Background

The Newark Central School District (District) is located in the Village of Newark and includes the Town of Arcadia and parts of the Towns of Lyons and Sodus in Wayne County, along with parts of the Towns of Manchester and Phelps in Ontario 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 five schools in operation within the District, with approximately 2,550 students and 650 employees. The District’s budgeted expenditures for the 2005-06 fiscal year were over $40 million, funded primarily with State aid, sales tax, real property taxes and grants.

The District adopted a policy to help govern the use of credit cards. During the 2005-06 fiscal year, the District used store-issued credit cards to make purchases of approximately $18,500. The Board has authorized a claims auditor to audit claims against the District.

Objective

The objective of our audit was to examine District controls over credit card purchases and the audit of claims. Our audit addressed the following related question:

• Are internal controls over credit card purchases and the audit of claims appropriately designed and operating effectively to adequately safeguard District assets?
  

Scope and Methodology

During this audit, we examined the District’s internal controls over credit card purchases and the audit of claims for the period July 1, 2005 to July 14, 2006.

We conducted our audit in accordance with generally accepted government auditing standards. 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. We encourage the Board to make this plan available in the District Clerk’s office.