"This year was a challenging audit, but we got it done," said J.J. Griego, owner of Griego Professional Services, a private auditing firm from Albuquerque that wrote the report.
Griego presented the report for fiscal year 2011 to 2012 to the district school board Thursday evening in Kirtland.
The district spent about $87 million last year, about $39 million of which was funded federally. The remainder came from other sources, including state and local funds.
The district was scheduled to turn over its information by August last year, though it did not do so until late October.
The state auditor's office deadline for audits is Nov. 15, a deadline that cannot be met if information is turned in any later than August, Griego said. Compiling an audit can take between 400 and 500 hours, he said.
The district attributed its lack of timeliness to high turnover in its finance department during the past fiscal year.
The department hired a new finance director and filled five positions that had been vacant after the previous director resigned, according to district spokesman James Preminger. He said that several other employees in the department also left.
"We are only fully staffed now," Preminger said, noting that the department did not fill all of its positions until late last month.
Preminger said that the district's decision to move the business office from Kirtland to Shiprock upset many of the employees in the department and resulted in resignations. The office moved to Shiprock from May to July 2011.
Still, the district has admitted in recent months that the amount of turnover among administrators has been unusually high recently, which some employees have attributed to low morale. The regional representative from the National Education Association in February told The Daily Times that, as a former employee, she believed employees were leaving because they felt threatened.
Whatever the reason, the turnover made gathering information more difficult this year.
"It's just a matter of getting it all together," Griego said.
Aside from poor timing, the audit report also noted that the district spent about $81,700 more than was in its budget last year.
"We have the money in our budget," Preminger said, explaining that it was not a lack of funds that was the problem.
Instead, when staff used money from one fund to cover expenses in another, they failed to transfer the funds correctly before they spent the money.
"The district did not make the appropriate budgetary adjustment requests and transfers to alleviate possible over-expenditure within functions prior to the year-end," the report stated.
Auditors recommended that the district review its budget at the end of each year and make necessary budget adjustments before the audit is conducted.
Additionally, three-quarters of travel expenses were miscalculated, leading to about $200 in errors.
The miscalculation came from a flaw in the district's policy, which had a greater reimbursement rates for in-state and out-of-state travel than is required by law.
One out of every 25 deposits was not deposited within 24 hours, which also is required by state law to prevent the mismanagement of funds. The total amount of funds not deposited in a timely manner was about $1,600.
The report did note that the district improved several deficiencies, including the issuing of bonuses, disbursements, payroll and documentation of payroll. Several of the deficiencies were repeats from last year, including the issues of timing of the report, travel expenses and spending more than was budgeted.
The board was made aware of the report and its contents in February, though it was not made aware that the audit report's process had been delayed.
Jenny Kane can be reached at email@example.com; 505-564-4636. Follow her on Twitter @Jenny_Kane