Comptroller's audit suggests school district improvements

PERU The Office of the State Comptroller has released an audit of the Peru Central School District conducted earlier this year. The audit consisted of two full-time state employees reviewing the districts finances for the past five years and was part of the states policy to regularly examine the fiscal accountability of each public school district, said district superintendent A. Paul Scott. During the audit, the financial activities and accounting functions across the school district were reviewed, said Scott. Items included payroll, credit cards, billing, purchasing, meals and refreshments, labor contracts, transportation, state aid and other business practices. Its the most comprehensive audit ever of Peru Central, said Scott. The report, said Scott, identified four areas of internal controls in which the school district should have interest in updating payroll processing, cash receipts and disbursements, extracurricular student club funds, and information technology network access and controls. The four areas are consistent with priorities identified by a fall 2007 audit conducted by the districts internal auditor, said Scott, who added the areas are four of the more common items that districts across the state have been identified as warranting attention. Its encouraging to see that the areas that had been identified as our next steps are in sync with and seem to concur with the comptrollers office, said Scott. The recommendations for improvement to the four areas were broken down into 36 detailed suggestions how to make those improvements, said Scott. Twenty-five of those 36 improvements have already been made, he added. One of which was for the district treasurer to maintain control of facsimile signatures, the most common version of which is a personalized stamp. What we had was the treasurer and the deputy treasurer each had their own facsimile signature, but they were stored in the same secured location, said Scott. What was done for the treasurer to maintain control of the treasurers signature and the deputy treasurer to maintain control of the deputy treasurers was to have two different lock-boxes that are within our vault. That way theyre still secure, but now in two lockable boxes stored separately. We didnt wait for an official recommendation, added Scott. When it was pointed out to us [during the audit] that it would be a stronger practice to have separate lock-boxes, we just went ahead and did it. Another improvement suggested in the audit was the segregation of duties in the districts payroll process, which Scott called a sound recommendation. That way, no one individual would have the capacity to enter an individual into the payroll system and earmark a particular number for that person, he said. Having different people each step of the way is a good control, said Scott. And, I think weve seen in recent news stories across the nation and even in New York State there have been examples of had those controls been in place, some inappropriate activity might not have happened. For us, fortunately, while there was nothing inappropriate, it is a stronger practice to have, he added. Other priorities the district will address or is in the process of addressing, said Scott, include increased supervision of student extracurricular group finances and closer scrutiny of personnel access and use of the districts financial software programs. Thats something to help ensure that the individuals that are authorized to use it are using it only within the scope of their authorization, said Scott. Whats not mentioned in the report is just as important as what is, the superintendent added. In recent years, the school district has updated various policies and practices regarding credit cards, cell phones, inventory control, and conference and workshop attendance, though those areas were not outlined in the report. Theres no mention of those areas in the audit report and generally how audits work is if theres nothing needing improvement in that particular area, it doesnt wind up being mentioned, said Scott. It is gratifying because Peru Central school board has updated each one of those areas over the last few years and that passed muster, so to speak. The cost of the audit would have been approximately $60,000 had the district had to hire its own firm to conduct a similar audit, said Scott. That estimate is based on the extent of the audit, which is due largely to the size of the school district, he added. In a small school district of a few hundred students, that audit would take less time, explained Scott. In our situation, by student enrollment, were the largest school district in this region. As a result, we have a larger budget and a more extensive timetable because of more accounts and programs to examine. Residents within the school district will receive a summary report of the comptrollers audit mailed as part of the districts fall newsletter.

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