SCO
Nevada County
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NEVADA COUNTY
OFFICE OF EDUCATION
Report of Review
AUDIT RESOLUTION PROCESS
Fiscal Year (FY) 2012-13 and FY 2013-14
BETTY T. YEE
California State Controller
January 2016
BETTY T. YEE
California State Controller
January 11, 2016
Holly Hermansen, Superintendent
Nevada County Superintendent of Schools
112 Nevada City Highway
Nevada City, CA 95959
Dear Ms. Hermansen:
The State Controller’s Office reviewed the Nevada County Office of Education’s (COE) audit
resolution process for local education agency exceptions noted in the annual audit reports. The
review covered fiscal year (FY) 2012-13 and FY 2013-14.
Our review found that the Nevada COE followed its audit resolution process for FY 2012-13 and
FY 2013-14. As a result, the Nevada COE was in compliance with California Education Code
section 41020.
If you have any questions, please contact Jim L. Spano, Interim Chief, Financial Audits Bureau,
at (916) 323-5849.
Sincerely,
Original signed by
JEFFREY V. BROWNFIELD, CPA
Chief, Division of Audits
JVB/gj
cc: Lori Brooks, Director of Fiscal Services
Nevada County Office of Education
Peter Foggiato, Director
School Fiscal Services Division
California Department of Education
Arlene Matsuura, Education Fiscal Services Administrator
School Fiscal Services Division
California Department of Education
Dan Troy, Principal Program Budget Analyst
Education Systems, California Department of Finance
Nevada County Superintendent of Schools Audit Resolution Process
Contents
Review Report
Summary ............................................................................................................................ 1
Background ........................................................................................................................ 1
Objective, Scope, and Methodology ................................................................................. 2
Conclusion .......................................................................................................................... 3
Views of Responsible Officials .......................................................................................... 3
Restricted Use .................................................................................................................... 3
Nevada County Superintendent of Schools Audit Resolution Process
Review Report
Summary The State Controller’s Office (SCO) reviewed the Nevada County Office
of Education’s (COE) audit resolution process for local education agency
(LEA) exceptions noted in the annual audit reports for fiscal year (FY)
2012-13 and FY 2013-14. Our review found that the Nevada COE
followed its audit resolution process for FY 2012-13 and FY 2013-14.
Background California Education Code section 41020(n) requires the State Controller
to annually select a sampling of county superintendents of schools for
which the SCO will perform a follow-up review of the audit resolution
process. Results of these reviews will be reported to the Superintendent of
Public Instruction (SPI) and the county superintendents of the schools that
were reviewed.
Furthermore, California Education Code section 41020(n) states that the
State Controller shall require auditors to categorize audit exceptions in the
audit report in such a manner that both the county superintendent of
schools and the SPI can discern the exceptions for which it is their
responsibility to ensure that the LEAs take action to correct.
The Nevada COE provides coordination of educational programs and
professional and financial supervision for ten LEAs under its jurisdiction.
In addition, the county superintendent of schools maintains special schools
and programs countywide, independent of the local education agencies.
County superintendents of schools are required to do the following:
Review, for each of their school districts, audit exceptions relating to
attendance, inventory of equipment, internal control, and any
miscellaneous items, and determine whether the findings have been
corrected or an acceptable plan of correction has been developed
(California Education Code section 41020(i)(1));
Review audit exceptions related to the use of instructional materials
program funds, teacher misassignments, and school accountability
report cards. The county superintendents also must determine whether
the exceptions have been corrected or an acceptable plan of correction
has been developed (California Education Code section 41020(i)(2));
Review audit exceptions related to attendance, inventory of equipment,
internal control, and other miscellaneous exceptions. Attendance
exceptions or issues must include those related to local control funding
formula allocations pursuant to Education Code section 42238.02, as
implemented by section 42238.03, and independent study (Education
Code section 41020(j)(1));
Notify the LEA, and request that the governing board of the LEA
provide to the county superintendent of schools, a description of the
correction or plan of correction by March 15 of the subsequent year
(California Education Code section 41020(j)(2));
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Nevada County Superintendent of Schools Audit Resolution Process
Review the description of the correction or plan of correction and
determine its adequacy and, if its response was not adequate, require
the LEA to resubmit that portion of its response that is inadequate
(California Education Code section 41020(j)(3)); and
By May 15 of the subsequent year, certify to the Superintendent of
Public Instruction (SPI) and the SCO that the county has reviewed all
applicable exceptions, and state that all exceptions have been corrected,
or that an acceptable plan for correction has been submitted by the LEA
to the county superintendent, except as noted in the certification. In
addition, identify by LEA any attendance-related exceptions or
exceptions involving State funds, and require the LEA to submit the
appropriate reporting forms to the SPI for processing (California
Education Code section 41020(k));
Review LEAs’ unresolved prior year audit exceptions when the
California Department of Education defers to the county (California
Education Code section 41020(l)); and
Adjust subsequent local property tax requirements to correct audit
exceptions relating to LEA tax rates and tax revenues (California
Education Code section 41020(o)).
Objective, Scope, Our review was conducted under the authority of California Education
Code section 41020(n). Our review scope was limited to determining
and Methodology
whether or not the Nevada COE followed its audit resolution process in
resolving LEA audit exceptions. Our review did not include an evaluation
of the sufficiency of the action taken by the LEA and the Nevada COE to
address each exception, nor did it assess the degree to which each
exception was addressed. Specifically, our review was limited to the
following procedures:
Verifying that the Nevada COE addressed all attendance, inventory of
equipment, internal control, and miscellaneous exceptions. In addition,
we verified whether the Nevada COE addressed any findings on
instructional-materials program funds, teacher misassignments, and
school accountability report cards. However, with respect to exceptions
based on sample items, our review did not include a determination of
whether or not the exception results were properly quantified and
addressed at a districtwide or countywide level;
Verifying whether the Nevada COE notified LEAs that they must
submit completed corrective action forms to the Nevada COE by
March 15, 2014, and March 15, 2015, for FY 2012-13 and FY 2013-
14, respectively. Our review did not include an assessment of the
LEAs’ progress with respect to taking corrective action;
Verifying whether the Nevada COE required the LEAs to submit the
appropriate reporting forms to the SPI for any attendance-related
exceptions that affect State funding;
Reviewing the letters of certification due on May 15, 2014, and
May 15, 2015, that the Nevada COE sent to the SPI and the SCO with
respect to any resolved and unresolved audit exceptions;
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Nevada County Superintendent of Schools Audit Resolution Process
Verifying whether the Nevada COE followed up with unresolved prior
year audit exceptions the SPI required the Nevada COE to conduct; and
Verifying whether the Nevada COE adjusted subsequent local property
tax requirements to correct audit exceptions related to LEA tax rates
and tax revenues.
Conclusion Our review found that the Nevada COE followed its audit resolution
process for FY 2012-13 and FY 2013-14. As a result, the Nevada COE
was in compliance with California Education Code section 41020 for
FY 2012-13 and FY 2013-14. We made no additional determination
regarding the Nevada COE’s audit resolution process beyond the scope of
the review outlined above.
Views of We discussed our conclusion with Lori Brooks, Director of Fiscal Services
Nevada COE, at an exit conference held on December 10, 2015.
Responsible
Ms. Brooks agreed with the conclusion and declined a draft report and
Officials
agreed that the report could be issued as final.
Restricted Use
This report is intended solely for the information and use of the Nevada
COE, the California Department of Education, the California Department
of Finance, and the SCO; it is not intended to be and should not be used
by anyone other than these specified parties. This restriction is not meant
to limit distribution of this report, which is a matter of public record.
Original signed by
JEFFREY V. BROWNFIELD, CPA
Chief, Division of Audits
January 11, 2016
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State Controller’s Office
Division of Audits
Post Office Box 942850
Sacramento, CA 94250-5874
http://www.sco.ca.gov
S16-COE-9003