Clifton-Fine Central School District Internal Controls Over Selected Financial Operation- Executive SummaryThe Clifton-Fine Central School District (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 District’s chief executive officer of the District and is responsible, along with other administrative staff, for day-to-day District management under the Board’s direction. On an annual basis, the Board appoints a claims auditor who assumes the Board’s powers and duties in regard to approving or denying claims against the District. The District contracts with the St. Lawrence-Lewis BOCES (BOCES) for a variety of instruction and finance related services through a shared services agreement. The BOCES shared Business Office processes the District’s financial transactions. The shared Business Office uses a separate software program to print District checks. The District does not have a centralized information technology department. Scope and ObjectivesThe objectives of our audit were to examine the District’s internal controls relating to cash disbursements and the adequacy of various adopted Board policies for the period July 1, 2005 through September 30, 2006. Our audit addressed the following related questions:
Audit Results We found deficiencies in the internal controls over cash disbursements that could result in errors or irregularities occurring, and remaining undetected and uncorrected. The Superintendent, who also serves as the Treasurer, did not maintain adequate control over the use of his signature during the check-signing process. We found 77 checks, totaling $50,956 that were issued without the Treasurer’s signature. It appears that six of these checks were returned by the vendors, while 71 of the checks were cashed by the vendors and cleared by the District’s bank. Further, the check-printing program in use at the BOCES facility allows duplicate checks to be produced without a corresponding entry in the accounting records, and accounting personnel did not obtain and review the images of both sides of cancelled checks. The Board has adopted formal written policies relating to travel reimbursement, procurement and capital asset management. However, the policies do not provide clear guidance for meeting Board expectations. The travel policies do not include a definition of allowable and unallowable expenses, documentation requirements (such as itemized receipts) and maximum costs for meals and lodging. We also found the procurement policy does not indicate which goods and services should be purchased based upon written request for proposals (RFP), written quotations or verbal quotations, and the number of proposals or quotes that should be sought; and the capital asset policy does not establish a minimum value for inventory and record keeping purposes. 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 indicate they planned to initiate corrective action. The Board has the responsibility to initiate corrective action. Pursuant to Section 35 of the General Municipal Law, Section 2116-a (3)(c) of the Education Law and Section 170.12 of the Regulations of the Commissioner of Education, the Board must approve a corrective action plan that addresses the findings in this report, forward the plan to our office within 90 days, forward a copy of the plan to the Commissioner of Education, and make the plan available for public review in the District Clerk’s office. For guidance in preparing the plan of action, the Board should refer to applicable sections in the publication issued by the Office of the State Comptroller entitled Local Government Management Guide. |