One notable issue facing the board was the internal audit conducted by Pervis Gray, which revealed notable deficiencies in internal controls across the district’s schools. The audit, which covered the fiscal year ending June 30, 2025, identified concerns regarding the segregation of duties in financial operations. Instances were noted where bookkeepers, who were responsible for accounting functions, failed to comply with policies designed to prevent potential financial misstatements. The board acknowledged these deficiencies, and measures are being taken to update the internal accounts manual and improve training for bookkeepers.

The audit report further identified repeated issues with cash handling and fundraising activities. Nine schools were specifically mentioned for their shortcomings in cash handling, with three having repeat offenses. Schools were found to be initiating fundraising activities without prior approval from principals and failing to submit timely recaps of revenue and expenses. These actions led to discrepancies in financial records and posed risks to the district’s financial management. The audit emphasized the importance of adhering to protocols mandated by the Department of Education, which requires deposits to be made within 24 hours and banked within five working days.

The issue of documentation was another significant topic of discussion. Missing support documentation frequently involved purchase orders lacking required principal signatures, hindering the substantiation of transactions. This was particularly problematic for PCAR transactions and pointed to a breakdown in the review process. To address these issues, the board discussed the importance of maintaining effective controls and the need for comprehensive training and accountability measures to prevent these systemic problems from recurring.

In addition to financial audits, the board discussed ongoing efforts to strengthen cybersecurity measures. RSM, an auditing firm, presented updates on their cybersecurity and contract review audits. The firm has begun penetration testing to identify vulnerabilities within the district’s systems. This testing involves both external and internal assessments. RSM assured the board that detailed reports would be provided to management, with a focus on improving the district’s cybersecurity posture.

The meeting also addressed the integration of internal accounts into the district’s Enterprise Resource Planning (ERP) system, known as Business Plus. This integration is intended to streamline financial workflows. With this new system in place, unsupported transactions should become less frequent, as all entries must now follow established workflows.

As the meeting progressed, the board discussed the scheduling of future audits and the importance of having a meaningful agenda for these sessions. The proposal to delay the February meeting to March was considered to ensure that reports on the technology and contract audits would be ready for presentation. This decision aimed to provide adequate time for thorough discussions and to ensure that all findings could be addressed comprehensively.

The ethical hacking team involved in the cybersecurity audits was also a topic of inquiry. It was clarified that the team comprises employees from a specialized firm with experience in working with school districts and government entities. This expertise is expected to result in realistic recommendations tailored to the unique needs of educational institutions.