Red Hook Central School District audits find repeated problems
RED HOOK, N.Y. — School district officials are trying to determine how to make changes after several years of audits have found weakness in handling cash, purchasing, computer access, claims, and determining eligibility for students with special needs.
A federal compliance audit by Sickler, Torchia, Allen and Churchill and an internal audit by Raymond Preusser were discussed during a Board of Education meeting last week.
“Almost all of those recommendations were in the report last year and the year before that,” Business Manager Bruce Martin said.
“The internal auditor did make some recommendations on internal controls,” he said. “Essentially it’s a list of recommendations that is the list of recommendations that he provided last year on internal controls.”
Auditors reviewing compliance with federal programs found that the district did not complete an evaluation for some students.
Martin said the shortcoming amounts to a “clerical type issue” that is being addressed.
High risk issues found in the internal audit included problems with having the same person receiving cash receipts and making deposits.
“The district treasurer is still directly receiving the checks, issuing receipts, preparing the deposits and entering the transactions into the accounting system,” auditors wrote.
Auditor also found “numerous invoice packets where purchase orders were not prepared showing authorization for such purchases. Claim forms are used, and usually prepared after the district has received the goods or services.”
Computer access was found to be weak because “certain individuals have access to computer areas that are not essential to their particular jobs,” which included access to the payroll department. Continued...
Another problem is having an internal claims auditor that is also involved in approval of payment of district bills.
“Regulations state that the internal claims auditor should be a person independent of all business functions,” auditors wrote. Your internal claims auditor is involved with the payables function, which is the main area for the position to review and approve. In effect, she is essentially reviewing and approving her own work.”
Martin said that making changes could reduce that district’s ability to function smoothly.
“When you examine tinkering with internal controls you really have to do a little bit of weighing as to the pros and cons of implementing that new control,” he said.
“You have to take a look at what risk that control is designed to address,” Martin said. “You have to look at what the significance of what that risk is. You have to look at the cost of implementing that control. You have to look at whether implementing that control is going to reduce the efficiency of the operation or interfere with the ability of the finance department to support the mission of the district.”
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