Year Ending June 30, 2020
Basic Financial Statements
Document Prepared by: Mengel, Metzger Barr & Co. LLP
Document Highlights Include:
Independent Auditors' Report
Management's Discussion and Analysis (Unaudited)
Basic Financial Statements: Statement of Net Position
Statement of Activities and Changes in Net Position
Balance Sheet - Governmental Funds
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to Statement of Activities
Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position
Notes to the Basic Financial Statements:
Required Supplementary Information: Schedule of Changes in District's Total OPEB Liability and Related Ratio (Unaudited)
Schedule of the District's Proportionate Share of the Net Pension Liability (Unaudited)
Schedule of District Contributions (Unaudited)
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget (Non-GAAP Basis) and Actual - General Fund (Unaudited)
Supplementary Information: Schedule of Change from Adopted Budget to Final Budget and Real Property Tax Limit - General Fund
Schedule of Capital Projects Fund - Project Expenditures and Financing Resources
Combining Balance Sheet - Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds
Net Investment in Capital Assets
Schedule of Expenditures of Federal Awards
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
Schedule of Findings and Responses
Corrective Action Plan
Document Highlights Include:
Document Dated: January 11, 2021
To NYS Education Department
In response to the Communicating Internal Control Related Matters Identified in an Audit for Year Ended June 30, 2020, the following corrective action plan shall be enacted:
1. The District will purchase necessary equipment and supplies for the operation of the School Lunch Program to bring the fund balance to a level within legal limit prior to June 30, 2021.
Anticipated Completion Date: this item was completed in the fall of 2020.
2. The Treasurer will monitor the timing of deposits and transfers to ensure that no checking accounts have a negative balance.
Anticipated Completion Date: this item was completed in the fall of 2020.
Approved by the Board of Education on January 11, 2021.
Document Signed by - D. Todd Campbell
Superintendent of Schools
Extraclassroom Activity Funds
Document Highlights Include:
- Independent Auditors’ Report
- Statement of Cash Receipts and Disbursements for year ended June 30, 2020
- Notes to Financial Statement
- Auditors’ Findings and Evaluation
Extraclassroom Corrective Action Plan Year Ending 2020.06.30
Document Highlights Include:
Document Dated: January 11, 2021
Document to: NYS Education Department
In response to the Extraclassroom Activity Funds Auditors' Findings and Evaluation for the Year ended June 30, 2020, the following corrective action plan shall be enacted:
1. Profit & Loss Statements - High School Principal will continue to work with club advisors and student treasures to be sure future fundraises are profitable and do not show a loss. The Varsity Club hat sale will be discontinued.
Anticipated Completion: Fall 2020
2. Change/Petty Cash Fund - High School Principal will review proper procedures for change/petty cash with all advisors and student treasurers.
Anticipated Completion: Fall 2020
3. Plant Fundraiser - High School Principal will review proper procedures for changing prices with approval by the club with all advisors and student
treasurers.
Anticipated Completion: Fall 2020
Approved by the Board of Education - January 11, 2021.
Document Signed by D. Todd Campbell - Superintendent of Schools
Letter of Communication
Document Highlights Include:
Document Prepared by Mengel Metzger Barr & Co. LLP
Document Dated: October 2, 2020
Addressed to: The Board of Education
We have audited the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Letchworth Central School District for the year ended June 30, 2020, and have issued our report thereon dated October 2, 2020.
Professional standards require that we provide you with the following information related to our audit.
A. Our Responsibility Under U.S. Generally Accepted Auditing Standards and Government Auditing Standards
As stated in our engagement letter dated April 13, 2020, our responsibility, as described by professional standards, is to express an opinion about whether the financial statements prepared by management with your oversight are presented fairly, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities.
As part of our audit, we considered the internal control of Letchworth Central School District, New York. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we performed tests of Letchworth Central School District, New York’s compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our tests was not to provide an opinion on compliance with such provisions.
B. Planned Scope and Timing of the Audit
We performed the audit according to the planned scope and timing previously communicated to management and the Board in our engagement letter dated April 13, 2020.
C. Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Letchworth Central School District, New York are described in Note 1 to the financial statements. The new accounting pronouncements which were implemented were GASB Statement 92, Omnibus 2020, Paragraphs 1-11a, and 12 and GASB Statement No. 95, Postponement of the Effective Dates for Certain Authoritative Guidance. We noted no transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events effecting them may differ significantly from those expected. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. There were no individually sensitive disclosures affecting the financial statements.
D. Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
E. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole.
F. Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
G. Management Representations
We have requested certain representations from management that are included in the management representation letter dated October 2, 2020.
H. Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the governmental unit’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
I. Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
J. Compliance with All Ethics Requirements Regarding Independence
The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence. Safeguards in place to eliminate or reduce threats to independence to an acceptable level include a skilled, knowledgeable and experienced Business Official who reviews draft financial statements prior to issuance and accepts responsibility for them.
K. Other Matters
We applied certain limited procedures to the management’s discussion and analysis, schedule of changes in District’s total OPEB liability and related ratio, schedule of District’s proportionate share of the net pension liability, schedule of District contributions, and budget comparisons, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquires, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on supplementary information accompanying the financial statements (as listed in the table of contents) but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
This information is intended solely for the use of the Board of Education and management of the Letchworth Central School District, New York and is not intended to be and should not be used by anyone other than these specified parties.
Document signed by: Mengel Metzger Barr & Co. LLP
Management Letter Year Ending June 30 2020
Document Highlights Include:
Document Prepared by Mengel Metzger Barr & Co LLP
Document Dated: October 2, 2020
To the Board of Education
Letchworth Central School District, New York
In planning and performing our audit of the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Letchworth Central School District, New York as of and for the year ended June 30, 2020, in accordance with auditing standards generally accepted in the United States of America, we considered the Letchworth Central School District, New York’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District’s financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses. Given these limitations during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However material weaknesses may exist that have not been identified.
Current Year Deficiencies in Internal Control:
School Lunch Fund –
Federal Regulation #7 CFR Part 210.15 recommends the School Lunch Fund balance not exceed three months average expenditures. As of June 30, 2020, the District’s School Lunch Fund balance totaled $100,677 and exceeded three months average expenditures in the amount of $21,623.
We recommend the District continue to closely monitor the School Lunch program and make every effort to comply with the Federal Regulation.
Cash Balance –
During the course of our examination, we noted that the reconciled bank balance in one of the District’s checking accounts had a deficit balance.
We recommend the District ensure transfers of funds are made on a timely basis, to ensure the District does not overdraft any accounts.
Other Items:
The following items are not considered to be deficiencies in internal control, however, we consider them other items which we would like to communicate to you as follows:
Cyber Risk Management –
The AICPA Center for Audit Quality recently issued a cyber security risk management document discussing cyber threats that face both public and private entities. The District’s IT personnel routinely assesses cyber risk as part of their normal operating procedures. We recommend the District continue to document their cyber risk assessment process in writing which should include the risk assessment process, the frequency of the risk assessment, how findings are to be communicated to the appropriate level of management, and how the process will be monitored.
GASB Statement No. 84 –
During this next fiscal year the District will be required to implement GASB Statement No. 84 which will modify the financial reporting for the Agency Funds.
This will require a review of the various accounts currently reported in the Agency Funds along with the extraclassroom activity policy and procedures in order to determine where to report the District’s extraclassroom activity funds, scholarships, and other Agency activity.
Prior Year Recommendation:
We are pleased to report the following prior year recommendation has been implemented to our satisfaction:
1. There has been significant improvement with recording accounting entries at the time funds are transferred, received and deposited into the District’s bank accounts. In addition, there has been significant improvement with the preparation and review of bank reconciliations.
This communication is intended solely for the information and use of management, the Board, audit committee, and others within the organization and is not intended to be and should not be used by anyone other than these specified parties.
We wish to express our appreciation to the business office staff for all the courtesies extended to us during the course of our examination.
Document Signed: Mengel, Metzger, Barr & Co. LLP