An audit of the Upper Perkiomen School District during the 2015-2016 school year discovered two material weakness and one significant deficiency.

                However, the process identified no fraudulent behavior by district officials, according to William Gorman Jr., president of Gorman & Associates, P.C., the Northampton firm that conducted the audit.

                Gorman appeared at last week's public school board meeting to discuss the report submitted in December. He said district officials have implemented plans to correct the issues.

                Following his Feb. 23 presentation, Gorman expressed confidence that administrators would rectify those situations.

                During the meeting, Gorman told the elected officials that the district's financial statements were in compliance with general accepted accounting principles and the district is following all the required federal regulations. The audit found nothing to indicate the district was not in compliance with the state laws related to public schools, Gorman said.

                He disputed an accusation by Keith Knauss, an award winner from the Pennsylvania Freedom of Information Coalition and a self-described advocate of government transparency, that district officials were utilizing "fictional budgeting" to justify unnecessary tax increases.

                "There's no fictional accounting going on here," Gorman said standing outside the meeting room door. "I did not discover any material fraud."

                School officials are making the corrections to the issues identified in the audit, according to Sandra Kassel, the district's business administrator.

                The report identified issues of material weakness as a deficiency, or 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 and includes issues related to the district's accounting system and food service fund.

                On April 1, district officials changed over to a new accounting system. The shift, made in the middle of fiscal year caused major problems in forwarding information from the old system.  The old system was Tenex, the new system is Skyward, according to the report.

                It states that to complicate matters further, the one person who was trained on the new system, the assistant business manager, left the employment of the district before these issues had been resolved.

                District officials expect to complete the transition by April 1, according to Superintendent Alexis McGloin.

                She called the conversion, which incorporates the district's payroll and human resources information, a huge undertaking.

                According to Gorman, the district's new vendor needed three attempts to correctly transfer the necessary data to school officials.

                District officials had relied on Tenex since 1986, according to McGloin. She said the software was updated periodically.

                The other material weakness involved the district's food service fund. Preliminary estimates showed a surplus of $553,517.  But, the audit discovered a deficit of $21,794. Gorman attributed the discrepancy to incorrect coding.

                The report suggests that the new assistant business manager, along with the food service director, monitor the financial reports of this fund on a monthly basis to ensure all transactions have been properly coded and posted in the computer system.

                The significant deficiency, identified as deficiency, or 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, involves the reconciliation of multiple bank accounts to the books.

                The audit discovered transfers between the General Fund and Payroll Fund accounts were not being recorded.

                "Only the disbursements from the payroll bank account were being recorded," the report states. "In addition, the Univest Bank account was not properly reconciled to the records maintained by the financial reporting software system."