is we did have to have a prior period adjustment this year the last in the last audit there was a unreconciled cash item that was out there on the bank wreck that needed to be cleared and I Believe Management thought it was cleared one way but it was still sitting out there so this year to make sure that got cleared management posted an adjustment to get that out it's an err I think dating back to 22 and rather than skewing your current year expenses we thought it was more reflective for the district to do a prior period adjustment so that your current year activity is truly a reflection of your current year activity so that that error from 22 could go back to 22 and then next is the budget so we are required to and this is um in the required supplementary information towards the back we are required to compare what did the board originally approve what was that final budget amendment and then where did you end up are you are you using your budget as a management tool as designed now the rule of thumb is that you want to stay within 5% or be within 5% of what you budgeted and as you can see there's some significant differences there I think the challenge that you faced this year is you had so much construction going on and when it comes to your audit all of that construction the expense and the related Sr Revenue has to be recorded with the exact percentage of completion as of June 30th and when you're approving your budget your final budget I don't know that there's any realistic way for you to know exactly what percentage of completion each contract is going to be and so because of that there's going to be significant adjustments between expenses and revenues to line those up but the good news is if you look at the net difference between how far off on revenues were we and how far off on expenses were we your net change was very consistent so this is good this is a good outcome I just want to help explain why there's such large variances on page 47 it goes into additional supplementary information that's there for your um for your perusal and the one statement here I want to point out I it's not a required statement we add it for your benefit but you'll notice that for the general fund we go through all of the different departments we'll say elementary schools and High School athletics um transportation and so on and we show you what did you spend last year what did you spend this year and what did you budget so that begins on page 49 and so I that's just a good way if you're wanting to go drill down to a specific area and say how are we doing compared to budget and how are we doing compared to last year this is where you can look then we get into the single audit now a single audit is required whenever you spend more than $750,000 of federal funds you are well past that your federal revenue this year exceeded 74 million now just a heads up not next year's audit but the year after the federal government is increasing the threshold of when a single audit is required but they're increasing it to a million dollars and you're still going to be well past that level so you'll still have to have a single audit so for this year there were three programs we had to test we had to test the nutrition cluster we had to test title one and we had to test Esser and in doing that let's jump past this one I want to stick with single audit one more there you go in doing the the federal testing we have have to test various compliance areas and components for each of those federal grants and so if you recall last year we had some issues with the nutrition cluster and the food service was not able to provide us with the documentation to support all those meals being claimed I am really excited that we tested that very thoroughly this year and the controls have that have been put in place are working excellently we had no findings at all I'm also really excited to say that I've had a lot of conversation with Department of Education because I know they had to come in and do an audit after that finding from last year and it is it's sounding like they were able to obtain all the documentation they needed from the district so that's excellent news because that would imply that there's not going to be any recapture of funds so great job to everyone that was involved I know that Miss Cleaves has been very involved in that and she's now certifying those draws to make sure the documentation is there so excellent job there no finding the next one the next area we had to test was Title One and with title one we did have a few areas that we documented in our management letter that we're going to get to but I want to just talk about them while we're talking about Federal funding and we had two areas that we did have to document as a as a management comment but the Department of Education said we did not need to record them as Federal grant findings the reason it's important to know that difference is because it doesn't show up if it's not a Federal grant finding it doesn't show up in the single audit that goes to the federal government it just goes in the management letter to you saying here's what we noted and here's our recommendations so we did have for Title One some documentation errors found for payroll not that anyone was paid an incorrect amount or that anyone was charged to the wrong place everything was charged correctly but some of the documentation was not accurate that employ employes were signing so for example and this is not a correct example it's just an example it might be a first grade teacher whose form says they're a kindergarten teacher but they're not so they're being charged to the right place they're doing the right work but the form wasn't accurate and it's just really important that we make sure that everyone knows what they're signing is 100% accurate so that's just a documentation issue and then we also had a few account codes where maybe it was approved in the application as um a purchase service but then it was charged in the general ledger as a supply it sounds simple enough and it was allowed so there's no question cost but because it's not charged to the exact place it's approved we do have to document that so those were the two issues for title one but again nothing was charged that shouldn't have been there's no question cost where the state would come back and recapture money and we did not have to report that as a single audit finding so great job you have a lot of Grant dollars flowing through through so to not have anything that we have to put in writing for title one in this in the single audit is huge so that is a great job then there comes Esser and we did have a finding with Esser that we were required to disclose in the single audit as a compliance finding um that will go to the federal government but the good news here is there's no Associated questioned costs so they will not come back and recapture but it is still a significant enough issue that it had to go in the single audit and what was happening here is whenever you have construction and I have all of the actual legal language in that finding but the layman's terms if you have construction that you're paying for with Sr dollars you have to make sure that all of your contracts are following the Davis bacon prevailing wage requirements those requirements mean that your contract has to include the language for prevailing wages which it did that and then all those contractors that are being used they are required to submit to the district um certified payrolls and is that every two weeks or every month do you recall Nathan I don't I don't remember the consistency but I believe it's at least monthly where the district test receive the certified payroll which supports and proves that those prevailing wages are being paid and so when we did the audit and we we requested those certified payrolls to prove that those were being supported and provided we found that they were not being consistently provided to the district it was only when the contract manager would reach out to the vendor and say I need this and then they would get provided so we said okay we need you to get them and provide them to us now had everything been paid correctly then we could have treated this like we did Title One and just said um it's a management comment but we don't have to put it in the single audit but the problem is is that one of the vendors that was in our testing was not paying prevailing wages and they actually got caught by the Department of Labor at the state so that's what tripped it up now the good news is it's been corrected they've been paid so that's why the district doesn't owe any money but the the learning point from this is that we've got to be getting those certified pays every month so that we are protected and knowing that our contractors are f following the contract that they signed all right the rest of the management letter so enclosed in the back of that audit report is an is a management letter that has two appendices and the first appendix is very canned communication any significant audit matters yes your net pension liability and OPB asset are estimates I cannot stress enough how big of a deal that is I want to make sure you you know it's an estimate are there any difficulties that were encountered no you have a fabulous administrative team they are a pleasure to work with I know we work them very hard and they probably go home at the end of the audit and just need to sleep for a week but they're doing a fabulous job and I can't commend them enough for that any corrected or uncorrected misstatements no anything material that was noted was corrected um any disagreements with management no management provid us with written representation that they were not withholding information from us that everything they provided was accurate to the best of their knowledge we're not aware of you Consulting with other Auditors for different opinions we gave you an unmodified opinion which is the highest level of assurance and there are no other issues or matters that came to our attention outside of appendix 2 so then we get to appendix 2 and this is where we have the requirement and ability to provide recommendations so these first two material proposed audit entries and Bank reconciliations you're going to see these two also listed in the single audit because of the fact that we're calling them material weaknesses and significant deficiencies but they're not compliance related which is why I wanted to wait till now to talk about them they're just internal control so that first one material proposed audit entries all this is saying is that there were some material adjustments that had to be proposed during the audit so we are just giving you our disclaimer to say had had we not proposed them the financial statements would have been materially misstated so it's our disclaimer to make sure you know that these are your financial statements and that you carry that responsibility of approving them this is a standard comment it's in about 95% of our audits the state knows it the state really doesn't care about it but I want you to understand what it is so that this isn't one that hangs you up I don't want this to be a concern to you it's really just our disclaimer the next one the bank reconciliations I want to stress management is and has been doing Bank re monthly accurately and everything's good it was just the fact that we had that large item dating back a few years I think 22 that carried forward year after year and we're saying let's not let unreconciled items not get cleared out no matter how large they are and then the other matters time and effort reporting that's that title one payroll documentation I mentioned that we already discussed we're just putting the comment in there of making sure that all of those forms are accurate and that people are checking the accuracy when they're signing them the grant coding that's related to that title one making sure we're charging it exactly where it's approved in the app student AC activity funds I want to stress we did not discover or or uncover any issues with Stud activity funds but we're just still working with the building um principles working with department heads cuz there are there are so many places where Student Activity funds can have issues so I just like to keep this comment in there while we work through all of your buildings the last few years we've been able to do a couple buildings each year work with a few department heads each year trying to help them strengthen those controls so we're going to keep doing that till we get through all of the buildings and everybody's in tiptop shape and then the next one was that Davis bacon prevailing wage that did have to go in the single audit report as a compliance finding for verbal comments these are just things that we make we made verbal recommendations to management but I always want the board to be aware of what those verbal recommendations are just reminding management of the transparency reporting requirements for your website nothing was late that was missing that you didn't have time still to get uploaded so it's just a general reminder to make sure we're getting those done there were some outstanding checks that were over three months and so we just encouraged management to go through those outstanding checks because at some point you're going to need to follow the state sheet rules where they get a sheet to the state um athletic events so last year we had a comment on athletic events and making sure we had the right documentation to support when an event's canceled because otherwise you don't know if you should be looking for a deposit for gate receipts but there's been a transition in your directors so we just are making the verbal reminder to let's make sure that the new director is on the same page and we did meet with him we talked through all those recommendations with him so just a reminder to make sure that when you have a changing of the guards that the new people coming in know the good controls and safeguards to have in place and I'm confident that he understood that and then the last one was with vehicle documentation in our testing we found a vehicle that had service work done it was one of our random tests and at the time of the audit we were unable to confirm ownership of the vehicle and so management was working on making sure that that documentation was in place yes this is a correction the athletic person you talked to he's interim oh okay he has not been voted on or any of that we haven't even posted it but he's just interim supporting us right now okay I just want to make that clear so the interim individual is who we met with to make sure that he understood what what we think needs to happen to control it just want to make sure we say that okay my apologies and then following up on last year's comments financial statement preparation controls that is the same comment as what we just talked about with material adjusting journal entries same comment it's going to be there likely moving forward especially until all of your construction is done because there's so much that goes into that the meal claims for your food Ser or your nutrition cluster 100% corrected fabulous job there last year we had a comment on the final expenditure reporting with s or two not matching the budgets or not matching the trial balance that was completely corrected the grant coding um that situation still exists with making sure title gets charged to the right place athletic event deposits we said progress made Student Activity funds we put situation still exist because we're still working through all the buildings and then non-accountable meal reimbursements last year we had that comment on making sure that we have the right policy in place for whether a meal plan reimbursement is accountable or non accountable and I know you did approve a policy and you're now following that correctly so now any questions I know that's a lot lot of information okay Boardman raise your hand and then I can Mr CL I was just looking um I was looking for the line item that says Student Activity funds what page is that on I can't find it so that's going to be in the letter that's Loosely enclosed in the back there's no yeah but are you looking at the thick you found that no I found that part but it was there was is there a line item in the in the in the but in the financial statement part oh there should be it's going to be probably on page I was thinking 10ish but okay oh are you looking for the fund itself or are you looking for the comment no I saw the comment just okay page 48 if you look at the second column in you'll see student services fund that's going to show you the revenue and the expense for your Student Activities looking in the wrong section okay that's it I was looking in the wrong section thank you did you see yeah yeah no yeah I just didn't see I was looking in the wrong section yeah I'm cool so with the finding who is responsible for ensuring that in general because I'm not sure how this process works when submitting invoices or submitting the the statements is it the vendor responsibility or is it the um project managers responsibility you were saying that the project manager would request and then that's when those reports would be forthcoming but they weren't so like I'm trying to figure out is this the responsibility of the project man manager the vendor I'm going to say this is the responsibility of the district so when I say District the individual that you're going to place with that responsibility I don't want to presume who in the district you're going to you're going to place with that responsibility but I would say that the responsibility of making sure that you have those certified payrolls falls on the district not the vendor now if the vendor signed a contract I think the vendor's in the wrong if they're not following that contract but someone from the district needs to be reaching out if they're not getting it okay okay so whoever we've designated say for example if we have a project manager company firm that we've hired to oversee all of this this and we're expending excess money because we have a project manager as opposed to not having a project manager who's supposed to take all this stuff okay so it falls under the district I understand the I think if the district has designated that responsibility to a project manager then that would fall on the project manager so is there any way of so you're saying that we should not be concerned about the vendor not complying I I'd be concerned about I mean not that it's the vendors necessarily at the end of the day it falls on the vendor's responsibility but if the vendor is not following the law I mean is there any way of us figuring out which vendor it is so that we can have that into consideration when we are looking at I can provide that I don't know that that's something that we should do in a public meeting but that is something that we can provide and like I did say it it has been correct Ed I think my focus at this point would be moving forward saying okay now we know what happened I want to make sure these certified payrolls are coming in every month and then if if vendors are continuing to not comply then I think you have a breach of cont contract that you need to look at but I don't think I tend to think vendors are are not going to not comply I think if it's just not enforced they're not going to take the time to do it well I I'm okay so here's my here's my thoughts as a board member um um prevailing wages are pretty important I think uh especially considering the stance that we take with uh our unions and our teachers and our staff and how supportive we are of that and trying to do our best to make sure that people are paid what they're worth and what they earn and and a living wage and if we have a vendor if we're Contracting with a vendor that's not as concerned about that I think that that's something to take into consideration when we're looking at vendor contracts and I would like to know being the one that's fiscally responsible as a board member overall at the end of the day I would like to have this information so I'm I mean I I understand what you're saying like I'm not I'm not here to find a scapegoat and to punish and to blame I'm here to get informed so that we can be better as a district move forward and we can make better decisions especially with with vendor contracts because I know that we struggle with dozens if not hundreds of vendor contracts with outside vendors and I would really like this this is important information if we have a vendor that's struggling because I know that we try to support local vendors um and um uh you know we we really want our community to be supportive as smaller vendors that if they are like say for example they're just ignorant of you know helping like that vendor be a better vendor especially if it's if it's a Community member does that make sense want information exactly what are you asking us to do what what make okay so what I'm asking is I I would like information of the vendor but I'm trying to contextualize that so that you know that it's not a punitive measure that it's something and it's also something that we need to look at as we're moving forward with looking at vendor contracts and renewals and I I do believe and I I will forward that information absolutely I can send it to the superintendent and to miss Cleaves I believe that the claim when because this was caught by the Department of Labor yes and it was already corrected before our before our audit even started yeah and I believe what the statement was was that this vendor had the incorrect prevailing wage schedule they were using like a former schedule a past schedule so they were paying old prevailing wage rat rates they did not have the current prevailing wage rate schedule in front of them which is still their responsibility as a vendor to have yes it is but it's the district's responsibility to make sure they're getting the certifications to prove that they're doing it yes it is yes and I understand and so you can see what I've got like a two-fold approach is that I want to support the vendors that we're trying to support and uplift to you know be because there's so many things to be mindful of especially if you're a new company or a uh unseasoned company you know following with all of these crossing the te's and dotting the eyes Okay um the other thing though is I would like us to have a discussion or maybe have it as an agenda item on another meeting why our project manager did another thing that potentially could have jeopardized the district Construction Construction manager okay so here we are Contracting again with vendors you know having these these contracts I just I I want people to do what they're supposed to do and follow through with it yeah I think we're going in totally two different direction as it relate to the audit got a good point that we can start right into what we should do like have this agenda talk about the contract are you asking Dam to put or I'm taking a note that we have a finding right a finding a significant finding yes it was significant and we have to do due diligence to ensure that moving forward that we don't repeat these things and so this is a note not necessarily to the auditors but saying based on this audit let's make sure that this doesn't get overlooked in the whole so this would be agenda item for the treasury Department for your treasury uh committee no I think it should be a committee of the whole meeting I think all of us yeah we all would be in it but make it agenda for you guys to have a committee as a whole to discuss that it do I don't care what okay what meeting it's in as long as it's in a meeting okay and and probably sooner than later yeah okay um and I did have so with the activities with the Student Activities fund I thought that was something we talked about it's it just we've talked about it every year so okay and I don't want it to seem like that department heads and and principles aren't doing what we're asking you just have a lot of department heads in a lot of buildings and so we hit a few each year and so I just want to keep keep that reminder out there so the big key is and as you could see on page 48 the dollars running through there are not significant but that doesn't mean that it's not a really important thing to always keep on the Forefront of our minds that if we have a fundraiser we need to have really good documentation to support that all the money that should have come in made it to the bank and I'm not implying that it didn't I'm saying that as we work through each building we find weaknesses along Ong the way where we want to help encourage them to to tighten it up especially like with the timeliness of how quick things are getting turned over to the business office and so on so as we go into each building we're just going to keep reminding until we make it through all of them and everybody's on the right track so why was it in the category of not making progress but that it was a I think that's a good argument that we probably could have done that okay I I wanted to know what the distinction was um what could have what could have made it be the middle one thing that we have found that makes it challenging to really discern between the two is some buildings have said we don't want to deal with this so we're just not going to have fundraisers mean meaning it's not that they're ignoring the rules it's we're not going to do things that would require this extra work so it's hard to see if progress is made when we can't see activity happening okay so but I I definitely could buy the argument to say we prob probably could have said progress made because some buildings are working towards it all right and then one last thing if I may okay yeah I told you yep so ownership of vehicle was there like a a problem figuring out who owned a vehicle one of the random tests that we did was we looked at some credit card statements and traced every single transaction to make sure that we could support and provide that every single transaction was a district transaction and there was repairs I believe on one vehicle that we were not able to locate the title to know who owns that vehicle am I saying that fair point of information uh to trust you where are you at inside the uh packet what page number that last page oh I think it's the she's probably looking at the last page of the I don't know just notes I took on the oh okay oh that was in the verbal comments I'm sorry so that's not in the bound report that was in our power okay so is that going to be found management was working on that it was the only piece we found it was not a large expense at all but we thought it was important enough to note and management was working on that okay so okay I I just wanted to again not to the Auditors but I it just seems like we've gotten a lot better but we've been kind of sloppy with the vehicles I don't know who's driving them the mileage all this finally we have them parked in the administration building and not running all over the place but we've got somebody who could potentially be sort of using a credit card to fix their the investigating I okay but I I like why I'm so am I if I may yeah am I correct in thinking that we knew which vehicle it was but we couldn't find a title for this vehicle so it's not that we didn't know what vehicle on the premises it was we can't find ownership of who actually owns this vehicle it's a vehicle from what from the year 2008 damn problem it could be one of problem it's not one of the newer vehicles uh but it's a vehicle from 2008 and you're saying you're you're investigating this is that Miss Cleaves is investig is trying to find that title yes we were comfortable enough with management saying no we know that's our vehicle but we just can't prove that it's our vehicle is that fair I don't you did locate it okay so she's requested a duplicate title because they couldn't provide us with a title so here just one just a comment here's my thing when I've worked in retail we used to have to take our drawers at the end of the night and count out the cash and reconcile the charges come you know what you've come in and what's come out now if you didn't have if you were off by a penny this is I'm old school you had to recount your drawer because something was wrong and I don't care how little the amount is but this is something wrong and it it's a flag for me at least I don't care if it's like a couple thousand dollar here or there but the fact that this is actually happening is kind of embarrassing as just like this should not be this is the drawer is not balancing is what I'm saying so that's all I'm going to leave it at that I'd like to make sure that this is this is fixed and the drawer actually gets counted accurately at the end of the day but for now I'm going to leave it okay trusty Rel did you want to have questions oh sure great job thank you good job great job um we discussed the um going to a cashless um activities I think um trusty King talked about that but I know here on the board level we had talked about going to cashless in the district so for activities as well as Athletics correct correct correct and also um when it comes to contract I need help there's a draw down or something that's signed off for are we talk I'm sorry are we switching over to the Esser kind like the construction in general just in general when Contracting is going on there's a draw down where money's allocated I may be saying it wrong but I think you'll get it where money is allocated and every time they draw down on it someone signs off on it so you can see where the money is going is that accurate are we referring to Grants being drawn down no I don't know however however the money for let's just take our district okay money is allocated for each school for construction correct as funds are needed because things are subcontracted right we utilize this Clark Clark subcontracts different things to be completed when they are paid does Clark draw down off the money we've allocated or does the subcontractor or does all the payment come from Nathan Nathan did all the testing on that construction so I get to let him talk thank you um so the way I I think I understand what you're asking um so forgive me if I don't but um basically you're talking about the contractor um summary form where Clark is compiling the different subcontractors information M um as far as how they're they're certifying that yes these subcontractors did this work District go ahead and pay them um I guess as far as the grant side that's where the district then comes in and says okay we had this uh all of these contractors total this amount let's go ahead and draw that on our on our Esser Grant in this case okay so I'm not sure what are so do you follow that okay so well you you help me out because they're done separately sounds like yes so with Grant funds then the district is more so okay we received this we done this so draw down the money so there's a paper trail if you will from start to finish correct okay so that's what I all right and also just real quick just relates to the vehicle simple VIN number will definitely give the identification of the vehicle and the owner correct I believe so and that's where Miss Cleaves was having to request a duplicate of the title because they just couldn't locate it that could be done online I do know that I've done it so that's a real quick turnar around but in looking at the um looking at the either um status of a prior year comments I see the um progress but still situation that still exists the financial statement preparation controls so that's the disclaimer one that's the one that I I don't want you to panic about it but I have to disclaim that we could be considered a control and we can't be your control that makes sense okay what gets we have so much for title one we're real heavy with title one so when I saw when you mentioned the grant coding and is still existing but you said that it was great so help me understand because Grant coding is Major the grant code it's a it's a big deal in that we want to make sure we're coding our expenses to where they're approved in the grant because that's a really big thing at the state they want you to code it where it's approved the good piece is that nothing was charged that we could find that wasn't approved in the grant so there's no dollars that have to get paid back correct we just want management to to really work on making sure that that coding is accurate and to to give the administr administration team a pad on the back there are a lot of checks that run through the schools a lot so I don't want to discredit how many they did correctly we just happen to find some that weren't but it does need to be corrected I I think what would help is that we get the we get it monthly and we look at it so that way we can have more eyes on it so by the time you get here we could catch a little bit more so it so as it relates to the grants and um money being utilized if it's going to be utilized for Student Activity there's a Code so that Student Activity code should reflect and not something up because that throws it off when the coding is incorrect that's major and I know you're being very nice and I do appreciate that but with us being so heavily dependent on grants we we have zero to zero time for era so we definitely got to step up that but um I think what I'm looking at the other one that still exists am I am I reading this one right oh just the Student Activity funds yeah but I'm good with that thank you so much I learned a lot but you know I got to go back to the opic it it went up 20 28 28 million dollar so if you I just want to point out another page in your report that I think is good in the footnotes you're going to find probably oh goodness what 12 pages of information on that net pension liability no PEB liability we actually list those assumptions and all kinds of information that you really probably don't care about but on page 42 okay of the bound report this is a good quick at a glance recap for you of the net pension liability for the last 10 years so if you look at that bottom percent on page 42 going across for 2024 it says 65.9% that's telling you if you look at any other school district in the state of Michigan that participates with mypers every single school district is going to have this report and every single school district is gonna say 65.9 one% it's telling you that the state as a whole is 65.9 one% funded with the net pension liability and if you go back to 23 it was a 60% and 22 was 72% so it was even higher so that's where I'm telling you it is an estimate that's going to do this until until it doesn't exist anymore and then goad I'm sorry two pages further for page 44 mm that's the exact same schedule for the other post-employment benefits and you'll see the state as a whole is 105% funded that's where I'm saying they're overfunded but last year they were at 83 the year before they were at 87 the year before that they were at 59% what page is that 44 so I would not be the least bit surprised if next year we're underfunded again and have a liability that's that's just a major jump and I I I like you said it's guess work it is and I'm going to show you one more page okay I guess you can see my struggle in my I get it I do look at page 32 32 okay towards the bottom of page 32 you're going to see a little grid that has three sets of numbers okay that middle number $55 m688 N15 that is the district's portion of the net pension liability at June 30th 2024 what this grid is showing you is just how fluid this number is it's saying that that is your liability assuming a 6% discount rate you they're assuming you're going to get 6% rate of return on your Investments and that's your liability if your interest rate drops 1% down to 5% which is the one column to the left your liability goes from 55 million to 75 million if your interest rate goes up 1% from 6% to 7% it drops down to 39 million so this is just one other place to look to show you and point out just how much of an estimate it is because they have no way they don't have a crystal ball to tell us what our interest rates going to be in 10 years they're guessing all right all right thank you so much I appreciate it very good job thank you thank you thank you Ming Madam chair uh while we on um mepers um CCT me if I'm wrong that's dictated by state legislation with budgets per year after year yes um recently I know uh the senate had I mean what the Michigan legislature voted to lower U mypers for this year but it's depending on per year budget correct right so let's say we get a um let's say a governor or legislature that don't uh align or likes to cut education so we could see a MERS jump on our side if right if they choose to so for this next year they have I I don't want to misquote the percentages but they have reduced how much you have to pay in so what that means is you're going to pay in less so we're not going to continue to decrease that liability like we've been MH it's either going to slow down the decrease or it's going to go back up but the good news to you on your cash flow is you're going to pay in less each two every two weeks for this next school year yeah cool all right um my my sh with my real questions my question would be uh when did you conclude the audit report the physical onsite audit or the audit report you okay so the date of the audit report we cannot date the audit report until management approves it and takes ownership of it it's dated October 28th so that tells me that on or before October 28th management sent us that approval I believe we left the field in September end of September middle September yeah all right yes so the reason I was asking was um early you had mentioned for us to read the letter the document you know the two documents um I think it would be best practice I think going forward if we could get this beforehand before we finalize no before we have a presentation from you right so um I can be let's say for example I can read your letter understand what you're saying and then I can come prepared with questions based absolutely yeah so we do provide that in PDF format but I would be happy if I can get all of the and I might have all of the board members emails I would be happy when I send that to management to send that right to the board as well yeah I I mean I think that would be going forward best practice uh for me so I like to read beforehand so I make I'm understand like your letter so I can understand the foundation that you be laying with us here absolutely we can do that uh my next question would be I think it's some same lines of um what trusty McIntyre was saying with on the finding uh let me go back to your PowerPoint so in your PowerPoint you mentioned three findings in here but you're saying there's only actually one so with the single audit report this thin one yeah you'll notice that there's two different types of findings that are reported there's financial statement audit findings which is if we have a material weakness or significant deficiency in internal control we include it here so that's our disclaimer on the fact that we did have material proposed adjustments and the fact that that large unreconciled item was allowed to flow through cash so those two items because of the dollar amounts become material weaknesses or significant deficiencies so we disclose those as financial statement audit findings not single audit compliance finding so that's where I was just trying to differentiate for you but when you come back on page eight of the single audit report that's where it says findings and question cost for the medal for the major federal Awards programs audit so the actual compliance audit over your federal funds had one compliance finding and that was the Davis bacon prevailing wages got you so technically overall does that help kind of deern it so I want to make sure I I hear you right so I clear articulate we only have actually one finding that we have to report to the federal government one all three go to the federal government but only one pertains to your federal funding gotcha okay cool um my follow-up question would be to S three Mr Jones who was um designated to do the payroll weekly um here for the district regular yes know the person's name no what I mean is was it one of our employees was it Clark so who do we designate to um we don't do do the certified payrolls you're saying certified payroll yeah who who did we designate to do that you talking about in our business office yes yes yes we have a person that does payroll in our business office and that to requests from the vendors to send payroll they they review that as well are you talking about the construction yeah I'm particularly talking about uming pay we don't pay the uh we we don't pay those individuals that work for yeah the construction company we we pay the uh Construction Company got you so you're saying we we designated car I don't know the name of their employees you get what I'm saying got no I'm saying okay so Clark Construction basically was supposed to review weekly is that what I'm understanding well I'm I'm going to I'm going to speak of it this way uh we we are to have oversight M um when you designate uh a company or you designate someone on your staff to have oversight over what's happening those are things and in our opinion that like she said it's the district's responsibility so at the end of day it's our responsibility but the district still designated we did absolutely absolutely designated someone to have oversight over that the oversight was just like got you all right I just want to make sure I'm understand um so who will be going for who will be looking at who will be doing oversight well um we'll we'll have conversations about that we so that was that was taken care of of um but in oversight we would be looking at that our business office to make sure we have a weekly meeting with Clark Construction we have a weekly meeting to make sure that all things are happening the proper way cool all right um my next question would be about uh the Student Activity fund I remember last year we had talked about U Mr Jones more directly towards you we had talked about um having a plan with principal with everyone um all of our principles being centralized about what do we do with Student Activities funds like how do we um collect funds we was going to be on the whole system together not everyone doing their own separate thing has that been um place when so when Miss CLE when they're finish and Miss CS comes up we we'll discuss that in her so she has another presentation on top of this too budget amendment okay I maybe I didn't okay my bad I I apologize all right um that be it for me thanks oh wait thank you thank you for the detailed um work um that you put in this is good to me I I enjoy that you come every year that I look I look forward to detail reports and that you know thank you that you're doing the right thing and I Mak sure that we are too uh but I appreciate it thanks thank you Senor thanks I just want to just make comments you have done a marvelous job from day one when we brought you on about a couple of years ago we had issue with vehicles and you remember when you first came on and I can see that this district has worked very hard and bring it to where we was at and to where you have gotten us working with it and I just want to thank the administration on the team for getting us where we at with any auditor you're going to have findings you're not going to have a perfect but a perfect audit I would say would be one of these type of audit because we just had some findings some issue but coming where we was at and where we at now I want to commend you uh doing a fantastic job and in the past I would like to have those PD files because I always have gotten them from the previous when I first came on gotten that information it does help seeing that there's no more further questions or comment thank you Miss Scott thank you we'll make sure we get those to you in advance next year and if you do have questions that we didn't get to reach out and send normally it would go to the ex administrator and they just Ure that we get them all out to everybody okay thank you thank you very much thank you thank you have a good night thank you too now we're moving to our budget amendment I would like to ask Miss C to join us for the budget amendment yes proce Miss C can you explain the process we're currently using for the student accounts so currently we're working on getting a centralized one form that shows all of the fundraisers so we'll know okay on this dat a fundraiser was held and we're able to know when we can collect the money so currently right now is buildings are bringing over their fundra in forms with the money so we're just working on knowing ahead of time what fundraisers you're having at the buildings and have we gone to the uh paperless entry for athletics we are using Goan still accepting cash though um it was like a pilot to see how well um Gan is working and didn't want to be able to turn someone away because they're not able to use Gans so it was decision made to still accept cash so we're not totally cashless with the athletic events but we are using Gan the plan is to moving forward a after this pilot is to do what eventually just go paperless I mean cashless I'm sorry with the Gan and then for um fundraising being able to also accept another means besides just cash okay I just wanted to address it okay see you miss I'm just going to wait for the presentation to be loaded [Music] what's the issue you found it oh okay [Music] so this is um the corly report one along with the budget Amendment the purpose of the corly report as previous been stated is just to provide the school board um an update about the share Business Services collaboration with the Gen ISD we're going to talk about the status of the 2425 budget and then recommendations for long-term fiscal stability as well as on the agenda tonight is to talk about the 2324 audit the budget amendment one and then recommendations so as previously just mentioned by the Auditors we had um finding number one and it talks about um the financial information and that um various entries material to the financial statements were proposed by the external Auditors so the solution to avoid this going forward is I will make sure as the finance director that entries cannot be made to the previous year once the year has been closed so what we had happened was once the information was sent to the Auditors we did have adjustments being made in the previous year so I'm going to make sure all the documents that have been submitted to the Auditors are the accurate documents and then that they cannot make changes in previous years the second finding was about bank reconciliations so back in June I think it was June of 2022 an adjustment was made to cash and it was an adjustment that should not have been made to cash so this happened in the year 2022 um going forward I will make sure that the bank reconciliations I review by myself it was allowed in the finance system up until it was caught at this previous audit um by doing this it'll allow for timely adjustments in the finance system of any reconciling item so basically for the last couple years cash have been overstated due to this entry being made in 2022 can break it down into so there was actually um an account that was hit in air and it was cash and it should have been the revenue account so really Revenue should have been an entry that was made back in 2022 but actually the cash account was hit so it was a coding issue back in 2022 so is this something that got through the audit like so it was got through the 2022 audit the 2023 audit and that's when Cindy just previously spoke about a prior year adjustment had to be made and that's what it was the adjustment that was made to cash so we had to go back and adjust back to 2022 a question how much was adjusted it was $540,000 but explain what adjustment means that that money is not just gone somewhere right so what happened was in 2022 and it was adjustment made to increase cash by that amount so now we had to decrease cash by that amount because it should have never hit that account proceed so the 2022 had to be restated the 2022 year numbers had to be restated I think we lose money we lose any we had to restate the fund balance by that amount you didn't have to pay it you just had to correct it corre yeah okay yep it just had to be corrected it was the wrong number that was used in 2022 did that money go somewhere did did did the money come out of our account and could be the money is still in the bank the money that's in the bank is correct okay we had to restate the board is concerned about theft so I need you to I need you it's not fraud or anything like that there was a uh entry that was made that shouldn't have been so the money back in 2022 had to be restated that year a truste I just just can I get this so you have to the money the 540,000 was put into the wrong account one year so we had to subtract it from another account the following year is that what we are so we had to restate it back to 20122 so basically your fund balance from 2022 was an incorrect number what does restate mean it means that we stated the fund balance an additional 540,000 we had to go back and make an adjustment to decrease it by 540 for 2022 year so that means we okay so so I just want to get this straight so we had to start the following year off minus the 540 to even out is that what we are so we had to so last year it was stated wrong also so we had to go back and it's called a prior year adjustment we had to go back and restate what our fund balance was at 2022 okay so is it money that it it's so the money's just sitting there it's just how it was stated and reported correct okay so money ain't never been hasn't never been touched it it hasn't gone anywhere but it it was stated in the documentation the wrong way correct by a previous whoever worked with it at that time remember 2022 uh board just remember 2022 we had help from some a guy down okay I know you know I ain't got it I got a question so in 2022 we had a million five we in our fund balance we reported a million5 in 2020 we've been carrying a million5 but in actuality it's just a million so in 2022 we had a million five that a million five stayed there to 2023 now the audit shows we need to go back to 2022 and deduct $540,000 I'm looking at as we spent money we didn't have because the balance showed additional $540,000 so I'm looking at in 2022 we thought we had a budget of 1.5 when in fact we only had a million dollar budget in in 2023 we still we only we thought we had a million5 but we only have a million so now you got to go back from 2024 all the way back up to 2022 deduct 540,000 2023 deduct 540,000 correct because both of them were misstated by that amount but we so so your beginning balance was wrong for two years so you have to restate what your beginning balance was with that being said we were using incorrect numbers so we actually potentially could have went over budget of over a million doll over a million dollars if you had exceeded your fund balance and we're in a defit we're projected to be in the deficit outside of exra funds correct okay I'm I'm good thank you I don't know if anybody else is but iead so so you're talking about exceeding the fund balance right so our fund balance has been how much over the last two years from what to what so for um let me check I think I had an audit whatever uh so we had I have to see what the fund balance was for 2022 where you ended at for your fund balance but for 2023 your fund balance was 50 million right $50 million so whoever at that time was dealing with our fund balance overstated it by $500,000 correct right okay so we have $50 million in our fund balance so basic basically 50 50 million $500,000 was the overstatement so it should have been 50 million dollar right correct so that money is not spent that money is not spent because it was overstated you got to go back and make sure it's stated correctly correct correct okay so which means we our current you're about to talk about our current fund Ballance so it was at that time our fund balance in 22 was not $50 million it was less than that correct okay so this was stated wrong and we had to go back and correct the statement correct so it's stated right correct we're making it sound like oh this is just a misstatement and it's been rectified but this is back in 2022 when I was removed as Treasurer and we did not have a Treasurer and we had a president who is acting as both Treasurer and president and I am concerned I get it technically that oh it's a you know here's a coding error a line again the drawer is not balancing and this is not okay I don't care if it's oh that's not the money is not spent and this and that we need a forensic audit and I've been calling for this since I got on the school board this is insane to me and I am really worried and I have publicly stated back when the previous president announced herself both president and Treasurer we had no Financial oversight in terms of board oversight and we had a mess going on with our financial department so I know people are sitting here at this table going oh don't say that out loud don't bring it up in a meeting let's kind of you know it's everything's cool but it's not I I I can't even pretend to understand because from day one when I was put on his treasure I have been asking and begging and pleading and demanding statements that were never forthcoming and never showed up and now we finally are getting somewhere and thank God we've got somebody competent and we can try to rightsize the ship but I'm not sure what the heck has happened over the past four years to be honest and what kind of damage has been done to the hall of this ship you know um I'm worried um I mean obviously we're going to do the best we can moving forward but this is a concern and I want us to make sure that this never happens again on this board that we follow protocols and rules and procedures and you know we have the utmost trans ercy so I'm going to pause my comments pause um because I'm gonna go back dig up all my notes look through all this again and you can bet I'm gonna have questions at the next meeting just I I think it's uh my mic good I I think it's important uh that let me go back back to you know I ask my colleagues that you know the words that we use and say over the mic could potentially cause some friction that's kind of unnecessary in my opinion uh I'm hearing your report I'm hearing what you're saying and I and I think it's there's a miscommunication because you you know you're director Finance you went to school of Finance right some of us didn't go you know we didn't go to school for finance and I think it's probably important for us to walk us through exactly like you know step by step how that could happen uh because to us right like rightfully so um we don't have Finance degrees and background right uh you know proceed proceed all right yeah we don't have I I don't have a finance degree okay um so I don't work in you know School Finance you do but I think it's important for us to be able to you to walk us through line by line basically how that could have happened you're saying it's just a erir code it was charged it was it was a cash versus expense what is that again so if you can recall back in 2022 the Auditors had to assist in closing the books because the books weren't even closed so this was that year yeah where an entry was made to cash and it should have been actually made to your Revenue got like we never should be making entries to cash okay everything is made through revenue and expense accounts I think think probably later on could you just give us like a short little thing walk us through CPA you know director Finance kind of language and explain that out step by step but I think it's important um that we do not show um so a kind of distrust and what's going on because you know what happened in the past we all can remember the past and dysfunction but we currently we talking about the present and yes that may have happened two years ago you know you've been here for a year now right yeah so hopefully you know we built that trust relationship so you can explain that out to us um but also I want to bring up a point about the treasurer don't don't come to you and withdraw a check do they the board Treasurer don't come and ask for checks right so the board treasur don't come in your office and tell you what to pay for and what not to pay for right okay so I I only bring that point up because it's this this idea that the treasur is supposed to lawed over you that that's not that's not how that works right the treasure you know works with you to make sure that we understanding Finance appropriately we all understand as a board together it's not more so if somebody did something wrong a lack of oversight um I just want us to get from the the past kind of tension that something is always wrong if you I think the miscommunication is your language is different than ours and all you got to do is explain that language a little more different differently to us um I I would take us back to kinderg B kindergarten or bachelor's degree you know Finance 101 with us because we don't understand that language that's I think the barrier is but by that barrier what I'm seeing is M trust being sold right because you can just say we missing money but you're saying hey an account thing this is how it looks it's a whole different different thing that I'm saying okay um I just I just want my board my colleagues to be careful about the what we say and how we say it right cuz the the unintended you know the subliminals that we you know we give out people start thinking oh was something going on financially something going on wrong no we've been fine right there's the audit doesn't always be perfect right there's things that we have to correct but no district is perfect we're doing we're riding the ship ever since 20 you know since we got on this board of education right like we joined this board of education we've been moving in the right direction okay I I just I just want us to be careful about what what kind of uh message that we give out because to me that's important that's important thanks yeah I just want to say uh first thank you Miss GLE and I know we're not finished here yet but we don't tell the Auditors what to audit uh we don't tell the Auditors what to tell you what we are to do is manage the books to the best of our abilities and make sure that we are following board policy in that work um I can have a teacher that teach a lesson wrong right but I can miss that lesson that she taught wrong it doesn't mean that everything she's teaching is all messed up so I want to be clear that this this Administration this team that we have currently is watching our books and we've been doing so that's why the auditor is giving you the information and saying I want to make sure you understand that this team is doing the job so I wanted to be clear that um and we have done audits forensic audits in this District um when I was first came on it was one going on but I want to be clear that the auditor is there to do the auditor's job we don't tell them what to audit we don't hide anything from an auditor we give them complete uh autonomy and control over whatever they ask for as a matter of fact we don't always know what they're coming to ask for so it is our job to manage and make sure that we're listening to the auditor and getting the suggestions from the auditor but also doing this right here which is coming up with solutions to issues now I want to be clear that the auditor just spoke about that she's been checking things over the last couple years and she has found that those things have had Solutions so that means that we are doing the job it doesn't mean that every single thing is going to be perfect it's not going to be perfect but we are doing the job and making sure that when we find something out we find a solution for it so I I don't want it to I don't want to leave this out here like the district is we have money just sitting over in Corners we do not she's showing us that we have measures in place and Miss cleeves is currently going over the solutions for what was just told to us in the audit so I just wanted to make sure for president I was able to clarify that I appreciate truste Perkins I just wanted to say that board president just said that you're not going to get a perfect audit but I'm going to commend Miss cleav because she told us where the problem was there is a correction put in place I wasn't on the board at the time that the previous president was here that was holding two different positions which I thought was crazy but that was then this is now we're all board certified we're all working together and I think the transparency that miss cev is showing is spot on that's all I got thank you Miss C could you proceed and I just kind of briefly wanted to talk talk about um the previous audit and the two findings that were on that audit um I know the auditor just stated that they've been corrected but it's going to be more information coming forthcoming so it was a finding for the meal claims and it was question costs in excess totaling $295,900 so mde did come out and do a food service review and they actually let me know that there was was an understatement there was not an overstatement so they would not be recapturing any funds from us and so they will be putting together a report and then I will make sure that gets shared out with you guys how much was understated the unfortunate thing is we're not able to claim the overstatement but we don't have to pay back what was put in the audit so so I want to be clear that the finding that you did have was not a finding at all we were not overstated by $20 some odd, thousand it should have been shown that we did not um we did not overspend we underspent I just want to make sure that's clear okay and then the other one was on eser one and it was question cost in the amount of 345,000 the question costs on that one um don't exist as far as us having to repay back money for that so I just wanted to make sure that you guys knew about that just push the button Stephen please thank you okay then the third finding was about the certified payrolls that were um there was a contract in our contract it says that Davis bacon prevailing wages must be paid however they were not paid for a particular vendor and the solution for that is in the future making sure that these all certified payrolls will be reviewed by the construction team prior to us issuing a payment so unfortunately that was not happening and that's why um um we ended up with this finding okay Madam chair I just got a quick question what she just talked about she just spoke what are you doing you you are having what did you what are you putting in place in regards to finding three you guys are what's going on to make sure the construction team is reviewing those certified payrolls to make sure that the wages that we're saying need to be paid in the contract are the wages actually being paid that's my weekly meeting okay all right so prior to a draw down you all get to see it yes and and sign off on it yes okay so you are you going to be the one signing off on it or superintendent superintendent will be signing off but you'll be looking over your shoulder yes okay thank you AB so when and why do we recom recommend budget amendments so it's definitely a best practice for school finance that a budget is amended and it's based on the audited financial statement and any updated information that is received that was an estimated in the initial budget budget amendments also help to ensure fiscal management and transparency by addressing the variances in a timely fashion and timely budget amendments help to inform short and long-term decisions based on the most accurate information available so the initial budget that was presented back in June Revenue was estimated to be 77.1 million expenditures 87.1 million which would be a decrease of our fund balance by $10 million the key Fair before I talk about the numbers for the budget amendment one the key variables that impacted this budget amendment was our audited fund balance is 57 m684 1225 this actually was a increase from the initial budget so initially what happened is we had funds that we didn't spend in the previous year that actually got rolled over into our fund balance so that's why there was a change in the fund balance amount so you always want to make sure that you're reporting the correct audited fund balance in your amendments the budget was based on 2700 Scholars as of count date it was 2,500 81 Scholars so that will also be reflected in budget amendment one and this decrease of 291 Scholars is actually the difference of what we've been paid from our previous fall count also making sure that our grant revenue is neutral and what that means is making sure since those are restricted funds if we have Grant Revenue they equal the grant expenses also $7 million was allocated from the general fund fund balance for construction projects the board approved for 8 million so that additional 1 million is still sitting in fund balance but the 7 million has actually been budgeted and is reflected in the expenditures column and then just a reminder that Esser funding ended 9:30 2024 so for the numbers for the budget amendment one revenue is estimated to be 84.4 million expenditures 101 million which will be a decrease from our fund balance of 16.8 million go back please explain the 6.8 so that's 6.8 is the um $7 million that was you is being used for construction projects that was approved by the board so that's a one time that's that's a one time cost you will not see that year after year that's a one-time allocation so that's a one time which is not a reoccurring it's not operational it's not your operational deficit so recommendations internal best practices is to make sure that there's Grant oversight making sure we're directly charging grants and then we're having timely reporting and recommending the Amendments cash management and deposit procedures making sure those are in place and being followed um the systems policies and procedures are the partnership goal number three and actually that kind of speaks to for Student Activity accounts and fundraising making sure those policies are being followed um an expanded use of the finance system to increase accuracy and efficiency and continuous training making sure people are trained on how to use the finance system because then that helps with any coding issues as well so key variables that will impact future amendments So currently we're in negotiations with all three bargaining units so we don't have the final contracts for those once we get those then Amendment will have to be done to actually reflect that also that um the audit of previous previously mentioned retirement cost that percentage will be decreasing it's roughly at about 177% and it'll be decreasing to 10 so we will be showing a decrease in expenses for retirement the state also sends us payments to help with those expenses so since that decrease in percentage it will be a decrease in revenue for retirement and then we're just awaiting Grant applications to be approved and this will increase the funding to the district so what's not in this budget amendment is any grants that we're currently waiting approval which will be title all of the titles one two three and four once we get approval I can put those in the amendment and that'll show an increase in funding to the district long-term recommendations we have to right siize the operational budget especially to account for the elimination of Esser funding District facilities will need to be better aligned with enrollment realities and then fewer school buildings can help ensure that Scholars have high quality instruction with more efficient Staffing practices the next quarterly report will be in February of 2025 anyone have any questions oh miss please I just wanted to see um I just want us to go long-term recommendations so under operational budget must be right sized what does that look like U from administrative FL so that actually means that right now we are spending more money than we are receiving so making sure that we are either balancing that out to spend to the amount that we're actually receiving or spending less so what's the plan to uh do uh right si side that so right now I know we have a few meetings coming up um to discuss what what that will look like as far as right sizing the district gotcha okay okay so when when you speak of the operational side of that so what does it look like for us to get that $1 million deficit down we Retreat discuss you know um some of the restructuring that's already being done with positions that's doing that for the LA for the last two to three years you all been on the board together we've been Str restructuring that we still have work to do however we still have work to do in the space of buildings um which you've already started consolidation but we're we're just going to have to get together and make those decisions the board has to make those decisions uh with our recommendations coming forward got you um I just want to make short the district facilities would need to better align with enrollment realities what does that look like to you for um as far as making sure that we are looking at um are do we have the right staff in front of the right amount of students so teach uh student to staff ratio yes got you uh fewer school buildings I mean that that looks straight like what we're currently doing yes what does that look like to you I just want to make sure I hear from you so I know we've already started the process um and forthcoming I want to make sure that you're actually seeing what it looks like when these buildings are closing and as far as cost what what savings are there when these buildings are being closed um so right now I think we just got to make sure we move forward in closing according to the plan gotcha so going forward let's say we plan out we we got the forward as scheduled do you is there a tremendous savings let's say can you project that out like you know if we don't have these keep the same enrollment numbers minus the four buildings that we slated to repurpose is there a projected def can you project it out or you you that's too many variables to not oh no it's really not too too many unknown but I can provide that a future meeting for you like could estimated what that would look like for the fun bot okay yes thank you I appreciate it that's it for me mam Sher yes hi Miss Cleaves hello it's not going to be it's not going to be bad you got a tough job um I would like for the 7 million to go back to the general funds because our student population is so low and with the way everything is going we don't know and I believe in saving for a rainy day and I've seen individuals start construction or Renovations and they run out of money and normally when they run out of money they just stop because they don't have the money unless they go and grab money that they really don't have and use it and then they find their self in deeper debt I'm going somewhere with this I would ask you as the financial person of this District to be able to say we can't go any further because what I would like is for certified teachers to be in front of our students that's going to cost more money to the district I would be very very ecstatic and probably the first one on the voting team to vote for a 25% increase in teacher salaries because you can't put a price on education but you can't put a price on the building so I would ask that as the um Finance Guru Guru of this District that the students the priority of the students be way up there when it comes to buildings and Renovations because if we can move $7 million for renovations we can move 7 $7 million to pay for certified teachers I just don't want the buildings to come before the students so when we're looking at these numbers and all this I didn't see much where the students were benefiting who cares about a beautiful building when you don't have what you need inside of it so I am strongly urging and asking for more student Focus because to have a parent come and say something to us today that lets me know that the right money is the money is not being put in the right place when you put a person in place that cares that's certified that has worked to get in a position sometimes they'll do it for free or less money but those that haven't had to work they won't do anything at all to resolve it so I'm just asking that our financial look go towards bettering the students when you take care of the students money will come instead of us going in debt I just see us going the opposite way of where we should go but other than that I thank you for um finding money that we didn't know we didn't have but it goes back to and I and I don't I think you were here I don't know if you have been here yet but we had two Mr Jones at one time and I believe he's he's a more seasoned gentleman than Mr Jones who's currently at the table it's my way of not calling him old but he highlighted I want to say $230,000 that was drawn down on that we couldn't account for so when I saw this 540 $540,000 adjustment that kind of put a knot in my stomach because we don't know know what we don't know and if you don't address something it'll come back and bite you and I don't think we could take another bite so I thank you for just acknowledging the hemorr so we could stop it but when we when when I hear quarter of a million dollars and then a half a million dollars within a little over 14 months that's concerning so I that's why I'm like let's pull in the rings on this money so we can have some money thank you got that out thank you m thank you I now call upon superintendent John to present action items to the board yes I seek a motion and a second from the board to approve action item 11.15 budget amendment Madam chair yes I make a motion to approve 11.15 support move what's on support oh it been promptly moved at second is there any discussion stand no farther discussion motion to approve item action item 11.15 budget amendment will be conducted by roll call board members I call your name could you please say yes for the records secretary Perkins yes trustee McIntyre vice president clack yes trustee reliford yes trustee King yes treaser Looney abson trustee McIntyre yes and myself yes six yes one ABS I seek a motion and a second from the board to approve resolution 1.15 Personnel recommendations Madam chair yes make a motion to approve uh item 1.15 support it been proper moving second is there any discussion seeing no further discussion the motion to approve resolution 1.15 Personnel recommendation will be conducted by a roll call vote board members I call your name could you please say yes to approve this motion secretary Perkins yes truste McIntyre yes vice president clack yes trustee reliford yes trustee King yes TR treasure lone abson and myself president magneir six yes one absent I seek a motion and a second from the board to approve resolution 1.16 authorization to approve Health Care Services contract agreements Madam chair trusty K can I just make a batch yeah okay um I move to batch item 1.16 and 25.10 I'll support that there a motion on the floor to batch 1.16 and 25.10 is there's a second I supported it it been proper moving second is there any discussions see there's no discussion the motion to badge 1.16 and 25110 one0 will be conducted by roll call vote board members I call your name could you please say yes to accept the motion to badge secondary Perkins yes truste McIntyre no president CL yes truste rord yes treas K trusty King yes treas Luna is absent and myself as a yes Madam chair yes I make a motion to approve the batch items support there's a motion to approve the batch item and second and support it is there any discussions seeing no discussion they appr it to accept the two batch that we just voted for by roll call vote secretary Perkins yes trusty McIntyre yes vice president clack yes trusty reler yes truste King yes treaser alone is AB myself is a it's a yes six yes one ABS continue while we did academic I think we finished hold on yeah hold on hold on one second board members in your package vartech monthly update for October do any board member have any questions see no no question do any board member have any comments remarks before we are join seeing no comments I just wanted to have a moment of silence for Mariel D was that he was the 16y old at Southwestern that passed away and his memorial services at Southwestern on Friday at 10 o' 3:30 excuse me 3:30 what's the name again Mariel you said memorial service he's having you saying outside of out well Mr O is letting them have one for the children yeah I just want at the gym yeah we're not having a service no no no not here at the southwestern at 3:30 Friday okay moment okay thank you the Board of Education will hold its next meeting on Wednesday December the 18 at 6:30 p.m. here at accelerated learning the time is 8:46 I declare this meeting adj joed