Auditor flags La Conner Schools finances

The Washington State Auditor’s office reported on Monday that it issued two “findings” against La Conner School District after examining some financial records.

While most of the areas checked in the district’s yearly audit had no problems, the auditor issued findings — which are formal, documented criticisms — over two errors the district had caught and remedied long before the audit was conducted.

The auditor’s office found that the district over-reported children on tribal land in its application for federal impact aid and that it lacks adequate internal controls over payments involving the use of district credit cards.

The report also states that the errors were quickly caught, reported and corrected by the district but states that more stringent policies are needed to avoid such mistakes.

The period examined spanned the year between Sept. 1, 2014 and Aug. 31, 2015, and the auditors were on site at the school this month.

According to the report, the district received more than $2.4 million in impact aid funding during fiscal year 2015 from the Federal Department of Education, to help offset the cost of educating children who live on federal land not subject to state and county property tax. In La Conner’s case, children who count for impact aid funding live on land held in trust for the Swinomish Indian Tribal Community. In addition to homes in Swinomish, the count applies to houses built on leased tribal land in Shelter Bay and the Pull & Be Damned Road neighborhood.

The report states that the district was overpaid $66,184 because it had counted some children enrolled in its two preschool programs twice — once in each program — resulting in an over reporting of 15 students eligible for impact aid funding.

In its response to that finding, the district stated that it immediately reported the error to the federal impact aid office as soon as it was discovered and the office has corrected the allocation, which will be an adjustment to the current year’s funding. Also, the district stated it has changed its reporting procedure to make sure this never happens again.

On the credit card issue, the auditor’s report states the district has two credit cards, one issued to an employee and the other to the district’s business office.

Purchases on the card issued to the employee drew attention because $1,589 was reported by the employee as an accidental personal expense. The employee reimbursed the district for pulling out the wrong card.

Nevertheless, the auditor’s office slammed the district with a “finding” because the card stayed in the employee’s possession during the interval between when the mistake was discovered and the money was repaid.

The auditor also examined other purchases made with that card, including $2,458 in food purchases and $2,738 in chaperone travel expenses for a trip to Finland.

In its response to the credit card finding, the district explained that the food purchase was for meals provided to staff during required in-service training and late night conferences. The travel expense was for the Finland trip for students the school board had approved. While the students covered their own expenses, the chaperones’ air fare was provided at district expense.

Although the food and Finland trip expenses were approved by the school board, the auditor’s office said there was inadequate documentation and the district must update its policies.

“All we can do is take it and fix it,” said school district Superintendent Tim Bruce. Still, “there isn’t much of a fix because we already fixed it.”

While the district has made changes to make sure such mistakes don’t happen again, Bruce said the school board may decide to make some changes to district policies. The board is presently in the middle of updating many of the district’s policies.