The Tonawanda City 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 Assistant Superintendent of Finance plays a key role in the administration of the Business Office. Along with his regular job duties, the Board has appointed him as the purchasing agent. The Board has also appointed a claims auditor to review all claims for payment.

Scope and Objective

The objective of our audit was to evaluate the District’s internal control system over claims processing and donated computers to ensure that assets were properly safeguarded for the period July 1, 2005 to April 12, 2007. For donated computers, we examined Board minutes to identify all donations received during the period June 2005 through March 2007. Our audit addressed the following related questions:

• Are internal controls over claims processing appropriately designed and operating effectively to adequately safeguard District assets?
  
  
• Are internal controls over donated computers appropriately designed and operating effectively to adequately utilize and safeguard these District assets?

Audit Results

The District did not implement sufficient internal controls, nor did District officials follow established policies, for claims processing. Of the 79 claims we examined, the claims auditor did not review 44 percent prior to payment, and 33 percent lacked evidence of approval by the purchasing agent.1 Claims also did not contain adequate supporting documentation, such as itemized receipts or sufficient explanations to determine if the expenditures were appropriate. Further, the District lacks policies and procedures for travel, expense reimbursement, gift cards, prepaid phone cards, and credit account transactions at a supermarket.

The District also did not follow established policies for donated computer equipment. Of the 149 computers that were donated for instructional purposes, only 34 (23 percent) were placed in classrooms.² These 34 computers were also the only donated computers that the District tracked by service tag and location. The remaining 115 computers were not tracked in any manner. In total, only 92³ of the 149 computers could be accounted for. The other 57 were missing. District staff indicated that none of the donated computers had been disposed of, and we found no indication in the minutes that the Board had approved the disposal of any computer equipment.

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. Except as indicated in Appendix A, District officials generally agreed with our recommendations and indicated they planned to take corrective action. Appendix B includes our comment on an issue raised in the District’s response letter.

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² Nine separate donations occurred during the period June 2005 to March 2007.
³ This total represents all donated computers, which are in classrooms, storage or used for spare parts.