Mount Markham Central School District

Internal Controls Over Cash Disbursements - Introduction

Background

The Mount Markham Central School District (District) is located in the Towns of Columbia, Frankfort, Litchfield, and Winfield in Herkimer County; Towns of Bridgewater and Paris in Oneida County; Town of Brookfield in Madison County; and Towns of Edmeston, Exeter, Plainfield, and Richfield in Otsego 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 three schools in operation within the District with approximately 1,350 students and 250 employees. The District’s budgeted expenditures for the 2006-07 fiscal year were approximately $19.4 million which were funded primarily with real property taxes, State and federal aid.

The Business Office staff consists of the Business Administrator, the Treasurer and an account clerk. They are responsible for maintaining the District’s financial accounting records and reports and processing the District’s cash receipts and disbursement, purchasing, accounts payable and payroll. In addition, on an annual basis the Board appoints a claims auditor.

Objective

The objective of our audit was to examine the District’s internal controls over cash disbursements. Our audit addressed the following related question:

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

Scope and Methodology

We examined internal controls over cash disbursements of the District for the period July 1, 2005 to February 28, 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.