Moravia Central School District

Internal Controls Over the Computerized Business Management System
Introduction

Background

The Moravia Central School District (District) is located in the Towns of Moravia, Niles, Sempronious, Summerhill, Venice, and Locke in Cayuga County and the Town of Skaneateles in Onondaga County and the Town of Lansing in Tompkins 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 two schools in operation within the District, with approximately 1,100 students and 160 employees. The District’s expenditures for the 2006-07 fiscal year were $16.9 million, which were funded primarily with State aid, real property taxes and grants.

The District has been using a computerized business management system for more than 12 years. The system is distributed by one vendor and offers five financial/personnel modules. The District subscribes to four of the modules (general financial management, personnel/staffing, payroll, and administrative) that are based on two different operating systems.

Objective

The objective of our audit was to examine controls relating to financial system software information. Our audit addressed the following related question:

• Are internal controls over the District's computerized business management system designed appropriately?

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 computerized business management system and, therefore, we examined internal controls over this system for the period June 1, 2006 to May 31, 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

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.