By Marcia Barnes
Staff Writer
Clay County School Board of Education meeting on Monday, Feb. 23 wrapped up with audit findings, budget amendments and an approval for changes in the 2026/2027 school calendar.
The audit presentation by Alan Thompson, of Thompson, Price, Scott, Adams and Co., PA was given via the Internet. The audit reported no findings or questioned costs related to federal awards or state awards. The board received its Schedule of Findings and Questioned costs for the fiscal year ending June 30, 2025 as part of the annual independent financial audit.
The report included two financial statement findings. The first finding, 2025-01, identified as a significant deficiency and instance of noncompliance, involved the omission of required pre-audit certification language on checks issued during the first three months of the fiscal year.
North Carolina General Statute requires that all checks issued by a local school administrative unit contain specific pre-audit language on the face of the check. During the 2024 fiscal year, the district transitioned to a new financial software system. Due to differences in how the new system was configured, the required language was inadvertently left off checks issued at the beginning of the year.
District officials corrected the issue in Sept. 2024 by modifying the check printing process to ensure that all checks include the required statutory language. The board agreed with the finding and implemented corrective action at that time.
The second finding, 2025-02, identified as a material weakness and instance of noncompliance, involved expenditures exceeding appropriations in certain funds. State law requires that no obligation be incurred unless it has been properly appropriated in the adopted budget ordinance and sufficient funds remain available within that appropriation.
The audit reported that the General Fund exceeded appropriations in Operational Support Services by $55,087 and in Financial and Human Resources by $114. District officials indicated that these smaller overages were related to fiscal year-end payables and receivables that were not fully estimated at the time final budget amendments were prepared.
In addition, the Capital Outlay Fund reported expenditures exceeding appropriations by $14,899,298. This amount was related to the new middle school construction project, which was funded by Clay County using lottery funds. While the project was funded externally, it was not incorporated into the board's adopted budget ordinance as required.
The board agreed with the findings and stated that procedures will be strengthened to more closely monitor year-end estimates and to ensure that all capital projects, including those funded by external sources, are properly reflected in future budget ordinances.
Chief Financial Officer Shelley Hollingsworth submitted reports to the board on budget amendments for the Federal Grants Fund, the State Public School Fund and the Capitol Outlay Fund. The $36,619,527.86 in the Capitol Outlay Fund Amendment Notes reflects the Needs Based Grant for the new Hayesville Intermediate School.
Hollingsworth said, “We have to show it as an asset. We don't owe money back to the State.”
Changes that were approved by the board in the school calendar in a Dec. 2025 regular meeting moved a teacher and all staff day to March 13 making it a no-school day for all Hayesville students.
The board unanimously approved the 2026/2027 school calendar. The first day of school will be Monday, Aug. 24 with the last school day on June 2, 2027.
The next meeting will be held at 6 p.m. Monday, March 23.