Background

The Holland Patent Central School District (District) is located in the Towns of Deerfield, Floyd, Marcy, Remsen, Steuben, Trenton and Western within Oneida County and the Town of Russia located in Herkimer County. The District is governed by the Board of Education (Board) which comprises five 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 did not establish the position of claims auditor until the beginning of the 2006-07 school year; therefore, it was responsible for auditing and approving claims against the District for the 2005-06 school year.

There are four schools in operation within the District, with approximately 1,740 students and 280 employees. The District’s operating expenditures during the 2005-06 fiscal year totaled approximately $22.5 million funded primarily with State aid and real property taxes.

Objective

The objective of our audit was to answer the following question:

• Are internal controls over the claims audit function appropriately designed and operating effectively to adequately safeguard district assets?

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, 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: financial oversight, cash receipts and disbursements, purchasing, and payroll and personal services. 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 audit of claims area and therefore, we examined internal controls over the claims audit function for the period July 1, 2005 to April 30, 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 and Corrective Action

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.

The Board has the responsibility to initiate corrective action. Pursuant to Section 35 of the General Municipal Law, Section 2116-a (3)(c) of the Education Law and Section 170.12 of the Regulations of the Commissioner of Education, the Board must approve a corrective action plan that addresses the findings in this report, forward the plan to our office within 90 days, forward a copy of the plan to the Commissioner of Education, and make the plan available for public review in the District Clerk’s office. For guidance in preparing the plan of action, the Board should refer to applicable sections in the publication issued by the Office of the State Comptroller entitled Local Government Management Guide.