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April 24, 2024, Audit Advisory Committee Meeting

Committee Members Present: Chair Paul Numbers, Jr., Vice-Chair, Mindy Menzel, Mark Sizemore, Monique Thompson, and Lasonja Williams. Duval County Public Schools Chairman, Darryl Willie (ex officio non-voting member) was not present. Steven Apple arrived at 11:05 a.m. 

Board Members Present: Vice-Chairman Charlotte D. Joyce.

Call Meeting to Order

Committee Chairman, Paul Numbers called the meeting to order at 11:00 a.m.

Staff members who were also present:

• Corey Wright, Chief of Staff

• Ron Fagan, Chief Officer, Financial

• Ashley Barr, Director, Strategic Partnership

• Dr. Dana Kriznar, Superintendent

• Monica Adams, Administrative Assistant to the Board

Approval of the April 24, 2024, Agenda

Motion:

That the Audit Advisory Committee approve the April 24, 2024, agenda as submitted on April 2, 2024.

Vote Results:

Motion: LaSonja Williams

Second: Mindy Menzel

Discussion: None

PASSED: 5-0

Aye:

Paul Numbers

Monique Thompson

Mindy Menzel

Mark Sizemore

LaSonja Williams

Nay:

None

Public Comments

None.

Approval of Minutes:

Motion:

That the Audit Advisory Committee approve the following minutes:

• January 11, 2024, Audit Advisory Committee Meeting

• February 19, 2024, Audit Advisory Evaluation Subcommittee Meeting

• March 6, 2024, Audit Advisory Finance Subcommittee Meeting

• April 17, 2024, Audit Advisory Finance Subcommittee Meeting

   

Motion: Mindy Menzel

Second: Monique Thompson

Discussion: None

Passed: 6-0

Aye:

Paul Numbers

Steve Apple

Mindy Menzel

Mark Sizemore

Monique Thompson

LaSonja Williams

Nay:

None

District Updates:

Evaluation Subcommittee Update:

Ms. Williams and Ms. Thompson Shared There Was Nothing to Report. 

Staffing Update:

Mr. Wright shared with the committee members that there was one candidate that declined to move forward with the interview for the Chief, Internal Board Auditor position but the district would proceed with interviewing the other candidate. He also shared with them that Board Members were advised that they could have their AAC member sit in on the interview as well. Discussion included the following:

• Total number of applicants in the beginning but only 2 of the applicants met the minimum qualifications.  

• Scheduling of the interview.

• Potential start date for the new Chief, Internal Board Auditor.

• General staffing update.

• Many vacancies have not been filled due to budget issues.

Audit Update:

Cami Sams, Executive Director, Policy, and Compliance, shared a PowerPoint presentation with the committee entitled “Internal Audit Update.” The presentation covered the MSL External Audit results year ending June 30, 2023, Internal Audit Findings, year ending June 30, 2023 and the Internal Audit Plan year ending June 30, 2024. Discussion included the following:

• Issues involving elementary schools and the need for more bookkeeper training.

• Inquiries were made about funds that are not being handed in timely to the office.

  • Those funds are possibly from fundraisers.

  • Internal Auditing having the ability to track those funds to completion.

• Corrective actions to ensure gaps are being closed.

• Improper GL coding.

  • Use of wrong codes or old codes.

  • These findings are from the Internal Audit and not the MSL Audit.

  • Audit findings are corrected.

• Ensuring everyone understands the rules that are set.

• The number items in year 2023 within an elementary school in which monies were not turned in timely to the office.

  • The committee requested the monies not turned in timely to the office be put into percentages and brought back to them.

• Full operational audits are being completed with a focus on problem areas.  

  • Clearing up issues previously found.

  • Ensuring compliance with actions given.

• Compliance initiatives have been added to the audits as of this year.

  • Ensuring that as different programs are rolled out, the district’s process is being followed.

  • Incorporating compliance within the financial portions of the audit.

• An update was given on the audits that were previously behind.

  • The district’s auditors’ ability to keep up with the audits if compliance is added.

  • Allowing the auditors to broaden their scope.

• Approximate cost of the MSL contract.

• Ensuring statutory and financial pieces are handled.

• Salary costs for the district’s 5 internal auditors versus the cost of contracting out the work.

  • The work of MSL versus the work of the district’s internal auditors.

• Differences within bookkeeper duties and responsibilities between elementary and secondary schools.

• Financial Records Analysts are responsible for training bookkeepers.

  • They step in for bookkeeper vacancies.

  • Bookkeepers turnover rate.

  • The primary function is to be out in the field.

• Anyone who is a bookkeeper must take a district test to qualify for the position.

• The average amount of funds that a bookkeeper handles.

  • System improvements over time have been implemented to assist with the amount of funds that bookkeepers must handle.

• The reviewing of Booster Clubs and PTA funds.

  • Many of those organizations are independent.

• An explanation was given on the school’s end of the year internal accounts budget process.

• The committee requested to receive the concepts of cash that are being created and the purpose of them being created.  

  • Deposits.

  • Expenditures.

• Another request was made to receive the average amount of dollars going through the bookkeeper at a school based upon the different programs.

Finance Subcommittee Update:

Ms. Menzel shared an update with the committee on the 2 meetings that have been held. The update included the following:

• Financial presentations that were shared with the committee by the district’s finance team.

• Areas of Focus.

  • Budget

  • District shortfalls.

• The AAC is more informed than the previous year.

• Long term concerns with budget shortfall.

  • Budget projections.

• The need for more subcommittee meetings.

  • Importance of the full committee understanding what is going on with the budget. 

The meeting recessed at 11:55 a.m.

The meeting resumed at 12:02 p.m.

Finance Update:

Mr. Fagan provided the committee with a financial overview based upon actuals and one based upon projections. Discussion included the following:

• Typical transfers are from capital funding.

• No defined cuts as next year’s budget is still being worked on.

• Spending more than earning.

• Using funds from transfers to offset.

• Transferring more from other sources.

• Still declining the prior year fund balance.

• The more funds taken from capital funding the less funds there are for facility projects.

• The burn rate must be right sized.

• Students migrating to Charter Schools.

  • The operating cost of keeping a building that does not have enough students.

  • Consolidating eliminates cost.

• The capital budget for sales tax.

• Charter schools taking more revenue.

  • Legislation changes that allow charters to get a portion of the funds.

• Teacher salary increase deficits.

• The loss of FTE affects the budget.

• Not budgeting at the average teacher salary.

  • The district cannot afford it.

  • Funding from vacancies can assist with the deficit.

• Budget reductions.

• Review of infrastructure.

• Fixed revenue.

• The district is taking the initiative to solve the funding problems.

• Appreciation was shared for Mr. Fagan and the AAC and the roles they have played in assisting the Board Members to understand the budget.

• Suggestions that the district review what is being spent on technology.

• An inquiry was made as to the basis of how funds are allocated for departments.

  • Creation of the department budgets.

  • Budgets go from one year to another.

• Other areas in the district’s budget that can be changed other than cutting human capital.

  • MSL cost.

  • Things that are being done that do not need to be done.

• Dr. Kriznar was commended for the work being done and the hiring of Mr. Fagan and Mr. Wright.

• Members of the public are fighting to keep their schools from closing.

• Transportation issues.

• There are painful choices to be made.

• The AAC suggested that the Board looks at a different business model to run the schools.

• Cutting cost.

• Losing students.

• Loss of district funds.

• Lobbying.

• Doing a better job with keeping students in the district because there are other choices outside of public schools that families can choose.  

• Assessment of why students are leaving the district.

  • If the district can keep the students, the money can be kept as well.

  • A committee member shared a personal experience for their student in one of Duval County Public Schools.

  • The need for student control.

  • Teachers that go to college versus those that are utilizing alternative programs to become teachers.

    • Teachers that go to college to become teachers are required to work in the classroom, which is helpful.

    • Ensuring teachers have the support and training needed.

    • It all begins with staffing.

• The Finance department will have next year’s projection for the 1-mill to share during the next meeting.

• The percentages allocated by the resolution will change.

  • If Charter allocation increases.

• Percentages can change as well based upon the property values used in the model.

  • If enough revenue is not generated.

  • If the district overspends in salaries.

  • The outcome is unknown currently.

• Funding is allocated every year for salaries.

• Mr. Fagan shared with the Board that he will try to get a copy of the allocations to share during the next meeting.

• Charter schools that are reluctant to report.

  • Sending a district letter requesting every charter school to self-report.  

  • AAC annual report.

• Sales surtax is clearly defined by statute.

• Suggestions to rewrite the resolution to give clarity on the allocations.

• Audit work to ensure funds are being spent the way they are allocated.

    

1-Mill Referendum Reporting Update:

Erika Harding, Assistant Superintendent of Operations shared an update with the committee on the 1-mill referendum reporting. The update included an at a glance, arts, and athletics project details presentation. Discussion included the following:

• The various colors used in the presentation and what they mean regarding each project.

  • Green signifies that the project is on time and on budget.

  • Red signifies that the project’s budget amount has exceeded and needs board approval.

  • Yellow signifies that the project is at risk and the estimate or proposal is slightly above the budget.

• The 1-Mill plan requires that any changes made be brought back to the board for approval.

  • Expenditures above $50,000 must be brought back to the board for approval.

• The district does not have any other plans of closing other schools other than what is already approved in the plan.

• Schools planned for closing next year.

• Final board approval based upon right sizing the district.

• The sales tax funded column on the presentation was the 1-Mill tax funded and not the sales tax funded.

• All the plans may not happen due to cost escalation. Currently a presentation is being prepared for the Board.

• The concern or responsibility for the AAC.

• Community communication concerning projects that are not going to be completed.

  • Suggestions were made that the district communicate the foreseeable things to the community.

• Projects on hold.

  • A request was made to have information about the projects presented to the Board.

  • Provide understanding to the Board about the projects.

• Policy 2.38 was read to the AAC members to provide clarity and understanding about their responsibilities and duties as a committee.

• An inquiry was made about the new IBA reviewing the budget to ensure the money is moving accordingly.

  • Ensuring that it is included in the policy.  

Governance:

• The committee discussed the onboarding of new members.

  • Seeking to find the right person to fill the current vacancy.

  • Office of General counsel shared feedback from 1st orientation.

  • It was suggested that a checklist be provided to new on-boarding members.

  • Orientation manuals.

  • It was suggested that the district notify the new Board Members as soon as possible of their responsibility to choose an individual to serve on the AAC and the Sales Surtax Committees.

  • Ensuring the potential new members have an opportunity to speak with current AAC members to provide insight.

• Creation of the committee meeting calendar.

  • Calendar alignment with budget updates.  

  • Potential meeting in May.

    • The May committee meeting is potentially when more information will be given to the AAC for staff allocations.

    • A suggestion was made that the AAC receive the budget presentation first so they can assist Board Members.

    • Potential topics for the budget presentation.

  • The next finance subcommittee meeting dates were scheduled for May 9, 2024 at 8:30 a.m. and August 14, 2024, at 2:30 p.m.

  • The next full committee meeting dates were scheduled for July 17, 2024 at 12:00 p.m.  and October 17, 2024 at 11:00 a.m.

• Elections of Committee Chair and Vice-Chair for the new year.

  • Some committee members thought that it would be best to wait until the new committee members come aboard to elect a new committee Chair and Vice-Chair.

  • The Office of General Counsel gave the approval for the elections to continue.

  • Paul Numbers nominated Mark Sizemore to become the next AAC Chair. The nomination was second by Monique Thompson. All members present agreed.

  • Paul Numbers nominated Steve Apple to continue as the next Vice-Chair. The nomination was second by LaSonja Williams. All members agreed.

     

Next Meeting:

The next meeting is scheduled for July 17, 2024 at 12:00 p.m.

Adjournment

Motion:

That the Audit Advisory Committee moved to adjourn the meeting at 1:54 p.m.

Vote Results:

Motion: Monique Thompson

Second: Mindy Menzel

Passed 6-0

Aye:

Paul Numbers

Steve Apple

Mindy Menzel

Mark Sizemore

Monique Thompson

LaSonja Williams

Nay:

None  

MA