SCS audit reveals millions in underreported assets - WMC Action News 5 - Memphis, Tennessee

SCS audit reveals millions in underreported assets

An audit of Shelby County Schools revealed millions of dollars in underreported assets went undetected for years.

The Shelby County Commission will discuss this audit Wednesday.  It revealed the county school system understated $4.2 million in assets and General Fund balances in years prior to 2007, but the Shelby County School Board did not detect it until last June.

To fix the misstatement, county schools dug into reserves to balance last year's budget.

A firm hired by county schools completed the audit last December, but the audit is surfacing now amid the contested Memphis and Shelby County Schools merger.

The report states that at the time of the misstatement, school management changed "without the carryover of information."

The audit does not detail what led to the underreporting of assets, but only says the misstatement involved the "Cafeteria Fund."

The audit does refer to a separate letter sent to the county school board on December 8 that "noted certain other matters," but that letter was not included in the audit.

The audit also revealed two troubles SCS faces: recruiting and maintaining highly qualified staff, and meeting No Child Left Behind standards.

Overall, the audit says county schools complied with Government Auditing Standards.  County Schools has now implemented a system to detect misstatements.

To read the entire Shelby County Schools audit, click here.

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