The Randolph Academy Union Free School District (District) is governed by the Board of Education (Board) which comprises seven appointed 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 Board’s direction.

Scope and Objective

The objective of our audit was to evaluate the internal controls over the District’s claims processing and payroll functions for the period July 1, 2005 to June 18, 2007. Our audit addressed the following related questions:

• Are internal controls over the claims processing function designed appropriately and operating effectively?
  
  
• Are internal controls over the payroll function, as it relates to absences and leave time, designed appropriately and operating effectively?

Audit Results

The Board has not established effective internal controls over its claims processing function and has not adopted any written procedures for the duties of the claims auditor.

At its 2005 organizational meeting, the Board appointed the then-Superintendent to serve as the District’s claims auditor and purchasing agent. This individual was ineligible to serve as claims auditor according to the Education Law. Accordingly, at its 2006 organizational meeting the Board appointed a new claims auditor who is independent of the accounting and purchasing functions and also is independent of the Superintendent’s direct supervision.

We reviewed 35 claims totaling $145,418 and found one or more deficiencies with 32 of them totaling $137,514. We also reviewed 47 credit card purchases totaling $4,029 and found one or more deficiencies with 33 of them totaling $3,295. The deficiencies included lack of the following: proper documentation, itemization of expenses, evidence of approval by the department head, evidence of approval by the purchasing agent, evidence that goods or services were received, and/or an indication that the claim was a proper District expense.

These claims audit deficiencies exist because the Board appointed an ineligible person as claims auditor, did not establish comprehensive policies and procedures for the audit of claims during our audit period, and did not establish a written job description for the claims auditor position or a process for monitoring the claims auditor’s work.

The Board and District officials also should strengthen controls over the District’s payroll function. The Superintendent certifies the payroll, authorizes absences, and approves leave time requests. District officials indicated that the former Superintendent authorized employees to leave early throughout the 2005-06 fiscal year without charging leave time. This practice was not supported by any employment contract or written agreement and cost the District $26,984. The former Superintendent also authorized the absences of four employees to attend a fundraising golf tournament without charging leave time. The value of the employees’ time plus the donations paid on their behalf by the District totaled about $1,400.

Comments of School 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 that they either have initiated or plan to initiate corrective action.