Board of Education releases statement regarding recently released audit findings

March 22, 2024

The following statement was released by the Smith County Schools Information Team:

With the 2023 audit report for the Office of Director of Schools being released on March 19, 2024, the General Purpose fund balance was not mentioned in the posts shared on social media. For the sake of full transparency, the audit reported our General Purpose Fund Balance as of June 30, 2023, at $10,937,297.  

In response to audit finding 2023-001 DEFICIENCIES WERE NOTED IN AMOUNTS REPORTED AS COMPENSATION FOR THE DIRECTOR OF SCHOOLS TO THE TENNESSEE CONSOLIDATED RETIREMENT SYSTEM, we contacted TCRS as instructed, received guidance, and have moved forward with their recommendation.

In response to audit finding 2023-002 THE SCHOOL DEPARTMENT WAS ASSESSED A PENALTY OF $59,509 BY THE INTERNAL REVENUE SERVICE FOR NONCOMPLIANCE WITH THE AFFORDABLE CARE ACT.  In 2014, the Board met in a special-called meeting to discuss the Affordable Care Act. A significant study was conducted and all budgetary items were considered. The Board, at that time, decided that they could not feasibly expand medical coverage for all employees without asking for a tax increase and amended the budget to cover potential costs for the assessment of the penalty.  In order to be in compliance with the Affordable Care Act and remove the finding, The Board of Education will discuss providing medical insurance for full-time, non-certified employees at the April board meeting with an estimated cost of $1,600,000 annually.

In response to audit finding 2023-003 MATERIAL AUDIT ADJUSTMENTS WERE REQUIRED FOR PROPER FINANCIAL STATEMENT PRESENTATION, $714,481 was referenced in the finding, with specific mention to property tax receivables.  All property tax revenue was fully and completely posted in our books for 2023; however, audit did ask that the balance sheet be updated to classify the revenue in parts as property tax receivables, allowance for uncollectible taxes, deferred current taxes, deferred delinquent taxes, and current property tax.  Moving forward property tax receivables will be classified as instructed in order to be in compliance with audit.

There has been some public comment about the management’s lack of response to the audit report. According to audit regulations, a management’s response is not mandatory.  We were required and did submit a Corrective Action Plan detailing a plan to correct any findings.

Mr. Smith and the Board of Education share the same financial plan:  manage spending so that we are financially prepared to support the district’s strategic plan.  This approach ensures that financial resources are allocated in a manner that best serves the needs and objectives of our system and are used efficiently to benefit students, staff, and the community as a whole, all while not asking the County for any tax increase.

If you have any further questions, feel free to reach out to our CFO, Norma Mitchell  at