The Elba 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 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.

The District operates its Business Office with four people, who process transactions using a computerized financial management system. The Superintendent performs the duties of a business manager and also serves as purchasing agent by authorizing purchases. The Treasurer, in addition to disbursing District funds, is responsible for recording and reporting financial activities. The Board did not establish the position of claims auditor; therefore, it was responsible for auditing and approving claims against the District.

Scope and Objective

The objective of our audit was to determine if District officials were properly safeguarding financial resources. Our audit addressed the following related questions for the period July 1, 2004 to June 30, 2006:

• Are internal controls over procurement appropriately designed and operating effectively to adequately safeguard District assets?
  
  
• Are internal controls over claims processing appropriately designed and operating effectively?

Audit Results

The District did not have adequate internal controls over procurement and claims processing. The Board had not adopted a procurement policy until December 12, 2005, had not appointed a claims auditor, and had not taken steps to ensure that it adequately audited claims before they were paid. In addition, we noted a variety of weaknesses in the adopted procurement policy. Our review of vendor claims disclosed deficiencies with receiving reports, purchase requisitions and purchase orders. We also found that the accounts payable clerk performed incompatible duties without compensating controls.

Comments of Local 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.