Iroquois Central School District

Internal Controls Over Purchasing -
INTRODUCTION

Background

The Iroquois Central School District (District) is located in the Towns of Aurora, Elma, Lancaster, Marilla, and Wales in Erie County and the Town of Bennington in Wyoming 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 are six schools in operation within the District, with approximately 2,900 students and 475 employees. The District’s budgeted expenditures for the 2006-07 fiscal year were $35 million, funded primarily with State aid, sales tax, real property taxes and grants.

The Board designated the Business Administrator and the Superintendent as the purchasing agents. The purchasing agents are responsible for administering all purchase activities. The Board’s adopted purchasing policy governs District purchasing and related activities.

The District’s purchasing process begins when an employee submits a purchase requisition to a department head for approval. Once approved, the requisition is sent to the Business Office with appropriate backup, such as quotes from vendors, for approval. Business Office personnel review the requisition and supporting documentation to ensure that it is complete and has the correct budget code. The requisition is then reviewed and approved by the Business Administrator, acting as the purchasing agent. Once approved, a purchase order is generated. Generally, approved purchase orders are also submitted to the Superintendent for his signature.¹ Once signed by the Superintendent, the purchase order is sent to the vendor.

Objective

The objective of our audit was to evaluate internal controls over the purchasing function. Our audit addressed the following related question:

• Are internal controls over the purchase of goods and services, subject to competitive bids and quotations, appropriately designed and operating effectively?

Scope and Methodology

We examined internal controls over purchasing for the Iroquois Central School District for the period July 1, 2006 to September 7, 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 that 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.
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¹ Purchase orders for items such as utilities are not sent to the Superintendent. In addition, if the Superintendent is absent, the purchase orders are sent to the vendor without the additional signature.