For each recommendation included in the audit report, the following is our correction action taken.
Jump to: Financial Statement Findings | Extra Classroom Activity Fund Findings
Internal Control Findings
Capital Project Tracking
Tracking of costs and related revenue by SEO project number reported on the Capital Project Schedule should be reviewed and reconciled. Specifically, the fund deficit related to buses should be reviewed and corrected in the Capital Projects Fund.
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- Audit Recommendation: M&Co. recommends that all project costs and revenues be evaluated and tracked by project number and that the fund deficit reported in the Capital Projects Fund be reviewed and corrected.
- Implementation Plan of Action: The School Business Manager worked with the district’s financial advisors to categorize revenues and expenditures that began in the 2015-16 school year through the present into the correct budgetary account codes by NYSED project number. Going forward all capital project revenues expenditures will be tracked by NYSED project number. The Board of Education will be provided a budget status report as part of the monthly Treasurer’s report.
- Implementation Date: Immediately
- Person Responsible for Implementation: School Business Manager
Budget Transfers
Budget transfers are being prepared by the account clerk and are not being reviewed by anyone.
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- Audit Recommendation: M&Co. recommends that all budget transfers be prepared/entered by one person to ensure accuracy and that the entries are properly supported and comply with legal guidelines.
- Implementation Plan of Action: A budget transfer request form will be completed by the employee requesting the transfer. The budget transfer form will be approved by the appropriate building principal or department head and sent to the School Business Manager for their approval. Once the form is approved the budget transfer will be entered by the Account Clerk. The Board of Education will be provided a budget transfer report as part of the monthly Treasurer’s report.
- Implementation Date: July 2019
- Person Responsible for Implementation: School Business Manager
Nvlslon Permissions
Some employees have access within the Nvision software that are not necessary to perform their duties or could create internal control weaknesses.
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- Audit Recommendation: M&Co. recommends that Nvision permissions be reviewed for all employees and permissions be constrained to only those required to carry out each employee’s job function.
- Implementation Plan of Action: All permissions were reviewed and updated to ensure employees only had access to those required to carry out their job functions. Permissions will be reviewed periodically throughout the course of the school year and adjusted when appropriate.
- Implementation Date: July 2019
- Person Responsible for Implementation: School Business Manager
Claims Auditor Review
The claims auditor is not reviewing all funds. The Trust and Agency Fund disbursements related to payroll taxes, and other fringe benefits are not being reviewed. The majority of this fund is payroll, however, there are disbursements related to tax payments, garnishments, and other payroll related payments that occur in this account as well.
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- Audit Recommendation: The claims auditor shall review all disbursements with the exception of those disbursements listed above (principle and interest, postage utility bills, or freight).
- Implementation Plan of Action: The claims auditor will review all payments made from the Trust and Agency fund.
- Implementation Date: July 2019
- Person Responsible for implementation: School Business Manager
Payroll coding review
Account coding for payroll is not being reviewed.
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- Audit Recommendation: M&Co. recommends that account coding be reviewed periodically (could be done in conjunction with the review of the payroll exceptions report).
- Implementation Plan of Action: The School Business Manager will review account coding each payroll while performing a review of the payroll check register. In addition, budgeted account codes will be compared to the actual codes being used in payroll on a periodic basis.
- Implementation Date: July 2019
- Person Responsible for Implementation: School Business Manager
Payroll exception report
Payroll exception report is not run/reviewed for any potential issues.
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- Audit Recommendation: M&Co. recommends that the payroll exceptions report be run and reviewed each pay period and that this review be documented with a sign off on the report.
- Implementation Plan of Action: The School Business Manager will review and sign the “Payroll Change Analysis” report in conjunction with their review of the payroll check register each payroll as part of the certification
process. - Implementation Date: July 2019
- Person Responsible for Implementation: School Business Manager
Accuracy of data sent to actuary for OPEB calculation
Inaccurate date of hire Information is being sent to the actuary to calculate OPEB.
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- Audit Recommendation: M&Co. recommends that information provided to actuary be reviewed and corrected prior to sending.
- Implementation Plan of Action: The Account Clerk responsible for supplying the OPEB information to the actuary will review the report to ensure the hire date listed is consistent with the date the employee became benefit eligible.
- Implementation Date: July 2019
- Person Responsible for Implementation: Account Clerk and School Business Manager
Scholarship recipient determination
Support for how scholarship recipients are determined is not kept in the business office.
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- Audit Recommendation: M&Co. recommends that scholarship recipient determination support should be kept with the scholarship awards in the business office.
- Implementation Plan of Action: The High School Principal will provide the scholarship criteria and recipient determination support to the business office for every scholarship awarded.
- Implementation Date: July 2019
- Person Responsible for Implementation: High School Principal and School Business Manager
Business Office “Additional Pay”
Certain members of the business office were being paid “additional pay” which was not in written contracts nor had board of education approval.
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- Audit Recommendation: M&Co. recommends that this practice be discontinued and that only payment for payroll based on explicit written contracts or board of education approval only.
- Implementation Plan of Action: Upon joining the district on July 1, 2019, the Business Manager discontinued this immediately. Going forward all payroll payments will be made in accordance with written contracts and/or
approved by the Board of Education. - Implementation Date: July 1, 2019
- Person Responsible for Implementation: School Business Manager
Timesheet approval process
Approval for hours worked could not be located for any employees who worked in the buildings and grounds department for most of the fiscal year.
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- Audit Recommendation: M&Co. recommends that the District implement a uniform timesheet approval and documentation process.
- Implementation Plan of Action: Each employee in the buildings and grounds department completes an individual timesheet that is approved by the Buildings and Grounds Supervisor and sent to payroll.
- Implementation Date: July 2019
- Person Responsible for Implementation: School Business Manager
For each recommendation included in the audit report, the following is our correction action taken.
Financial Statement Findings
2019-001: Compliance with New York State Real Property Tax Law-The unassigned fund balance of the general fund exceeds 4% of the 2019-20 general fund budget.
Audit Recommendation
The District should implement a plan to address and use the excess in future years.
Implementation Plan of Action
Regarding the amount of unassigned fund balance in excess of the limit allowed by NY State Law, the District plans on using such funds to at least partially finance the District’s share of debt service costs attributable to the multiple ongoing capital projects. If District officials determine the level of excess funds exceed the District’s share of the debt service costs, the Board will then determine the most appropriate use for any remaining excess funds, including considering appropriating surplus fund balance to finance annual operating costs, establishing and financing any necessary reserve funds and/or transferring moneys to existing reserves that are not fully funded.
- Implementation Date: Immediately
- Person Responsible for Implementation: School Business Manager
2019-002: Compliance with New York State Regulations – District Payroll was not certified for all pay periods of the 2018/2019 fiscal year.
Audit Recommendation
M&Co. recommends that the district should ensure that each payroll is being reviewed and certified as indicated by signoff of the designated individual.
Implementation Plan of Action: At the annual reorganization meeting held on July 2, 2019, the BOE appointed the School Business Manager as the certifier of payroll with the Superintendent appointed as the back-up certifier. The
School Business Manager will review and certify all payrolls, in instances when the School Business Manager is not able to certify payroll, the Superintendent will review and certify payroll.
- Implementation Date: July 2, 2019
- Person Responsible for Implementation: School Business Manager
2019-003: Bank Reconciliation and Transfer Procedures
Wire transfers require a two-part authentication process where the wire is initiated by one employee and must be released within the bank system by another employee, however, the employee releasing the wire is not provided with documentation or substantiation of the wire. One of the employees authorized to initiate and release wire transfers is the Treasurer. Additionally, bank reconciliations are performed by the Treasurer and were not reviewed by anyone during 2018/19.
Audit Recommendation
District should implement procedures where wire transfer substantiation is provided to and reviewed by the person releasing the wire transfers and bank reconciliations are reviewed by an independent
individual.
Implementation Plan of Action
The Account Clerk will receive supporting documentation prior to releasing wire transfers initiated by the District Treasurer. The Account Clerk will verify the dollar amounts are correct and sign the report. The School Business Manager will review all bank reconciliations, bank statements and the monthly Treasurer report. The School Business Manager will sign off on each bank reconciliation, bank statement and monthly Treasurer’s report.
- Implementation Date: July 2019
- Person Responsible for Implementation: School Business Manager
2019-004: Journal Entry Review Procedures -Journal entries are being prepared by the treasurer but are not being reviewed by anyone.
Audit Recommendation
The District should implement procedures where all journal entries are prepared and entered by one person and are reviewed by another to ensure accuracy of entry into the software and that entries are proper.
Implementation Plan of Action
All journal entries will be reviewed and signed by the School Business Manager.
- Implementation Date: July 2019
- Person Responsible for Implementation: School Business Manager
For each recommendation included in the audit report, the following is our correction action taken.
Extra Classroom Activity Fund Findings
Club Ledgers
During our testing of cash disbursements and cash receipts, we noted 10 out of 60 disbursements tested and 20 out of 60 cash receipts tested where the disbursement or receipt was recorded for the incorrect amount, not included in either the student ledger or the Central Treasurer’s ledger, or the ledger was missing.
Audit Recommendation
Club ledgers are an important and required part of the accounting records for extraclassroom activities. The purpose of these ledgers if for the Club to be responsible for recording and monitoring their activity and for providing a system of checks and balances against the ECAF Treasurer. To help ensure that each club is aware of the balance available to them, club ledgers should be prepared and maintained by the student treasurers of each club, ensuring they are correctly accounting for all activity throughout the year.
These ledgers should be periodically compared to the Central Treasurer’s ledger with any discrepancies investigated and resolved.
Implementation Plan of Action
A training was held with all of the ECA advisors on September 12, 2019. The
importance and purpose of the student ledgers was explained in detail. The Business Manager will compare student ledgers to the Central Treasurer’s ledgers twice a year to review any discrepancies and to ensure they are
being investigated and resolved.
- Implementation Date: September 2019
- Person Responsible for Implementation: School Business Manager
Budgets
Through our audit procedures, we noted that no budgetary estimates of necessary receipts and disbursements for each club were made and documented.
Audit Recommendation
Per the NYSED guidance, each club should annually budget receipts and disbursements and a copy filed with each the chief faculty advisor, central treasurer, faculty advisor and student activity treasurer.
Implementation Plan of Action
Every club must complete a club charter form. The charter form includes a section to estimate the clubs annual receipts and disbursements.
- Implementation Date: September 2019
- Person Responsible for Implementation: Central Treasurer
Cash Receipts
The Extraclassroom Activity Clubs receive funds from a variety of sources, including donations, ticket sales, field trips, event admissions and product sales. However, controls over those receipts are limited.
Recommendation
The district should review NYSED’s Finance Pamphlet 2 for all aspects of controls over Extraclassroom Activity Funds. However, as it relates to cash receipts, the District should consider the following:
- All donations should be documented in the minutes of each Club receiving the donations as soon as they are received. The Minutes should be signed by the Club officers and maintained as part of the official records of the club. In addition, the copy of the check or other documentation, such as a letter from the donor, should be filed with the cash receipts documentation.
- The District should consider issuing pre-numbered receipts to all Clubs with directions as to when a receipt should be issues, i.e. anytime an individual collects money from another individual. Periodically. The pre-numbered receipt books should be collected and reconciled to the cash receipts recorded.
- The District should require all fundraising activity to be supported by a ticket reconciliation for events for which admission is charged. Any fundraisers involving the sale of inventory should be supported by an inventory reconciliation form which should be attached to the cash receipt.
- To provide a system of checks and balances, all clubs should be required to prepare a statement of profit and loss for each fund raising event held. This will institute a sense of accountability, as each event will be reviewed for effectiveness and efficiency.
Implementation Plan of Action
The District held a mandatory meeting for all Extraclassroom advisors on
September 12, 2019 to view the requirements of NYSED’s Finance pamphlet 2. Clubs will provide adequate back up to support all cash receipts as noted above. Clubs are now required to submit a statement of profit and loss with the final deposit related to a fundraiser.
- Implementation Date: September 2019
- Person Responsible for Implementation: School Business Manager and Central Treasurer
Faculty Auditor
During our procedures, we noted that there is not a faculty auditor auditing records on a periodic basis.
Recommendation: Per NYSED guidance, a Chief Faculty Auditor should be appointed annually. The faculty auditor will call in the ledgers kept by the student activity treasurer at least twice a year, on a rotating basis, in order to
compare the balance as shown on the central treasurer’s report with the balance recorded in the ledger of the student activity treasurer. He/she should also examine various transactions and paperwork to determine if correct
procedures are being used. He/she shall certify on these pages the accuracy of the entries posted and the available balances listed.
Implementation Plan of Action
The School Business Manager will fulfill the role of faculty auditor and call in the student ledgers to compare to the central treasurer’s ledger twice a year. Various transactions and paperwork will be reviewed to ensure clubs are compliant with procedures. Once verified the School Business Manager will
certify the student and central treasurer’s ledgers.
- Implementation Date: September 2019
- Person Responsible for Implementation: School Business Manager