FORT WALTON BEACH — In general, the Okaloosa County School District’s finances appear to be in good shape, according to a recently completed audit.

The Florida Auditor General’s Office identified a few issues with the district’s procedures and practices during its financial, operation and federal single audit, but overall found the “district’s basic financial statements were presented fairly, in all respects, in accordance with the prescribed financial reporting standards.”

“They’re always going to have some findings,” said Rita Scallan, the district’s chief financial officer. “ … But it’s a good audit. It shows that we are doing things as we should be.”

Read the full audit report.

The school district is audited annually, but every three years the Auditor General's Office conducts its own audit, she said. 

Fourteen issues were uncovered when finances and procedures from July 1, 2011 to June 30, 2012 were reviewed.

The most significant finding was a series of reporting errors for construction-related projects, but safeguards have since been put in place to correct it and ensure it doesn’t happen again, Scallan said.

“There was no impact to the bottom line of the financial statement,” Scallan said. “It was a matter of when the liability should have been reported.”

The district was also citied for not having a procedure for reporting fraud and not providing “evidence that ad valorem tax levy proceeds were used for authorized purposes,” the report stated.

The district is working to amend those problems as well as the other 11 issues identified, according to a response to the audit submitted by Superintendent of Schools Mary Beth Jackson.

One other issue identified in the audit was the district’s reliance on state funding for the bulk of its budget.

 “The School Board of Okaloosa County remains in stable financial condition but continues to face uncertain economic times,” the report stated. “The district’s current operations depend on state revenue sources … The primary source of state revenue is sales tax, which has demonstrated to be an unstable and unreliable revenue stream.”

Discussions in the state House and Senate indicate they plan to increase K-12 funding by more than $1 billion in the upcoming budget year because of positive signs in the economy, but it’s unclear exactly how the money will be dispersed.

Right now, Gov. Rick Scott has proposed increasing per-student funding by more than $400, but the House has a budget increasing it by $395 and the Senate has one boosting it by only $372.

The difference between the House’s proposal and the Senate’s could diminish the district’s bottom line by about $750,000, Scallan said.

The Associated Press contributed to this report.

Contact Daily News Staff Writer Katie Tammen at 850-315-4440 or Follow her on Twitter @KatieTnwfdn.