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Outside, independent CPA audit of PCSD finances for three fiscal years

September 16, 2019

 

For the Parma City School District (PCSD), practicing fiscal responsibility and increasing communication and transparency throughout the communities are more than just goals, they are integral parts of everyday operations. Each year, the PCSD demonstrates this through the audit conducted by the Ohio Auditor of State.

 

In Ohio, any public office which spends less than $750,000 in federal funds is required to complete an audit every two years. Since the PCSD spends approximately $10 million in federal funds each year, the district is audited annually by the Ohio Auditor of State.

 

In the spring of 2019, the PCSD requested permission from the Ohio Auditor of State that an outside, independent certified public accounting (CPA) firm perform this annual audit for the school district.

 

At the June 6, 2019 regular Board of Education meeting, Treasurer Sean Nuccio announced that Rea & Associates had been selected by the Ohio Auditor of State to serve the district. Rea & Associates, with offices located throughout the state, is contracted to complete the audit for the PCSD for fiscal years 2019 through 2021. Some of the Northeast Ohio school districts served by Rea & Associates over the last five years include Brecksville-Broadview Heights, Chagrin Falls, Independence, Kent, Streetsboro and Willoughby-Eastlake.

 

“The Auditor of State is very good, they have a lot of good auditors, but, we are having a CPA firm look at this next three years,” Nuccio explained at the June 6 meeting. “It’s a different set of eyes and maybe they will come up with different things they find or recommend to us.”

 

“We are always trying to triangulate, to use as many different ways as possible to ensure that we are fiscally responsible,” PCSD Superintendent Charles Smialek, Ph.D. expressed. “We know that an independent audit was something which had been a request in the past, and going with a CPA firm instead of the Auditor, again, allows us to triangulate. We have one more set of eyes to help show our community that we are fiscally responsible.”

 

According to Nuccio, a standard fiscal audit of the district covers many areas. These areas include, but are not limited to, evaluation of internal controls and processes which the PCSD uses to prevent and detect fraud or error, compliance with local, state and federal laws, and substantive tests over management of cash receipts and expenses.

 

“They will also look at our financials, to see if things are recorded in the correct fund or the correct line item,” Nuccio explained. “They will test our cash to see if what we have in the banks matches our bank reconciliations - to see if there is any missing money, which there is not. They look at accounts receivable, accounts payable, our capital assets. They test our whole financial statement - our balance sheet and our statement of revenue.”

 

Having an outside CPA firm like Rea & Associates complete the audit for the next three years is a direct response to concerns brought forth by the community.

 

“We’re listening to their concerns that they want a CPA firm to do the audit,” Nuccio expressed. “The CPA firm is going to provide an opinion on the audit, that our books are in compliance with Generally Accepted Accounting Principles (GAAP).”

 

Rea & Associates began their examination of the PCSD finances this fall, and once completed, will submit their report to the Ohio Auditor of State.  The Auditor of State will then review Rea & Associates’ report, certify it, and post the final report on the state’s website. The PCSD will also post the audit on the district’s website, as well. This review will cost the district $24,150 dollars for FY 2019.

 

In addition, the PCSD continues to work closely with Ohio Department of Education as part of the district’s Fiscal Caution status. A financial consultant from ODE receives monthly reports from the PCSD, along with any requested information.

 

“We probably speak two, three times a month, and we go over things” Nuccio said. “Sometimes they request more reports, but they monitor us, they continue to monitor us, until the Auditor of State releases us from Fiscal Caution, which we hope will be soon.”