The Scarsdale Union Free 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 internal controls over capital assets and claims processing for the period July 1, 2004 through May 31, 2006. Our audit addressed the following related questions:

• Were internal controls over capital assets properly designed and operating effectively to protect and properly account for District assets?
  
  
• Were internal controls over the processing of claims for meals, travel and credit cards appropriately designed and operating effectively to safeguard District assets against fraud, waste, and abuse?

Audit Results

We found that internal controls related to capital assets need improvement. The District has not developed a comprehensive capital asset policy. District officials did not appoint an individual to track capital assets and ensure the accuracy and completeness of District asset records. In June 2005, the District hired a private company to perform a physical inventory of the District’s assets. We tested 30 items on the vendor’s disposal report and found eight items (totaling $14,632) that should not have been on the report because they were still being used by the District. In addition, the physical inventory taken by the vendor was $380,000 less than the District’s financial statement at June 30, 2005. This difference was not reconciled or investigated by District officials.

Internal controls related to the processing of claims for meals, travel and credit card expenses need to be improved to safeguard District assets. We found the policy for meals and refreshments at District meetings did not set sufficient limitations to ensure that these expenses were necessary to complete District business. We also found that District officials did not monitor and enforce compliance with the established claims processing policy to ensure that travel reimbursements and other charges are properly verified. During our examination of credit card payments, we found instances where the District did not have detailed receipts to substantiate the expenses and did not process credit card payments timely, which resulted in the assessment of late fees and finance charges to the District, totaling $424.

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 planned to initiate corrective action.