Background

The South Seneca Central School District (District) is located in the Towns of Covert, Lodi, Ovid, Romulus, and the Village of Interlaken in Seneca County. The District is also expanded into the Town of Hector in Schuyler County. The 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.

There are two schools in operation within the District, with approximately 903 students and 215 employees. The District’s budgeted expenditures for the 2006-07 fiscal year are approximately $17.2 million, funded primarily with State aid, real property taxes and grants.

The District has utilized a financial management system distributed by one vendor since 2002. This particular system offers five different financial/personnel modules. The District has been subscribing to three of the available modules. One module is used for the overall general financial management of the District. The second module controls payroll processing. The final module is a system administration module.

Objective

The objective of our audit was to determine if the internal controls over the computerized financial management system were designed appropriately and operating effectively. Our audit addressed the following related questions:

• Are user access rights over the District’s computerized financial management system designed appropriately and operating effectively?
  
  
• Did District management make appropriate use of monitoring reports to review user activity and transactions?
  

Scope and Methodology

Our overall goal was to assess the adequacy of the internal controls put in place by officials to safeguard District assets. To accomplish this, we performed an initial assessment of the internal controls so that we could design our audit to focus on those areas most at risk. Our initial assessment included evaluations of the following areas: cash receipts and disbursements, purchasing, payroll and personal services, capital assets and consumable inventories. Based on that evaluation, we determined that controls appeared to be adequate and limited risk existed in most of the financial areas we reviewed. We did determine that risk existed in the computerized financial management system area and, therefore, we examined access rights as they pertain to cash disbursements processing, payroll processing, the journal entry process and general application of computer system user access rights for the period December 1, 2005 to November 30, 2006.

We conducted our audit in accordance with generally accepted government auditing standards (GAGAS). More information on such standards and the methodology used in performing this audit are included in Appendix B of this report.

Comments of District Officials and Corrective Action

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 indicated that they agree with our findings and that corrective action has or will be taken on our recommendations.

The Board has the responsibility to initiate corrective action. Pursuant to Section 35 of the General Municipal Law, Section 2116-a (3)(c) of the Education Law and Section 170.12 of the Regulations of the Commissioner of Education, the Board must approve a corrective action plan that addresses the findings in this report, forward the plan to our office within 90 days, forward a copy of the plan to the Commissioner of Education and make the plan available for public review in the District Clerk’s office. For guidance in preparing the plan of action, the Board should refer to applicable sections in the publication issued by the Office of the State Comptroller entitled Local Government Management Guide.