The Cheektowaga-Sloan Union Free School District (District) is governed by the Board of Education (Board) which comprises seven 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. Some administrators perform multiple tasks for the District. For instance, the Business Administrator also serves as the District’s purchasing agent.

Scope and Objective

The objective of our audit was to evaluate internal controls over the District’s claims processing function to determine if District assets are properly safeguarded. Our audit addressed the following question for the period July 1, 2005 to September 27, 2006:

• Are internal controls over the claims processing function appropriately designed and operating effectively to ensure that claims are adequately supported and audited prior to payment and that payments are made only for appropriate District purposes?

Audit Results

Internal controls over the District’s claims processing function are not appropriately designed and operating effectively. The Board’s audit of claims consists only of reviewing and approving a listing of claims (warrant) prepared by the Business Office. Board members do not review each claim to ensure that proper original documentation, such as quotes, purchase orders, receiving slips, or invoices, are attached to the claim and are adequate to approve the claim for payment.

Our testing further disclosed that 12 claims, totaling $103,910, lacked documentation to indicate that District officials were complying with the District’s procurement policy. In addition, the District purchased athletic uniforms and coats, costing $3,540, from a business operated by one of its employees. The District’s purchasing manual states that, “an acquisition from a business in which an employee has an interest is prohibited unless full disclosure of the background facts is presented in writing to the purchasing office.” There was nothing found to indicate that the employee filed a disclosure with the purchasing office.

Furthermore, three claims totaling $22,869 for cafeteria food lacked proper documentation to substantiate the purchases. The invoices from the vendor were not attached to the claims but were kept at the District cafeteria. The Business office paid the bill based on the information on the purchase order rather than the invoices and shipping receipts. Finally, the District paid a claim of $16,500 to a vendor for long-distance classroom learning before the services were provided to the District, and no written contract for such services was found on file.

Comments of District Officials

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. District officials generally agreed with our recommendations and indicated they planned to initiate corrective action.