T-R FILE PHOTO — The first full audit report since Marshalltown Schools paid more than $600,000 in fines and penalties to the Internal Revenue Service shows some areas for improvement, but that the school’s financials are in order.

For the first time since late payroll reports led to Marshalltown Schools paying more than $600,000 in fines and penalties last year, the district received and accepted its audit.

The Iowa State Auditor’s Office was responsible for the 2017-18 audit after a previous audit failed to discover the payroll reporting issue that took place between April 2017 and June 2018. The results were accepted by the Marshalltown School board this week.

“Typically, we want to have our audit and present it in December or January, much earlier than we are this year, but due to some unique circumstances that we encountered, we’re running a little bit behind schedule this year,” said District Director of Finance Paulette Newbold.

The overall opinion of the latest audit brought good news, she said.

“The first part of our independent auditor’s report tells us what the opinion is. This is the most important part of your audit,” Newbold said. “Our opinion is the best opinion we could receive, which is an ‘unmodified opinion.'”

However, the audit did find some areas for the district to improve. One was segregation of duties, which was listed as a “material weakness” in the audit. Lack of such segregation of duties was partially blamed for the payroll reporting issues that caused the fines and penalties last year.

The audit lists payroll along with responsibilities like handling cash transactions, inventory and receipts as also being in need of further segregation of duties. The district responded that it will monitor the situation and segregate duties as much as possible with a limited number of staff.

In December 2018, Newbold and district Business Manager Randy Denham explained to the board that segregation of duties was already being implemented when it came to dealing with payroll in the district.

She said that area and the others listed as material weaknesses would be addressed.

Less severe suggestions, called “significant deficiencies,” were also named in the audit and responded to by the district, including:

• Disaster recovery plan

• Negative lunch account balances

• Computer system

• Inventory

Each of the above items listed as deficiencies came with suggestions for resolving issues, including making updates, continued or improved communication, monitoring and evaluation and other actions as needed. The auditor’s office accepted each of the district’s responses to the listed issues.

Overall, the district spent less than it brought in during the 2017-18 fiscal year.

For the full 2017-18 Marshalltown Schools audit report, visit https://www.auditor.iowa.gov/reports/audit-reports and search for Marshalltown Community School District.

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Contact Adam Sodders at

641-753-6611 or

asodders@timesrepublican.com