| Newfane
Central School District
Internal Controls Over
District Operations
- Executive Summary The Newfane Central School District (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. Scope and Objective The objective of our audit was to evaluate the District’s internal control system over its capital assets, inventory and payroll functions to ensure that assets were properly safeguarded for the period July 1, 2004 to April 5, 2006. However, we extended the scope of our audit in certain instances for capital assets1 and fuel inventory.2 Our audit addressed the following related questions:
Audit Results District officials and employees did not use District-owned laptop computers in accordance with the Board’s adopted AUP and sound business practices. Eight of 12 laptop computers we tested were used for personal purposes. Some of these computers were used to visit internet sites for pornography, online dating, shopping, travel, banking, games, and music. In addition, unauthorized software programs had been installed on these computers. It is particularly troubling that three of the eight computers were assigned to Board members. Members of the Board should set the “tone at the top” and therefore must observe the highest ethical standards as well as setting an example for service to the community. We also found that a former Board President, Donna Hill, inappropriately served as an intern to the Superintendent while at the same time serving on the Board. While serving in both roles Hill participated in the process leading to approval of the Superintendent’s new employment agreement. The new employment agreement increased the annual cost to the District by over $44,000 (34 percent) in one year. As an intern for the Superintendent, Hill was subordinate to the Superintendent. This situation raises a question as to whether in her capacity as a Board member she acted solely in the best interests of the District when dealing with matters affecting the Superintendent. District officials are not complying with their capital asset policies. District officials did not conduct an annual inventory of capital assets as required and all new purchases are not being recorded on the inventory records in accordance with the Board’s policy. Further, we could not locate seven of 20 pieces of electronic equipment we tested, with a cost of $5,517, and District officials had no documentation verifying that this equipment had been disposed of District officials did not establish adequate controls to protect fuel inventories. We identified a number of discrepancies in the fuel records. Also, we found the Contractor owed the District 1,903 gallons of diesel fuel. At current prices, this represents $3,984 of fuel inventory owed to the District. Comments of Local 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.
|