Okay, I think it's nine o'clock. Let's go ahead and get the meeting started. Good morning everyone. It's nice to see you all and welcome to the last meeting of this year. Uh we'll start out Joyce if you would with a roll call.
Dave Thally >> here. Mark Baster, Alyssa Davin, Michael Dixon, Darina Berman here. Okay. Leandre Camel
>> here. >> Frank Barbie. >> We have Quarum. >> Okay. As we always do, we'll do introductions and start down at the end with Patricia. >> Good morning. Patricia Morales from the Office of General Counsel. Good morning,
Gloria Branch. School board member >> Oscar Strepo ID's office. >> Let's go to the back. >> Okay, now Randy >> Randy Lo IG's office. >> Tracy Shear, IG's office. >> Dave Tally, audit committee.
>> Theresa Michael, Inspector General. >> Carrie High Council to the Inspector General. Joyce Edison, Inspector General Office. >> Christina Daniels, Inspector General's Office. >> Michael Dixon, uh, audit committee. Good morning, everyone.
>> Darina Bowererman, audit committee. >> Leandre Campbell, audit committee. >> Brett Freeman, RSM. >> Chantel Nolles, RSM. >> Okay. in the back. Introduction.
>> We've got a quorum. Uh want need approval of the agenda. Are there any additions or deletions to the agenda? Terry? >> No, there's not. >> Okay. I'll accept a motion to approve the agenda. >> Second. >> Discussion. All in favor? All oppose?
Pass unanimously. Take a minute if you will and review the minutes of the October 17th meeting. And after you've had a chance to review that, I'll accept a motion to approve. DeAndre offer a motion to approve the minutes as presented. >> Second. Okay. Passed. Uh public comments.
Oh, just wanted to point out that uh Heather joined us. So, nice to have you with us. Okay, Terry, we'll go ahead and go to the IG update. >> All right, I'm going to keep this very short because we don't want to spread the Ebola that I think I have gotten
from my family for Thanksgiving, all those little kids. >> Um, >> I've got a cold that is not going away and I'm I'm dramatic, so it it I' I've raised it up to Ebola. Um um but I I do want to thank everybody
for being here today. I also want to thank um my staff for the very hard um year. They've really put a lot of effort into the work that we've done. Um nobody ever really thanks the IG's office for showing up or for any of our reports. Um
and I understand that and they understand that as well. Um but they do keep a good positive attitude and I do appreciate that. um all of their hard work and I appreciate the support of the audit committee um and the board as well. Um it's not easy to to be the
bearer of bad news. Um but you know it's not I'm not usually the target when I bring those bad news. It's usually the the issues at hand and I do appreciate that. So with that being said, I think um continue on with the agenda. Uh but I
do want to wish everybody a happy holidays if I don't have a chance to say that before we end. Okay, we'll move right along the RSM presentation. Brett and Chantel. Uh, good morning everybody. Again, happy holidays. Our pleasure to be here. Uh,
if we could start out on page four, this is the audit results, a report to the audit committee and to the school board. Also, the other large document you have is the annual comprehensive financial report that's prepared by finance. First thing I want to highlight is that uh,
you know, this year went very smoothly. Just want to compliment finance and their team for being very responsive. They had both us as well as the audit general here harassing them as well as their normal day job, but they were very responsive. Also, I want to give credit because uh Shantel to my left, she's going to go over the highlights. She's
really the one that runs the whole show and makes it go smooth. So, between her and the finance team had a very smooth audit issued on time, no problems. I'm just going to walk through here. This executive summary again, we completed the audit for the year ended June 30th, 2025. Also, we performed a compliance
audit in accordance with section 218415 Florida statutes as far as investment of public funds. And we're happy to report we're issuing an unmodified opinion on both. That is the highest opinion we can give telling you that things are fairly presented in accordance with generally accepted accounting principles and with
Gazby standards. Next area just want to highlight that there were no significant changes to the planned audit strategy or significant risks identified subsequent to the communication at the beginning. One of the things we did highlight is when we started there were two new gazsbies because you know Gazsby always like likes to put new standards out to
keep you know the finance and accounting people busy and so there were two new ones and you know the district went through and evaluated each one. Gazby 101 we'll talk about a little later but 102 we initially put that as a potential risk because we didn't know how significant the impact would be or not but the district evaluated it there was
no significant impact so that risk went away. As far as the new accounting policies, Gazsby 101, what it was designed to do is to try and make things consistent with how all governments report their leave time because in the past there was some varying application of the old standards as far as how it
was applied. Just to keep it short, the concept got to this idea of is it more likely than not that the time is going to be used? Whereas in the past there were a lot of other calculations. This one went to this theory of what's more likely than not. and you were you kind of go back historically look at your
history and your data and then apply forward and the district what they did which was smart and others had done is they also considered well the co window was a little different so they looked at the data outside that window as well as the whole period um now as part of that you will notice there was a uh you know
a restatement just want to point that out restatements normally is a bad word in our world where you don't want to hear it but when you're adopting a new accounting standard that's just a required process like if you have a material adjustment you will have a restatement of the opening balance and that is exactly what they had in this case. So it's not at all that they did
anything wrong. It's just the new accounting standard as we said changed how you calculate the liability and by determining a change in how it's calculated. It ended up restating the opening balance. During the audit we did not have any audit adjustments. I think that's important for the committee to know and
for the board because it should give you confidence in the unodituded financials that you get from finance staff throughout the year because we put them through a lot. We looked at a lot of samples, a lot of testing. We didn't have any audit adjustments which meant that we didn't find anything that was quantitatively and qualitatively
significant and material to the financials where we felt they needed to be adjusted. We did have some uncorrected misstatements. Those are items where we'll find things and if it's not 100% right, maybe timing or whatever, you know, but we evaluate it and if it's not quantitatively and
qualitatively important, we just say, "Okay, we're just going to report it to you so you're aware." But same thing a lot of times management will see those things and if they're not material they're not going to go back and revise prior statements for it. Next part and also important is we did not identify any significant
deficiencies or material weaknesses in the internal control structure. You know the audit is not audit of internal controls but as part of our testing we do look at and test and we found no areas of concern. On this next page here's the required communications. Most important thing there is usually you
want to kind of have everything in that no column. As you could see there, everything was no as far as you know no manage to report, no major changes in the scope. We didn't find any policies where management is trying to manipulate adjust numbers by using you know policies that are maybe not industry
norm. Again, no significant accounting policies that lack proper guidance. No significant unusual transactions. The only thing in the yes column again it's just that new st new standard and that's just a requirement of Gazsby. Now one of the things we like to do for the committee and you know for the
public is a lot of the activity of the district is either cash that comes in or goes out. So a lot of that is just track but where really management gets involved and there's a potential for override as we get into your significant county estimates. So I'm going to turn it over to Shantel to kind of briefly walk you through each estimate and how
we address this. >> Thanks Brett. Um, as Brett noticed, the next few slides includes all the significant accounting estimates that the district has. However, I'm really just going to touch on a few of them. Um, to make note of those. So, starting with that, I'm going to touch on the
self- insurance. So, the district is self-insured for general and automobile liability insurance, workers compensation, and health insurance. For that, to determine that estimate, the district hires an external actuary to help them develop that estimate. management along with the actuary
reviews the various assumptions that are utilized in that report to develop the liability. For that we audit the underlying data that's sent to the actuary and we also send that report to our own internal actuarial specialists to help assist us in reviewing those assumptions to make sure that those are
reasonable. We then concluded that the resulting estimate is reasonable. The next estimate the district provides post-employment benefits other than pension to its employees. For that estimate, the district also hires an external actuary to help them develop
the um that estimate. For that, we we audited the underlying data which consists of census data. We also sent that report to our external special our internal actuarial specialists to review the assumptions applied by the actuary
and as part of the result of reviewing that estimate, we determined that that was reasonable as well. The next estimate I'll touch on is the district is part of the Florida retirement system which is a cost sharing pension allocation plan. That plan is um audited by the Florida
Auditor General and the actuary is also hired by the Florida Auditor General. We then obtain those actuarial evaluation reports and we send those reports to our internal specialists as well. As part of their review, they determine and they review the assumptions that were applied
by the F FRS actuaries and they determined that those assumptions utilized were reasonable. We also audit the underlying data from the district which consists of their contributions to the plan to make sure that all the contributions are in accordance with what type of FRS class that the employee
is with the district. And the last estimate I'm going to touch on is compensated absences. As Brett mentioned, this is a new um this is a new implementation this year for the district and they determined whether the extent that it's more likely or not that a leave will be used as time off. When
the district reviewed the various leave types that they have, they determined that the only leave that required a change in their methodology was related to sick leave. And as Brett mentioned previously, they did go back and tried to do as far back as they could to determine the um the average usage for
sick leave and they went back through fiscal 22 and 25 just because of COVID. However, they did go prior to CO as well for I think starting from fiscal 18 just to make sure that that information was as consistent with the time period of fiscal 22 through 25. So as part of that
um estimate, we also reviewed the underlying data. We reviewed management's methodology that applied and we then concluded that the resulting estimate was reasonable. Um for this this is just showing any type of departure from our um our
regular audit opinion and that departure just consisted of the emphasis of matter which related to the implementation of Gatsby 101 for the restatement of beginning net position which I think was approximately 17 million. Um, as Brett mentioned, there were no
audit adjustments to the original trial balance. And as noted on this next slide, this shows the uncorrected misstatements in regards to uncorrected misstatements, there was really just one current period which related to pension contributions subsequent to the measurement date. And this really just
resulted because by the time the district the FRS plan provides an estimate that the district can then determine what those contributions are that would then show up in the Gazsby 68 report that's provided by the FRS plan. By the time that information is provided
um in order for the district to prepare their financials timely I think it time they provided the information timely um the district had already estimated what those contributions were. So we then determined that along with management
that that adjustment of 3.5 million was inconsidered material and then all of the adjustments on the left side relate to prior period uncorrected misstatements and we're just required to show what the impact on the current year financial statements would are.
Um observations about the audit process. No significant issues arriving from the audit um were discussed. No disagreements with management. We didn't encounter any significant difficulties in dealing with management. We're not aware of any consultations management had with other accountants about
accounting or auditing matters. And we didn't encounter any difficult or contentious matter that required consultation outside of our engagement team. Um for the audit, we're required to be independent in for in regards to AICPA and the government accountability
office. Um we include several appendices. The first appendix relates to significant written communications between management which basically consists of the representation that's provided by the district to us in regards to the
financial statements. So the first one that's the pretty lengthy representations. This also includes the past adjustments. This is related to the finan the financial statement audit and the second management representation relates to our examination of compliance with Florida
statute for investment policies. The appendix B is our report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with government auditing standards. As part of the um as the
results of our audit, as Brett mentioned previously, we had no internal control deficiencies, no significant deficiencies, no material weaknesses, and our audit results also did not disclose any instances of non-compliance that are required to be reported under
government auditing standards. The last appendix includes any recent accounting pronouncements that have been issued, but they're not yet effective. management still determine what the future impact is going to be on the financial statements. And we just included the most significant um Gazsby
statements that are upcoming that the district is currently evaluating. And with that, I just also wanted to thank Heather and her team. Um as Brett mentioned, it was a very smooth audit process this year and they spent many hours helping us to try to get all of the information and requests that were
needed to make sure that we got everything issued before the holidays. So, I just wanted to give a thank you to our team. And with that, I'll turn it over if there's any questions. >> Okay. Any questions or comments of the uh committee members? >> Question. >> Um, you mentioned that there's no
significant deficiencies or material weaknesses. Did you note any control matters that didn't elevate to the level of significant deficiency or material weaknesses? No. >> Thank you. >> Any other? >> Oh, oh, sorry. And then one thing I also
wanted to mention is in regards to the single audit report that is being performed by the Florida Auditor General this year, which is why it's not included with this report. So I assume that'll be presented maybe in March at some point. >> And then just one more thing I'll add to is you know the the finance staff they're normally very proactive like for
example Gatsby 101. We met a while ago to kind of talk through it in advance. And really that's where we can help the most is when they're designing their approach on what to do. We don't tell them what to do, but we can, you know, tell them, hey, this is what the standards are requiring just to make sure there's alignment. Like we said, no
issues or concerns. >> Michael. >> Yes, sir. Thank you, Mr. Chair. I have two two quick questions. the outside vendors that the school district uses for the actuarial calculations
are they h how long have we've been using them as to do the this actuarial work >> I would have to get I would have to go back to look at the exact date but it's it's been it's been a long time there has been I think changeover and firms
have been bought out uh but we have been using them for for a significant And you're comfortable with both of those firms? >> We are because there is a separate review, independent review by our external auditors of the assumptions that are used um as well as all the
census data that's used in order to to calculate that that liability. >> Um oh sorry and then to add to that we also our actuaries also evaluate the competence of their actuaries that are utilized also. Uh I have one more comment on the uh on
your page. U my glasses I forgot my glasses. Page nine. This this adjustment for sick leave. How much was that adjustment about? >> Um so that was $17 million was what was restated. >> 17 million. Yes. Think you mentioned
>> $17 million. Was a charge direct charge? >> Yes, >> direct charge. And again, that's something that existed. It's just a matter of how it's being calculated. Like in the past, there were different ways of calculating. This new concept more
likely than not to be used made it consistent for all governments. So it's not new obligation. It's just everybody had to calculate the same way now versus in the past. >> It was just brought up to the standard you're talking about. >> Well, no. Well, the standard the standard changed and was more specific
as to how how it would be recorded. So we were the way that we were calculating the liability was based on when it was vested. >> But when this language came out to say more likely than not, okay, >> there are a lot of people that don't vest, but they still utilize their sick
leave as they as it's earned. And so we had to take that now into consideration to say they're not going to be here the full eight years, but they're still going to you utilize sick leave during that eight-year time period. So that's why we had to go back look at each year historically and say how much is
actually used each year and that was that was the most significant adjustment because initially since we were already reporting this liability we didn't think it was going to have any impact but once we went back and really dug into the language you know working with uh RSM you know there it turned out to be
pretty significant you know adding that additional more likely than not versus just looking at the vested just looking at those that actually vest and when we pay it out. One last comment. What is for my own edification here? What is an adjustment
to a net position? What does that mean? >> Uh what that's reflecting is those were prior year uncorrected misstatements just showing that the impact would have been on that opening balance because these are items that were noted in last year's report that reversed like those same as the contribution subsequent
measurement date. What you have is just timing differences between the fiscal year. So those were items that were noted as past adjustments last year that therefore would have reversed this year. So it was expenses recognized this year that should have been last year as an example.
>> Okay. Any other questions or comments? Uh Heather, I just want to say on behalf of the committee, congratulations to you and your staff for once again doing just a remarkable job. So thank you. Really appreciate it. Annette Pinnick, the director of
accounting, unfortunately, was was is out today, but I really want to thank uh her team uh as well as RSM for getting done before Thanksgiving because that meant they were actually able to enjoy the Thanksgiving giving break because last year was pretty rough, you know,
because of a change in the the auditing standards. And so, I think on both sides there was a lot of additional work and I think we appreciated and worked very hard so that both sides could enjoy Thanksgiving this year. We'll pass on our congratulations to to she and her team too. >> Yes, I will. Thanks. >> Okay. If there's no further comments,
I'll accept a motion to approve this report. >> Andre offers a motion to approve the report as presented. >> There a second. >> Second. >> Discussion. All in favor? >> I. >> All oppose? Passes 50 unanimously. Okay.
Next. Internal funds audit. Randy, >> thank you. uh as of yesterday you we have finished a more school few works uh in the past weeks and up until now we have finished a total of about 110 schools for the
field works so it's about uh 62% it completed so the remaining 38% hopefully we will be able to finish it uh you know within the uh scheduled timeline >> okay uh investigations these were previously sent to each one of you. I'll
ask are there any uh general comments and I just like to say uh just note you've got your calendar of our meetings for next year and we will not have a meeting in January. Next meeting is scheduled to be February 20th. Uh I wish each and every one of you a merry
Christmas and a happy holidays. And with that I'll accept if there's no further business I'll accept a motion to >> make >> the close meeting. session. >> Well, yeah, >> we're we're going to close out this meeting, though. >> Right. I I just want to
>> and we're going to have to wait a few minutes uh for uh for the chief to show up. So, uh I'll accept a motion to adjourn this and let we'll take a break for maybe five 10 minutes until Sarah Mooney gets here and we'll continue. So, with that, >> I'll make a motion to adjurnn.
>> Okay. Second. All in favor? Pass unanimously. Thank you all and merry Christmas and happy holidays again. Meeting a journal.