The Ravena-Coeymans-Selkirk Central School District (District) is governed by the Board of Education (Board) which comprises nine 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.

The District’s budgeted expenditures for the 2005-06 fiscal year were approximately $35.5 million, funded primarily with State aid, real property taxes and grants. During the 2005-06 fiscal year, the District paid salaries, wages and fringe benefits totaling approximately $26.8 million. This represents the most significant expenditure incurred by the District.

The Board designated the Business Administrator as the purchasing agent for the District. Under the general supervision of the Superintendent, the purchasing agent is responsible for administering all purchase activities. The District recently hired its sixth Treasurer since 2002. The Treasurer is the District’s chief accounting officer and is custodian of all District funds. The Treasurer is required to render a monthly report for each fund showing the cash balance on hand at the beginning of the month, receipts by source during the month, total disbursements during the month, the cash balance on hand at the end of the month, and reconciliations with bank balances.

Scope and Objective

The objective of our audit was to determine if controls over selected financial operations are appropriately designed and operating effectively. Our audit covered the period July 1, 2004 to April 7, 2006 and addressed the following related questions:

• Has the District established adequate internal controls over payroll and personal services to protect District assets against fraud, abuse and professional misconduct, and are those controls operating effectively?
  
  
• Has the District established adequate internal controls over purchasing and claims processing to protect District assets against loss, waste and misuse, and are those controls operating effectively?
  
  
• Has the District established adequate internal controls over cash receipts and disbursements to protect District assets against loss, waste and professional misconduct, and are those controls operating effectively?

Audit Results

Controls over payroll and personal services are not adequate. Consequently, of 66 payroll-related payments tested, 23 payments totaling $38,184 were not supported by contract provisions or Board resolutions. Of this amount, nine payments totaling $37,765 were issued as separation and retirement payments and 14 payments totaling $418 were issued through bi-weekly payrolls.

Controls over purchasing and claims processing are not adequate. For example, the District is not always adhering to statutory competitive bidding requirements. Although a purchase order system is in place, individuals are circumventing this process resulting in unauthorized purchases, which has caused over-expenditures of budgetary appropriations. We also noted that at times warrants were approved by the Assistant Superintendent for Instruction and Business Administrator rather than the claims auditor, and credit cards are being used in a manner inconsistent with the District’s credit card policy. For example, although the policy only allows for one credit card to be issued in the District’s name, we found two bank-issued credit cards and 12 vendor charge cards. The policy also requires expenses to be authorized prior to the use of the card. However, we found no prior approval for the 19 credit card transactions tested. Further, of the 19 charge card transactions tested, we identified 14 charges, totaling $2,756, for items of questionable District purposes. Finally, the District paid for a four-day stay at a two-day conference that the Superintendent and Assistant Superintendent for Instruction attended.

Controls over cash receipts and disbursements also need to be improved. Bank reconciliations are not completed in a timely manner and accounting records are not up-to-date. We found that the Treasurer did not have control of his own signature disk when it was used to print checks, and the Treasurer has not complied with the District requirement to provide the Board with periodic financial reports. Also, the Board has not established written policies and procedures for online banking transactions.

Comments of District 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 plan to initiate corrective action.

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Complete Audit in PDF