Background

The Northern Adirondack Central School District (District) is located in the Towns of Ellenburg, Altona, Beekmantown, Chazy, Clinton, Dannemora, Mooers, Saranac, and Bellmont within Clinton and Franklin Counties. 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 200 employees. The District’s budgeted general fund expenditures for the 2005-06 fiscal year were approximately $15.2 million, funded primarily with State aid, real property taxes and grants.

During the 2005-06 fiscal year the extra-classroom activity fund recorded more than $387,000 in receipts and disbursements. Responsibilities related to the accounting for these funds are largely those of the District’s Central Treasurer, who is appointed by the Board.

Objective

The objective of our audit was to determine whether the District’s internal controls over cash receipts and disbursements were adequate. Our audit addressed the following related questions:

• Are internal controls over the extra-classroom activity fund appropriately designed and operating effectively to 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 the District’s 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: cash receipts and disbursements, purchasing, payroll and personal services, capital assets and consumable inventories, and information technology systems. 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 a degree of risk existed involving the District’s extra-classroom activity fund and, therefore, we examined internal controls over the extra-classroom activity for the period July 1, 2004 to September 30, 2006.

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.