Background

The Westport School District (District) is located in the Towns of Westport, Elizabethtown, Essex, Lewis, and Moriah, Essex County. The District is governed by the Board of Education (Board) which comprises five 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 is one school building in operation within the District, with approximately 260 students and 50 employees. The District’s budgeted expenditures for the 2005-06 fiscal year were $4.33 million, funded primarily through State aid, real property taxes and grants. As of June 30, 2005, the District reported approximately $6.9 million in capital assets, of which, approximately $5.9 million represents land and buildings, and $1 million equipment. The District hired an inventory consultant to complete an inventory for the fiscal year ending June 30, 2004.

Objective

The objective of our audit was to determine whether the District had established effective internal controls over capital assets. To accomplish our objective, our audit addressed the following related question:

• Are internal controls over capital assets appropriately designed and operating effectively?
  

Scope and Methodology

Our overall goal was to assess the adequacy of the internal controls that District officials established 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; and information technology. 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 record keeping for the District’s capital assets. Therefore, we examined the internal controls over capital assets for the period July 1, 2004 to June 30, 2006, and conducted a physical inventory of certain capital assets during October of 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 generally agreed with our recommendations and indicated they planned to initiate corrective action.

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.