The 2006 - 2007 Financial Audit of the Fairfield County School District gave the highest possible opinion to the District’s financial statements; however, auditors cautioned the Board of Trustees about a declining fund balance (savings).

“The General Fund balance decreased by $659,000 during the year ended June 30, 2007, compared to a decrease of $4,445,000 for the prior year,” the audit states on page 3. “The fund balance has decreased a total of $5.65 million during the last three years.”

The decrease leaves the District’s General Fund fund balance at the low end of the generally recommended range for a government’s savings.

The Board voted to accept the audit on a vote of six in favor and one abstention (Board member Annie McDaniel). The audit is expected to be discussed again during a January meeting of the Board.

Mike Downing from Greene, Finney & Horton Certified Public Accountants and Consultants of Mauldin, South Carolina provided the Board with an overview of the audit during a meeting held in December.

“I am happy to say that we can give you an unqualified opinion on your financial statements,” Downing said. “That means that the balances and the amounts given in the financial statements are materially correct.”

Fund balances (savings) allow a government cash flow through periods of time in which the bulk of the tax revenue has already been collected or in the event of unanticipated major expenses.

“You would not have to incur short - term loans, like tax anticipation notes,” Downing said.

The District did seek such a loan during the last fiscal year.

Ample fund balances can also have a positive influence on bond ratings.

The auditors also recommended that the District adopt an accounting policies and procedures manual. Such a manual, Downing pointed out, would establish policies governing many of the findings identified by the auditors.

“That is one of our biggest recommendations - that you would strive to get an accounting policies and procedures manual,” he said. “That would help.”

Some of the findings are as follows:

the bank reconciliations are not being prepared in a timely manner (For example, according to the audit, the June 2007 reconciliation was not completed until after the auditors arrival in October and the reconciliations for July through September had not been completed as of November.);

the District does not have adequate internal controls over its annual financial reporting process that would allow for the District to prevent or detect material misstatements in the basic financial statements;

and the District has not complied with the State Department of Education’s requirements regarding maintaining applications related to the National School Breakfast and Lunch Program.