Southern Cayuga Central School District

Internal Controls Over Selected Financial Activities -
EXECUTIVE SUMMARY

The Southern Cayuga 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.

The District has been using a computerized business management system for more than ten years. The District subscribes to four modules (general financial management; payroll processing; personnel, time card, and leave accrual maintenance; and system administration) that are based on two different operating systems.

Scope and Objective

The objective of our audit was to determine if the internal controls over selected financial activities were designed appropriately and operating effectively for the period March 1, 2006 to February 28, 2007. Our audit addressed the following related questions:

• Are internal controls over the District's computerized business management system designed appropriately and operating effectively?
• Are internal controls over treasury and accounting duties adequately designed and operating effectively with respect to the segregation of duties?

Audit Results

Management failed to protect District assets by ensuring that the administration of the computerized business management system was properly assigned to someone outside of the Business Office. Three of nine users tested had inappropriate levels of access and the system did not have the capability to produce desired monitoring reports. District Management has also failed to properly segregate incompatible treasury and accounting duties, or provide for sufficient mitigating controls in instances where this is not practical or cost-effective.

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.