Background

The Bedford Central School District (District) is located in the Towns of Bedford, Mount Kisco, New Castle, North Castle and Pound Ridge, Westchester County. The District is governed by the Board of Education (Board) which comprises seven elected members. The Board is responsible for the general management and control of the District’s financial and educational affairs. The Superintendent of Schools (Superintendent) is the chief executive officer of the District and is responsible, along with other administrative staff, for the day-to-day management of the District under the direction of the Board.

There are seven schools in operation within the District, with approximately 4,400 students and 800 employees. The District’s budgeted expenditures for the 2006-07 fiscal year were $105 million, funded primarily with State aid, real property taxes and grants.

One of the Board’s managerial responsibilities is the establishment of a system of internal controls designed to provide reasonable assurance that District assets are properly safeguarded and purchases are made in accordance with District policy. Furthermore, an effective system of internal controls provides for the segregation of duties so that no single individual controls all phases of a transaction. When it is not practical to segregate duties because of limited staff resources, the Board should establish compensating controls. A good system of internal controls should also provide for the timely identification of errors and/or irregularities which may have occurred so that corrective action can be taken. Once established, the Board has the responsibility to monitor them periodically to ensure that they are operating properly.

Objective

The objective of our audit was to review the District’s controls over cash receipts and disbursements. Our audit addressed the following question:

• Are internal controls over cash receipts and disbursements appropriately designed and operating effectively?
  

Scope and Methodology

Our overall goal was to assess the adequacy of the internal controls put in place by officials to safeguard District assets. To accomplish this, we performed an initial assessment of the internal controls so that we could design our audit to focus on those areas most at risk. Our initial assessment included evaluations of the following areas: cash receipts and disbursements, purchasing, payroll and personal services, and capital assets and consumable inventories. Based on that evaluation, we determined that controls appeared to be adequate in most of the financial areas with the exception of cash receipts and disbursements which had a limited risk. Therefore we concentrated our audit efforts on controls over cash for the period July 1, 2005 to December 15, 2006.

We conducted our audit in accordance with generally accepted government auditing standards (GAGAS). More information on such standards and the methodology used in performing this audit are included in Appendix B of this report.

Comments of District Officials and Corrective Actions

The results of our audit and recommendations have been discussed with District officials and their comments, which appear in Appendix A, have been considered in preparing this report.