The Gananda Central School 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 has a payroll clerk who is responsible for processing District payroll transactions. In addition, the Board has appointed a claims auditor to audit and approve claim vouchers for payment. The District’s information technology system is used to process financial and student data.

Scope and Objective

The objective of our audit was to examine the District’s internal controls over payroll, claims processing and information technology for the period July 1, 2005 through October 12, 2006. Our audit addressed the following related questions:

• Are internal controls over the payroll process appropriately designed and operating effectively?
  
  
• Are internal controls over the District’s claims auditing function appropriately designed and operating effectively?
  
  
• Has the District established internal controls to ensure that information technology assets are properly safeguarded?

Audit Results

We found the recordkeeping and processing functions for payroll are under the control of a single individual, and no one reviews that individual’s work for accuracy. In addition, the claims audit position is not effective because the claims auditor does not thoroughly audit each claim. As a result, there is an increased risk that inappropriate transactions could occur and not be detected in a timely manner. We also found the Board has not effectively addressed the safeguarding of computerized data by establishing appropriate control policies and procedures. Adequate and deliberate protection of such data is necessary for District operations to proceed smoothly.

Comments of School 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.