The Scio Central School District (District) is governed by the Board of Education (Board) which comprises seven 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 purchasing activities are the responsibility of the business office, under the general supervision of the purchasing agent designated by the Board. The Board appoints the business manager as the purchasing agent on an annual basis.

The Board first appointed a claims auditor in January 2005. The claims auditor assumed the powers and duties of the Board with regard to approving or denying claims for payment by the District. The Board appoints the claims auditor on an annual basis.

Scope and Objectives

The objective of our audit was to evaluate internal controls over the District’s purchasing and claims processing functions. Our audit addressed the following question for the period from July 1, 2004 through October 16, 2006:

• Are internal controls over procurement and claims processing appropriately designed and operating effectively?

Audit Results

The District is not following its own written procedures for purchases not required by law to be made pursuant to competitive bidding. Written procedures require, for purchases meeting specific cost thresholds, that District personnel obtain multiple verbal and written quotes from vendors to document that the District received the best price for the desired item. We found no evidence to indicate that the District obtained these quotes for any of the 53 purchases we tested that required them. As a result, the District may not be obtaining goods and services at the most economical price.

The District is not properly administering the claims audit function. We reviewed 74 claims, totaling $160,700, for evidence of proper documentation and audit. We found one or more exceptions in all 74 claims. Exceptions included a lack of prior departmental approval or purchasing agent approval, purchase orders dated after the date of purchase, lack of original invoice, insufficient itemization, and lack of signed receiving reports. The claims auditor approved these unsupported and/or unapproved claims because the Board did not develop written procedures to outline the claims audit process to be followed in reviewing and approving (or denying) claims against the District. The claims auditor stated that she only verifies that the names and amounts listed on the warrant match the individual claims. She also stated that she does not sign each individual claim but signs the warrant to indicate her approval of all the claims on it for payment. Warrants did not certify that the claims had been audited, and that the claims auditor authorized the Treasurer to pay them. As a result, the District lacks assurance that the claims it paid were all actual and necessary District costs.

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 that they either have or plan to initiate corrective action.