The Lewiston-Porter Central School District (District) is governed by the Board of Education (Board) which is comprised of 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 Board is responsible for establishing internal controls to provide reasonable assurance that District assets are properly safeguarded and purchases are made in accordance with District policy.

Scope and Objective

The objective of our audit was to evaluate internal controls over the District’s cash receipts and disbursements function to ensure that District assets were properly safeguarded. Our audit addressed the following question for the period July 1, 2005 to November 1, 2006:

• Are internal controls over cash receipts and disbursements appropriately designed and operating effectively to adequately safeguard district assets?

Audit Results

Internal controls over cash receipts and disbursements were not appropriately designed or operating effectively. The District has not adopted written policies for cash receipts and disbursements or provided job descriptions to the employees involved. The District also has not properly segregated critical duties so that no individual controls all phases of a transaction. For example, access rights to the financial software are not appropriately limited, there is no formal wire transfer process, and many financial activities are concentrated with the Treasurer.

We also found the Board appointed a clerk in the Business Office to serve simultaneously as the claims auditor. It is unclear if the clerk, acting as claims auditor, reports directly to the Board, or if she reports to the Treasurer and Assistant Superintendent for Business (who is also the interim Superintendent of Schools). The Board has not prepared a written job description for the claims auditor, nor has the claims auditor received any training. Although the clerk audits the claims, the Board members authorize payment upon their approval of the claim warrants. If it is the intent of the Board to approve claims, the claims must be provided to, and reviewed by, the Board.

The access that individuals have to the financial accounting system, combined with the lack of segregation of duties and independent review, results in an increased risk that errors or irregularities could occur and remain undetected and uncorrected.

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 that they have already initiated or plan to take corrective action.

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Complete Audit in PDF