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PSAC Helps Draft Reference Manual for School District Audits

By William J. Klohck

The Society’s Public School Accounting Committee (PSAC) in May put the finishing touches on the 2004 edition of the Reference Manual, an important State Education Department (SED) publication that helps school districts and their auditors with the annual audit process.

Each year, the SED’s Educational Management Services office enlists the expertise of the committee to help produce the Reference Manual, which includes wide-ranging discussions of both theoretical and practical aspects of issues surrounding school district audits. As noted by Marianne Van Duyne, immediate past PSAC chair, the depth and variety of experience and training offered by PSAC members, who’ve worked closely with the SED, the Office of the New York State Comptroller, the SUNY Charter Schools Institute, the State Association of School Business Officials, school districts and BOCES, make the committee a unique and ideal source of input for the manual.

Though it provides NYSSCPA members with informal views that may give them ideas for their own professional research, the Reference Manual is not intended to be all-inclusive or authoritative. Auditors working with New York’s school districts need to be familiar with professional standards.

This year’s edition of the Reference Manual comprises six main sections:

  • The narrative portion, which contains a summary update on selected accounting and auditing issues, discussion of the objectives and limitations of the audit, filing requirements and other required communications;
  • Appendix 1: Management’s discussion and analysis (MD&A);
  • Appendix 2: Sample financial statements;
  • Appendix 3: Sample notes to financial statements;
  • Appendix 4: Sample required supplementary information (RSI) and supplementary information (SI) other than MD&A; and
  • Appendix 5: Sample single audit schedules.

As the state’s school districts have phased in the implementation of GASB Statement 34, the content of recent editions of the Reference Manual has undergone significant change. The sample financial statements, notes, and RSI and SI sections have been completely revamped, and new sections, such as the sample single audit schedules and abstracts of topics discussed at PSAC meetings, have been added. New independence rules, the state Board of Regents’ record retention requirements, Yellow Book continuing professional education standards and single audit thresholds are also profiled in the manual.

“We revise the Reference Manual whenever experience suggests ways to improve accountability, or as changes in statutes, standards and regulations require procedural updates,” said PSAC Chair Barbara Williams, who added that work on the 2005 edition will begin as soon as this year’s edition is published.

Suggestions for next year’s edition can be made to any PSAC member at seminars where the Reference Manual is discussed, or e-mailed to the Reference Manual’s editor at bklohck@nysscpa.org. If changes are requested, cite the location where the change or new material is needed, briefly explain the reason for the change, and provide sample language for the revision.

Originally developed as a printed document, the Reference Manual has been updated to an electronic version, which is posted each year on the SED’s website at www.emsc.nysed.gov/mgtserv/gemsho.htm.

William J. Klohck is a partner in Klohck and Klohck, CPAs, in Gloversville, N.Y., and is a member of the Society’s Public School Accounting Committee. He has served as editor of the Reference Manual for the last several years.

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