Fabius-Pompey Central School District Internal Controls Over Selected Financial Operations - Executive Summary

The Fabius-Pompey 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.

On an annual basis, the Board appoints a claims auditor who assumes the Board’s powers and duties of approving or denying claims against the District. Responsibilities relating to the District’s finances, accounting records and reports are largely those of the Business Administrator and the Treasurer.

Scope and Objective

The objective of our audit was to examine the District’s internal controls relating to payroll, procurement, the claims audit function, and capital assets for the period July 1, 2004 to June 30, 2005. Our audit addressed the following related questions:

  • Have District officials designed and implemented effective internal controls over payroll processing to ensure that payments are properly authorized and supported?

  • Did the Board implement and monitor adequate internal controls relating to the District’s procurement procedures and the claims audit function?

  • Did the Board implement and monitor adequate internal controls over capital assets?

Audit Results

We found instances where the Board had either not established important internal controls or controls that had been established were not implemented and operating effectively. As a result, the District has an increased risk of errors and/or irregularities occurring and not being detected.

The District needs to improve controls over its payroll process. The District made an advance salary payment to a long-term substitute teacher that was contrary to Education Law. We also found no Board authorization for the salaries or wage rates paid to four employees, errors in recording leave time, and instances of some employees exceeding their available leave balances.

The District did not always comply with competitive bidding requirements and the Board’s procurement policy provided little guidance on what actions District personnel should take when procuring goods and services that fall below the dollar thresholds for competitive bidding. In addition, the claims auditor and deputy claims auditor had other responsibilities that were not compatible with their claims audit duties and they reported to the Business Administrator rather than reporting directly to the Board. The Board’s written policy for the claims auditor provides limited direction on what the claims auditor should look for when auditing claims. Our review of 88 claims totaling about $390,000 disclosed three purchases that the District did not competitively bid; however, we found no significant deficiencies in the other claims we examined.

In addition, District officials did not enforce the District’s capital asset policy and ensure that the District’s capital assets are protected from loss by conducting annual physical inventories, and by maintaining complete and accurate inventory records. These deficiencies illustrate poor accountability over capital assets and increase the risk of loss or misuse of these assets.

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.

Complete Audit in PDF