Woodland Park needed extra time to compete its FY24 audit (school year 2023-2024), and shortly after the allowed 60 day extension was up, filed it with the state on March 3rd. They posted it to their website Friday, hours after Ken Witt submitted his resignation. When you read through the auditor’s findings, one wonders if there was a connection between those two events?

Click here to access the audit at the district’s website (it’s the WPSD 23.24 document).

WPSD received a Qualified Opinion on their Audit. What is that?
According to the Motley Fool, “A qualified opinion is an auditor’s declaration that there is an area of uncertainty in an [organization’s] financial statements.”

There are many uncertainties cited by the District’s auditor Hoelting & Company. These uncertainties vary in their severity. Per the Internal CPA Review, they are classified as:

• Material Weaknesses–A deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis.
  
• Significant Deficiencies–A deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

In summary, the District administration has committed dozens of egregious errors and/or failed to control financial reporting processes to the extent that fraud is quite possible and the district’s financial stability is facing a significant risk.

What does this mean?

An audit that uncovers this many errors and lack of controls usually receives a less favorable opinion.

The auditor Hoelting & Co. states on pg. 58 of the audit, “Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, status, regulations, rules, and provisions of contracts or grant agreements applicable to WPSD…”

So what happened?

In that design, management, and specifically Ken Witt, Aaron Salt, and their oversight of the financial and administrative processes has failed to the extent that district finances are at risk.

Below is a list of “conditions” which led to this Qualified Opinion, as listed in Section II, pg. 61, titled “Financial Statement Findings”:

1. The District was unable to reconcile and close its books in a timely manner.
2. Assets, liabilities, equity, revenue, and expenditures all contained material errors that
   were not detected by management.
   
3. Lack of supervision, training and resources within the business services department.
   
4. The District does not have the proper controls, processes, or personnel in place to analyze, adjust, or independently review account balances prior to audit field work.
5. The District did not require all “P-Card” (Purchase Card) holders to turn in support other than a receipt, such as expenditure form indicates what line item is effected.
6. The business services department was not able to provide adequate support for credit card purchases.
7. Lack of controls over P-Card usage, increasing the risk of error or fraud.
8. The District could not provide detailed documentation to show who attended trainings and how it complied with District policies.
9. Lack of control over district travel, increasing the risk of fraud or abuse.
10. The District was unable to reconcile grants that flowed from CDE to the FDW.
11. The District was unable to balance grant revenues and expenditures.
12. 12 grants that did not reconcile the CDE FDW, Twenty-seven state and federal rewards that did not balance, over ten grants were not properly reviewed for deferred revenue, and nine grants that showed collective receivables exceeding one million six hundred
    thousand dollars that could not be substantiated.
13. Grant revenues, expenditures, and receivables were materially misstated.
14. The District did not timely complete bank reconciliations. In some cases, for over 6 months.
15. There is lack of controls over cash, increasing the error of risk and fraud.
16. The District did not record pupil activities within its general ledger software.
17. The Pupil Activity Fund was materially misstated.
18. The District has not correctly recorded BOCES flow through revenue.
19. The District did not account for a material amount of revenue that was received from BOCES.
20. The District general ledger did not agree to the final reconciliations with its component unit, nor did it reflect the proper accruals which led to significant audit adjustments due to a lack of controls over component unit accounting.
21. The District made multiple material journal entries that were erroneous and required substantial work from the audit team to trace and reverse.
22. There is a lack of controls over review for journal entries, increasing the risk of error or fraud.
23. The District was not in compliance with CDE reporting requirements.
24. A lack of controls exists over grant reporting to CDE constituting both a material weakness and material non-compliance over the financial statements.
25. The district did not accurately account for salaries that should have been accrued.
26. The District does not have an effective process in place to ensure salary accruals are recorded or reconciled in a timely manner.
27. The District did not accurately reverse sales tax accruals or record the year-end sales tax accruals.
28. There is not a system of controls in place related to sales tax revenue and receivables.
29. The amounts recorded as debt services payments for interest and principal were not correct at year end.
30. Insufficient controls over posting debt services activity.
31. Controls over recording investment revenue were not followed. The District did not accurately record interest revenue that was received throughout the year.
32. Fixed asset additions were materially overstated.
33. The District did not timely file the annual financial report and the field report did not agree to the general ledger. There is a material weakness in internal controls over grant
    reporting to the CDE.
34. The District was unable to reconcile and close its books in a timely manner.

It is the District administration’s job to oversee hiring qualified financial staff and to exert sufficient controls and redundancies so as to avoid catastrophic errors like those listed above. When the majority of the Board of Education voted to extend the remarkably unqualified Superintendent Ken Witt’s contract in 2024 without a performance review, President Mick Bates stated that Witt’s “values” aligned with the Board’s. The BOE shares Witt’s values of negligence, inability to lead, ideological indoctrination instead of education, and sheer inability to lead. The current BOE and administration continues to masquerade as a group of classic conservatives who actually proffer a radical progressive agenda that sacrifices ethical and professional standards for ideological and religious ends.