Fort Ann Central School District

Internal Controls Over Payroll and Personal Services - Introduction

Background

The Fort Ann Central School District (District) is located in the Towns of Fort Ann, Kingsbury, Granville and Hartford, Washington 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 is one school in operation within the District, with approximately 628 students and 116 employees. The District’s expenditures for the 2005-06 fiscal year were $11.5 million, which were funded primarily with State aid, real property taxes, and grants. Payroll expenditures represent a significant portion of the District’s annual expenditures. Total payroll expenditures for the 2005-06 fiscal year were approximately $4.3 million.

Objective

The objective of our audit was to evaluate the District’s internal controls over payroll and personal services. Specifically, our audit addressed the following question:

• Are internal controls over payroll and personal services 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 goal, 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 inventories. Based on that evaluation, we determined that controls appeared to be adequate and limited risk existed in most of the financial areas we reviewed. We did determine that risk existed in the area of payroll and personal services and, therefore, we examined internal controls over this area for the period July 1, 2005 to April 18, 2007.

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

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.