Guilderland Central School District

Internal Controls Over Financial Activities - EXECUTIVE SUMMARY

The Guilderland Central School District (District) is governed by the Board of Education (Board) which comprises nine 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 Board designated the Assistant Superintendent for Business as the Purchasing Agent for the District. Under the general supervision of the Superintendent, the Purchasing Agent is responsible for administering purchase activities. In April 1998, the Board adopted a purchasing policy that governs District purchasing and related activities. The Supervisor of Finance/Treasurer (Treasurer) oversees the District’s daily business operations (including the cash receipts and disbursements functions) and supervises Accounting Department employees.

Scope and Objective

The objective of our audit was to determine if controls over financial operations were appropriately designed and operating effectively for the period July 1, 2005 through December 12, 2006. Our audit addressed the following related questions:

• Are internal controls over cash receipts and disbursements appropriately designed and operating effectively to adequately safeguard District assets?
• Are internal controls over the payment for unused leave appropriately designed and operating effectively to adequately safeguard District assets?
• Are internal controls over purchasing appropriately designed and operating effectively to adequately safeguard District assets?
• Does the design of information technology controls safeguard computerized data to minimize the loss of essential data?

Audit Results

We found there is insufficient segregation of duties in the internal controls over cash receipts and disbursements, which increases the risk that District assets may be susceptible to theft, misuse, or abuse and that errors might occur and go undetected.

Also, District officials have not established policies and procedures to ensure that all leave buyout payments are made in accordance with collective bargaining agreements. We determined that during the 2005-06 and 2006-07 fiscal years, the District paid 16 employees, including instructional and non-instructional staff, a total of $32,368 for unused vacation leave upon separation from the District, even though these payments were not authorized in the respective collective bargaining agreements.

We found that the internal controls over purchasing were appropriately designed and generally operating effectively. However, District officials did not always follow the policy for providing meals and refreshments at events. During the audit period the District spent approximately $16,700 to provide meals and refreshments at various District events. We determined that for 29 of 39 District sponsored events the District did not comply with its own policy for providing food. This practice resulted in expenditures of approximately $7,300 for meals and refreshments that were not in compliance with District policy.

Finally, we found that the District has not developed a formal disaster recovery plan for its computerized data. Thus, the District’s computerized data is at risk in the event of a disaster or severe computer system malfunction.

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.