CULLEN & DANOWSKI, LLP
CERTIFIED PUBLIC ACCOUNTANTS November 1, 2019
Southampton Union Free School District
Southampton, New York
Dear Members of the Board:
In planning and performing our audit of the financial statements of the Southampton Union Free School District(District) as of and for the year ended June 30, 2019, in accordance with auditing standards generally accepted in the United States of America, we considered the District's internal control over financial reporting (internal control) as a basis for designing auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion 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.
During our audit we became aware of other matters that are opportunities for strengthening internal controls and operating efficiencies. The memorandum that accompanies this letter summarizes our comments and suggestions concerning those matters. This letter does not affect our report dated November 1, 2019, on the financial statements of the Southampton Union Free School District.
We will review the status of these comments during our next audit engagement. We have already discussed these comments and suggestions with various District personnel, and we will be pleased to discuss them in further detail at your convenience, to perform any additional study of these matters, or to advise you about implementing the recommendations.
This communication is intended solely for the information and use of the Board of Education, Audit Committee, management, others you deem appropriate within the District, and any governmental authorities you need to share this information with. It is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
LUGO Y- LEP
Cullen & Danowski, LLP
1650 ROUTE 112, PORT JEFFERSON STATION, NEW YORK 11776-3060
PHONE: 631-473-3400 • FAX: 631-473-4863 • WWW.CDLLP.NET
Southampton Union Free School District
For the Year Ended June 30, 2019
STATUS OF PRIOR YEAR COMMENTS
There were no prior year comments to report.
CURRENT YEAR COMMENT
Summer Placement Program Receivables
The District participates in the New York State Section 4408 summer placement program in which the District operates both an in-house and an out-placement program to provide services for special education students during the summer. For the out-placement services, the district typically receives 80% of the reimbursement from the New York State Education Department (NYSED) and the remaining 20% of the costs are subsidized by the general fund.
During our audit, we noted that District has been estimating and budgeting a 20% general fund subsidy to pay for the costs of providing these in-house services. However, upon further review of the actual costs of providing these services, it was determined that the costs are much higher and the general fund subsidy should be more than 20%. An adjustment was made at year end to better reflect the outstanding receivables in the special aid fund.
We recommend that the District review the associated costs of providing services for the 4408 program with their special education department and determine the appropriate estimate of the general fund subsidy to be budgeted annually.
Compensated Absences
The District records a liability for compensated absences, which are primarily unused sick days payable upon retirement based on contractual agreements.
During our current year audit, we noted that the compensated absences schedule calculation initially provided by the District had the incorrect rates and accumulated days for employees that did not tie out to nVision payroll records, Upon further inquiry, we noted that a detailed review of the compensated absences calculation prepared by the business office clerk had not been performed, therefore the errors in the schedule were not captured. Upon our request, the District updated the compensated absences schedule to reflect the correct pay rates and accumulated days.
We recommend that the District implement procedures to ensure that a thorough review of the accuracy of the compensated absences schedule is prepared on an annual basis. In addition, we recommend that someone independent of preparing the schedule review the data and calculations on the schedule prior to providing it to the auditors for review and use in the financial statements.
Southampton Union Free School District
For the Year Ended June 30, 2019
Disaster Recovery Plan Testing
The District should have controls that include the safeguarding of the financial accounting software and data to ensure the preservation of the records and the ability to process transaction without significant interruption.
During our current year audit, we noted that the District has developed a contingency plans for alternative processing of transactions in the event of loss or interruption of their network. However, upon further inquiry, we noted that this plan has not been tested to ensure that all financial information can be fully recovered.
We recommend that the District perform periodic testing of its disaster recovery plan to ensure that in the event of a significant interruption, the District's financial data can be properly restored and operational.
VINCENT D, CULLEN, CPA (1950-2013)
JAMES E. DANOWSK[, CPA PETER F. RODRIGUEZ, CPA
JILL S. SANDERS, CPA DONALD HOFFMANN, CPA
CHRISTOPHER V. REINO, CPA
ALAN YU, CPA
November 1, 2019
Cullen & Danowski, LLP
1650 Route 112
Port Jefferson Station, New York 11776-3060
We are providing this letter in connection with your audit of the statement of cash receipts and disbursements of the extraclassroom activity funds of the Southampton Union Free School District (District), for the year ended June 30, 2019, and the related note to the financial statement, for the purpose of expressing an opinion as to whether the financial statement presents fairly, in all material respects, the cash transactions of the extraclassroom activity funds in accordance with the cash basis of accounting.
Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.
We confirm, to the best of our knowledge and belief, as of November 1, 2019, the following representations made to you during your audit.
Financial Statement
70 Leland Lane • Southampton, NY 11968
Phone: 631-591-4500 • Fax: 631-287-2870 • www.southamptonschools.org
ANCHORING THE COMMUNITY
Information Provided
Government - Specific
November 1, 2019
Cullen & Danowski, LLP
1650 Route 112
Port Jefferson Station, New York 11776-3060
We are providing this letter in connection with your audit of the statement of cash receipts and disbursements of the extraclassroom activity funds of the Southampton Union Free School District (District), for the year ended June 30, 2019, and the related note to the financial statement, for the purpose of expressing an opinion as to whether the financial statement presents fairly, in all material respects, the cash transactions of the extraclassroom activity funds in accordance with the cash basis of accounting.
Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.
We confirm, to the best of our knowledge and belief, as of November 1, 2019, the following representations made to you during your audit.
Financial Statement
70 Leland Lane • Southampton, NY 11968
Phone: 631-591-4500 • Fax: 631-287-2870 • www.southamptonschools.org
ANCHORING THE COMMUNITY
Information Provided
Government - Specific
November 1, 2019
Cullen & Danowski, LLP
1650 Route 112
Port Jefferson Station, New York 11776-3060
We are providing this letter in connection with your audit of the financial statements of Southampton Union Free School District (District), which comprise the respective financial position of the governmental activities, each major fund and the fiduciary funds as of June 30, 2019 and the respective changes in financial position for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions as to whether the financial statements present fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.
We confirm, to the best of our knowledge and belief, as of November 1, 2019, the following representations made to you during your audit.
70 Leland Lane • Southampton, NY 11968
Phone: 631-591-4500 • Fax: 631-287-2870 • www.southamptonschools.org
Others where the fraud could have a material effect on the financial statements.
(including those pertaining to adopting, approving, and amending budgets), provisions
of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements or as a basis for recording a loss contingency, or for reporting on noncompliance.
for purposes for which both restricted and unrestricted net assets are available and have determined that net assets were properly recognized under the policy.
November 1, 2019
Cullen & Danowski, LLP
1650 Route 112
Port Jefferson Station, New York 11776-3060
We are providing this letter in connection with your audit of the statement of cash receipts and disbursements of the extraclassroom activity funds of the Southampton Union Free School District (District), for the year ended June 30, 2019, and the related note to the financial statement, for the purpose of expressing an opinion as to whether the financial statement presents fairly, in all material respects, the cash transactions of the extraclassroom activity funds in accordance with the cash basis of accounting.
Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.
We confirm, to the best of our knowledge and belief, as of November 1, 2019, the following representations made to you during your audit.
Financial Statement
70 Leland Lane • Southampton, NY 11968
Phone: 631-591-4500 • Fax: 631-287-2870 • w%öW.southamptonschools.org
ANCHORING THE COMMUNITY
Information Provided
Government - Specific
November 1, 2019
Cullen & Danowski, LLP
1650 Route 112
Port Jefferson Station, New York 11776-3060
We are providing this letter in connection with your audit of the financial statements of Southampton Union Free School District (District), which comprise the respective financial position of the governmental activities, each major fund and the fiduciary funds as of June 30, 2019 and the respective changes in financial position for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions as to whether the financial statements present fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GMP).
Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that; in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.
We confirm, to the best of our knowledge and belief, as of November 1, 2019, the following representations made to you during your audit.
Financial Statements
70 Leland Lane • Southampton, NY 11968
Phone: 631-591-4500 • Fax: 631-287-2870 • www.southamptonschools.orz
ANCHORING THE COMMUNITY
Information Provided
Government - Specific
SOUTHAMPTON UNION FREE SCHOOL DISTRICT
EXTRACLASSROOM ACTIVITY FUNDS
FINANCIAL STATEMENT WITH
INDEPENDENT AUDITOR'S REPORT
June 30, 2018
SOUTHAMPTON UNION FREE SCHOOL DISTRICT EXTRACLASSROOM ACTIVITY FUNDS
Table of Contents
Independent Auditor's Report 1
Financial Statement
Statement of Cash Receipts and Disbursements 3
Note to Financial Statement 4
CULLEN & DANOWSKI, LLP
CERTIFIED PUBLIC ACCOUNTANTS
VINCENT D, CULLEN, CPA
JAMES E. DANOWSKI, CPA
PETER F. RODRIGUEZ, CPA
JILL S. SANDERS, CPA
DONALD J, HOFFMANN, CPA
CHRISTOPHER V. REINO, CPA
ALAN YO, CPA
INDEPENDENT AUDITOR'S REPORT
To the Board of Education
Southampton Union Free School District
Southampton, New York
We have audited the accompanying Statement of Cash Receipts and Disbursements of the Southampton Union Free School District's (District) extraclassroom activity funds for the year ended June 30, 2018, and the related note to the financial statement.
Management's Responsibility for the Financial Statement
Management is responsible for the preparation and fair presentation of this financial statement in accordance with the cash basis of accounting described in Note I.B. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statement. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District's preparation and fair presentation of the financial statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statement.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.
1650 ROUTE 112, PORT JEFFERSON STATION, NEW YORK 11776-3060
PHONE: 631-473-3400 • FAX: 631-473-4863 WWW.CDLLP.NET
Basis for Qualified Opinion
The cash receipts records of the student clubs within the extraclassroom activity funds of the Southampton Union Free School District were not adequate to permit the application of auditing procedures to indicate whether the receipts recorded represent all receipts collected by the clubs.
Qualified Opinion
In our opinion, except for the effect of any adjustments that might have been necessary had we been able to perform adequate auditing procedures in regard to the receipts referred to in the Basis for Qualified Opinion paragraph, the financial statement referred to in the first paragraph presents fairly, in all material respects, the cash transactions of the extraclassroom activity funds of the Southampton Union Free School District for the year ended June 30, 2018, on the basis of accounting described in Note I.B.
Basis of Accounting
We draw attention to Note I.B. of the financial statement, which describes the basis of accounting. This financial statement is prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter.
SOUTHAMPTON UNION FREE SCHOOL DISTRICT EXTRACLASSROOM ACTIVITY FUNDS
STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS
For the Year Ended June 30, 2018
|
Cash |
Receipts |
Disbursements |
Cash |
|
Balance |
and |
and |
Balance |
|
June 30, 2017 |
Transfers |
Transfers |
June 30, 2018 |
CLUBS |
|
|
|
|
|
|
|
|
---|---|---|---|---|---|---|---|---|
Class of 2018 Class of 2019 |
3,623 935 |
5,991 301 |
9,562 |
52 1,236 |
||||
Class of 2020 Class of 2021 |
|
413 |
|
2,555 977 |
|
2,661 |
|
307 977 |
Aquaculture Club |
|
4,202 |
|
2,431 |
|
1,237 |
|
5,396 |
Band |
|
1,215 |
|
501 |
|
466 |
|
1,250 |
Best Buddies Chorus |
|
536 9,373 |
|
100 1,505 |
|
350 |
|
286 10,878 |
Rotary Interact |
|
37 |
|
2,221 |
|
2,200 |
|
58 |
Key Club |
|
2,037 |
|
6,622 |
|
5,981 |
|
2,678 |
Honor Society |
|
1,699 |
|
673 |
|
1,419 |
|
953 |
Junior Honor Society Interest |
|
967 |
|
1,020 36 |
|
1,667 36 |
|
320 |
Latin Club |
|
3,140 |
|
6,613 |
|
6,080 |
|
3,673 |
Mariner Patriot Club Model UN Club |
|
260 |
|
423 585 |
|
190 585 |
|
493 |
Outing Club Southampton Intermediate |
|
1,710 |
|
18,068 |
|
16,643 |
|
3,135 |
School Yearbook Best Buddies |
|
1,115 |
|
6,301 1,115 |
|
5,062 1,115 |
|
2,354 |
Student Council - High School Student Council - Intermediate School |
|
24,750 1,136 |
|
25,365 595 |
|
21,230 |
|
28,885 1,731 |
Varsity Club |
|
2,691 |
|
2,582 |
|
2,002 |
|
3,271 |
Yearbook Seaspray |
|
3,501 |
|
10,522 |
|
12,598 |
1,425 |
|
Total |
63,340 |
97,102 |
91,084 |
69,358 |
See Note to Financial Statement
SOUTHAMPTON UNION FREE SCHOOL DISTRICT EXTRACLASSROOM ACTIVITY FUNDS NOTE TO FINANCIAL STATEMENT June 30, 2018
A. Financial Reporting Entity
The extraclassroom activity funds represent funds of the students of the Southampton Union Free School District (District). Although, the extraclassroom activity funds are independent of the District with respect to its financial transactions and the designation of student management, the Board of Education exercises general oversight of these funds. Based on this criterion, the extraclassroom activity funds are included in the District's reporting entity. The District reports assets held by it as agent for the extraclassroom organizations in an agency fund in the Statement of Fiduciary Net Position - Fiduciary Funds.
The accompanying financial statement has been prepared on the cash receipts and disbursements basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles. Under that basis, the only asset recognized is cash, and no liabilities are recognized. All transactions are recognized as either cash receipts or disbursements, and noncash transactions are not recognized. The cash basis differs from generally accepted accounting principles primarily because receivables and payables, inventory, long-lived assets, and accrued income and expenses, which would be recognized under accounting principles generally accepted in the United States of America, and which may be material in amount, are not recognized in the accompanying financial statement.