School District Receives Clean Audit, Certificate of Excellence

Manchester's has its finances in order, according to the results of an audit conducted over the summer.

David Gannon, a partner at the Wiss and Company accounting firm, presented his findings from the audit conducted in June which again found that the district's financial reporting was accurate and met the standards for recognition from the Association of School Business Administrators International.

"I'm happy to report that we've issued an unqualified opinion on the district's financial statements, which means that the financial statements are present in accordance with county principles," he said during the board of education's October regular meeting.

The district was awarded the Certificate of Excellence in Financial Reporting for the 15th straight year from the ASBAI, a group founded in 1910 to promote high standards of school management. Only one other district in New Jersey has received the honor more consecutive years than Manchester, coming in at 16.

District business administrator Craig Lorentzen said that the award "validates the district's commitment to financial integrity, transparency and high quality financial reporting."

"I think that especially now more than ever, this is very important because with the things going on with the economy, this lets the taxpayers know that this board and our board office is doing what we need to do and we're doing things in compliance with state and federal guidelines," he said. "We're doing things the way we're supposed to be doing them."

The audit covered the business office, all of the schools, and departments including transportation, special education and student services.

"It's really important to have a good internal control structure throughout the district," Gannon said. "People really doing the right thing in all the buildings."

Gannon gave a high-level overview of the district's finances: The general fund in June 2010 contained $828,000, up from $810,000 that same time in 2009.

"It's really important to note that's after a $2.3 million decrease in state aid. To be able to maintain your level of cushion -- your fund balance -- is impressive," Gannon said.

The capital projects fund at the end of last year was $830,000, which Gannon said was "a very strong position" to be in as the district finishes up work on its referendum project, which included renovation of the auditorium and athletic fields. 

The only cause for concern in the audit was a drop in revenue from the township-managed, state-funded Regional Day School in Jackson, which saw a $230,000 drop in revenue. The unrestricted fund balance for that school was $130,000, a figure that Gannon said is "light" when compared to the previous four years when the district was bringing in an average of about $350,000 from RDS. 

"Certainly, that would be the only cause of concern from a financial perspective that I could provide you with tonight," he said.

Lorentzen said that the district planned for about 100 students to attend RDS this year, but the special needs school opened with 85. There are now 90 students enrolled, a number that Lorentzen said may continue to increase as administrators attempt to spread awareness that the school offers rates comparable to private institutions. 

Gannon said that the audit presents "the highest level assurance" that Manchester administrators are properly handling finances.

"The underlying financial statements that the district prepares on a month basis really are very accurate. We do not have any material adjustments to make to those records, so really they do an excellent job," Gannon said. "It's really a great accomplishment."

The audit also found no material weaknesses, which would entail district administrators missing important information.

"We found that internal controls are operating as intended," Gannon said. 

As for federal and state grants, the audit determined that Manchester properly uses the funds it receives. 

"Again, we found no compliance findings, no internal control findings, no findings that would indicate the district is not spending the money and cause a grant remittance," Gannon said. 

Likewise, a management report found nothing out of order, something that Gannon said was "pretty unusual."

"The district has done a great job over the past 5-10 years, even through transition, to ensure that your operations are operated in a manner that is in accordance with the rules and regulations of the state," he said. 

While Gannon said that this determination may seem routine for Manchester, other districts do not fair as well. He said that a new client that had 41 findings, for example.

"It's really impressive. It's not something to take lightly," he said. 

Gannon said that Manchester routinely has its financial books closed and ready in time for the summer audit.

"Year in and your out, we always receive the utmost, great cooperation from all personnel in the district," he said. "Everyone we come across is always very professional, always responds to our requests very quickly."

The audit process began in June and ran for about five weeks during what Lorentzen called the busiest time of the year as administrators prepared for the new school year. 

"The audit is an extremely intensive process," Lorentzen said. 

The clean audit is an accomplishment that can be shared throughout the district, according to the business administrator.

"The business office can't do it all. We have to rely on the schools and all the staff in the schools to do their part so that we can receive an audit with a clean opinion," Lorentzen said.

For the 2011-12 school year, the district will operate on a $50 million budget which was originally voted down by residents in April, leading the township council to make before it was approved. 

Council president Craig Wallis at the time said that the district prepares "a very good budget."