School District #1 Audit Earns Highest Rating
 | Author:
Nancy Marks, Reporter
Nancy Marks: MT43 News Secretary and News Editor |
School District #1 Audit Earns Highest Rating Nancy Marks Reporter The 2021-2022 Townsend School District #1 audit earned the highest rating a district can earn as noted by Denning, Downey and Associates certified public accountants of Helena.
In a letter published in the April 21st edition of this paper, the accounting firm delivered an “unmodified report” to District #1. “Unmodified is the best rating a school district can receive,” Board Chairman Jason Noyes said in an interview. He pointed out the audit found no unreported or misused funds.
In the May 9 board meeting, new trustee Chase Ragen had questioned whether there were problems with the audit. Noyes explained the accountants had noted in the report’s schedule of findings suggested better procedures for handling journal entries and cash flow between the County Treasurer’s office and the District Clerk’s office. It also pointed out the handling of journal entries had not been documented correctly. School Districts are mandated by the Office of Public Instruction to have annual or two-year audits.
Two different groups of employees with both the County Treasurer’s office and the District each handled processing cash and issuing journal entries differently. That caused the inconsistency in the two-year audit. "The district had position changes in both the superintendent’s office with a new superintendent and a new clerk all in the last year. Former County Treasurer Doug Ellis resigned and at that time Melissa Franks filled the position,” Noyes pointed out.
In an interview with Franks, she said her office noted some inconsistencies. In 2022 she and the auditor worked with the District Clerk to clarify those. “The school reports must balance to our reports. That was the reason for our visit to the school,” she said, “The overall problem was really lack of communication between the two offices, so last summer the auditor and I visited with the school clerk.” Since then, the financial statements are now back on the same page.”
As soon as Superintendent Susie Hedalen realized that the two sets of books were not balancing, she began taking corrective actions. “I now sign off on all journal entries and cash expenditures. We produce a monthly packet showing the financial statement to the board and for the public’s use, she explained.
Hedalen explained all budget costs were covered throughout the year. “We had no fund shortage such as happened in other districts which were in the red and had to raise levees to pay for the shortages. We’re very proud we have not been in the red,” she said.
All tax-raised School District funds are funneled from the County Treasurer to the Montana Board of Investments. As funds are needed, the Board of Investments, in turn, sends money back to the Treasurer’s office for dispersion pro rata (in proportion to) what the District needs. “Very few state school districts handle and invest their own money,” Noyes pointed out when asked by Ragen about investing the school’s money.
