1 Joint Meeting With The School Board & Audit Committee October 22, 2008 Wednesday, 3:30 p.m.

11

Joint Meeting With TheJoint Meeting With TheSchool Board & Audit CommitteeSchool Board & Audit Committee

October 22, 2008October 22, 2008

Wednesday, 3:30 p.m.Wednesday, 3:30 p.m.

22

Audit DepartmentAudit DepartmentOrganization ChartOrganization Chart

33

StaffingStaffing

9 Professional, 1 Administrative, 1 Vacancy9 Professional, 1 Administrative, 1 Vacancy

CollectivelyCollectively 9 Advanced Degrees9 Advanced Degrees 9 Professional Certificates – CPA, CIA, CISA, 9 Professional Certificates – CPA, CIA, CISA,

and CMAand CMA Over 150 Years of Auditing & Accounting Over 150 Years of Auditing & Accounting

ExperienceExperience

44

Audit Activities During 2006-2007Audit Activities During 2006-2007

A.A. Internal Funds AuditsInternal Funds Audits

B.B. Performance AuditsPerformance Audits

C.C. Special RequestsSpecial Requests

D.D. Charter School AuditsCharter School Audits

55

Results of 2006 AuditsResults of 2006 AuditsMiddle and Elementary SchoolsMiddle and Elementary Schools

Comparing to 2004 findingsComparing to 2004 findings

Areas with noticeable improvementsAreas with noticeable improvements

Areas that need improvementAreas that need improvement

Areas that need special attentionAreas that need special attention

66

Internal Funds AuditInternal Funds Audit2006 Findings Compared to 2004 Findings2006 Findings Compared to 2004 Findings

Areas with Noticeable ImprovementAreas with Noticeable Improvement::

Accounting record keeping (Accounting record keeping ( by 13 by 13)) Timekeeping for payroll (Timekeeping for payroll ( by 15 by 15)) Timecards not signed by employees (Timecards not signed by employees ( by 19 by 19)) Program deficit / high staffing (Program deficit / high staffing ( by 13 by 13)) Access to drop safe (Access to drop safe ( by 19 by 19))

77

Internal Funds AuditInternal Funds AuditAnalysis of 2004 & 2006 FindingsAnalysis of 2004 & 2006 Findings

Areas With ImprovementsAreas With Improvements::

Registration form (Registration form ( by 11 by 11)) Lease prequalification (Lease prequalification ( by 12 by 12)) Adjustment to records (Adjustment to records ( by 16 by 16))

88

Internal Funds AuditInternal Funds AuditAnalysis of 2004 & 2006 FindingsAnalysis of 2004 & 2006 Findings

Areas That Need ImprovementAreas That Need Improvement::

SACC students released without sign-out (SACC students released without sign-out ( by 20 by 20)) SACC students released to unauthorized person (SACC students released to unauthorized person ( by 32 by 32)) Timecard not signed by supervisor (Timecard not signed by supervisor ( by 19 by 19)) Inadequate support for disbursement (Inadequate support for disbursement ( by 59 by 59)) Lease agreement not adequately maintained (Lease agreement not adequately maintained ( by 27 by 27)) Lease – inadequate proof of insurance (Lease – inadequate proof of insurance ( by 24 by 24)) Lease – fees collected after use of facilities (Lease – fees collected after use of facilities ( by 14 by 14)) Lease – undercharged rentals (Lease – undercharged rentals ( by16 by16))

99

Internal Funds AuditInternal Funds AuditAnalysis of 2006 FindingsAnalysis of 2006 Findings

Areas That Need Special AttentionAreas That Need Special Attention::

# # Inadequate support for disbursementInadequate support for disbursement 8888 Students released to unauthorized personStudents released to unauthorized person 4848 Inadequate proof of insurance for facilities leasingInadequate proof of insurance for facilities leasing 6161 Fundraisers not adequately documentedFundraisers not adequately documented 5151 Students released without parent sign-outStudents released without parent sign-out 3838 Lease agreement not adequately maintainedLease agreement not adequately maintained 4545 Timecard not signed by supervisorTimecard not signed by supervisor 3131

362 (47% of total)362 (47% of total)

1010

New Areas of FocusNew Areas of FocusSince 2004Since 2004

ReceiptsReceipts Verify prepared deposits in schools’ drop safe & Verify prepared deposits in schools’ drop safe &

surprise check of monies collectedsurprise check of monies collected More in-depth review & verification of monies More in-depth review & verification of monies

collection records & revenues sourcescollection records & revenues sources Request financial records from banks, reconcile Request financial records from banks, reconcile

schools’ monies collection with deposit recordsschools’ monies collection with deposit records

DisbursementsDisbursements Ascertain the appropriateness of expenditures Ascertain the appropriateness of expenditures

for selected accountsfor selected accounts

1111


SACC ProgramSACC Program Examine SACC student records & student Examine SACC student records & student

release/dismissal proceduresrelease/dismissal procedures Reconcile SACC revenues with student Reconcile SACC revenues with student

registration & attendance recordsregistration & attendance records Test SACC payrollTest SACC payroll

Community School ProgramCommunity School Program Reconcile Community School revenues with Reconcile Community School revenues with

student registration and attendance recordsstudent registration and attendance records Test Community School payrollTest Community School payroll

1212


Leasing of School FacilitiesLeasing of School Facilities More in-depth review of leasing operations More in-depth review of leasing operations

& determine:& determine: Adequacy of documentationAdequacy of documentation Adequacy of insurance coverageAdequacy of insurance coverage Leasing revenuesLeasing revenues

1313

Implementation ofImplementation ofNew Rules & ProceduresNew Rules & Procedures

To Improve Controls and AccountabilityTo Improve Controls and Accountability

Sponsors retain the yellow copy of the MCR in order to Sponsors retain the yellow copy of the MCR in order to match the deposit records on match the deposit records on Official ReceiptsOfficial Receipts prepared prepared by bookkeeperby bookkeeper

Remitters record monies put in the drop safe on the new Remitters record monies put in the drop safe on the new “Drop Safe Log”“Drop Safe Log”

Incoming mails be received and opened by staff other Incoming mails be received and opened by staff other than the bookkeeper. MCR for monies received in the than the bookkeeper. MCR for monies received in the mail be prepared by mail opener and submitted to mail be prepared by mail opener and submitted to bookkeeper for depositbookkeeper for deposit

1414

Special Requests/InvestigationsSpecial Requests/InvestigationsDuring 2007 and 2008During 2007 and 2008

25 Special Requests/Investigations25 Special Requests/Investigations

InvolvedInvolved 5 High Schools5 High Schools 3 Middle Schools3 Middle Schools 12 Elementary Schools12 Elementary Schools 3 Charter Schools3 Charter Schools 2 Administrative Departments2 Administrative Departments

Most of them were related to financial mattersMost of them were related to financial matters

Results for 15 of them were referred to School Police / Results for 15 of them were referred to School Police / Employee Relations for further investigationEmployee Relations for further investigation

1515

Special Requests/InvestigationsSpecial Requests/InvestigationsDuring 2007 and 2008During 2007 and 2008

Results (as of September 12, 2008)Results (as of September 12, 2008)Some involve multiple employeesSome involve multiple employees

9 Ongoing Investigation9 Ongoing Investigation 3 Reprimands3 Reprimands 5 Employees Resigned5 Employees Resigned 3 Referred to State Attorney3 Referred to State Attorney 5 Other Personnel Actions5 Other Personnel Actions 5 Results in Development & Implementation of 5 Results in Development & Implementation of

New ProceduresNew Procedures

1616

Possible Impacts for AuditsPossible Impacts for Audits

Value added to our existing management Value added to our existing management controls and accountabilitiescontrols and accountabilities

Value added to the integrity of our systemValue added to the integrity of our system

Strengthening the control systemStrengthening the control system

1717


Ultimate results:Ultimate results: Protect our studentsProtect our students Protect school administratorsProtect school administrators Safeguard assets and ensure compliance with laws, Safeguard assets and ensure compliance with laws,

School Board Policies & guidelinesSchool Board Policies & guidelines Better controls resulting in increase in revenuesBetter controls resulting in increase in revenues Better control in operating expensesBetter control in operating expenses Provide deterrent for potential abuse of the systemProvide deterrent for potential abuse of the system Promote public confidence in the school system Promote public confidence in the school system

through public transparency, professional through public transparency, professional independence, & objective reportingindependence, & objective reporting

1818

Internal Funds Revenues CollectionInternal Funds Revenues CollectionImproved Since 2004Improved Since 2004

Increased by $17 million,Increased by $17 million,or 29% from $59 million to $76 millionor 29% from $59 million to $76 million

Per student revenues increased by 29% Per student revenues increased by 29% from $349 to $450from $349 to $450

1919

Internal Funds Revenues AnalysisInternal Funds Revenues Analysis

Constant $ adjusted for inflation; 1996 base year.Constant $ adjusted for inflation; 1996 base year.Source: Annual Internal Funds Audit Reports and Manatee Accounting System.Source: Annual Internal Funds Audit Reports and Manatee Accounting System.

Total Receipts During 1996 - 2008Current and Constant Dollars

$30 M

$40 M

$50 M

$60 M

$70 M

$80 M

Current $ $35 M $38 M $43 M $47 M $48 M $51 M $51 M $55 M $59 M $60 M $68 M $75 M $76 M

CPI-Adjusted $ $35 M $37 M $41 M $44 M $44 M $45 M $44 M $47 M $49 M $49 M $53 M $56 M $56 M

# of Schools 129 131 136 136 138 145 149 156 160 162 165 167 171

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

2020

Internal Funds Revenues AnalysisInternal Funds Revenues Analysis

Constant $ adjusted for inflation; 1996 base year.Constant $ adjusted for inflation; 1996 base year.Source: Annual Internal Funds Audit Reports, Manatee Accounting System, & Budget Executive Summary Reports.Source: Annual Internal Funds Audit Reports, Manatee Accounting System, & Budget Executive Summary Reports.

Average Receipts Per Student During 1996 - 2008Current and Constant Dollars

$200

$250

$300

$350

$400

$450

$500

Current $ $271 $279 $312 $327 $326 $339 $327 $339 $349 $350 $393 $439 $450

CPI-Adjusted $ $271 $271 $296 $306 $298 $300 $281 $287 $289 $282 $307 $332 $331

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

2121

SACC Revenues Collection SACC Revenues Collection Improved Since 2004Improved Since 2004

SACC revenues increased by $4.4 million, SACC revenues increased by $4.4 million, or 24% from $18.1 million to $22.5 millionor 24% from $18.1 million to $22.5 million

Total cumulative SACC revenue increase:Total cumulative SACC revenue increase: At current dollars: $10.4 millionAt current dollars: $10.4 million Adjusted for rate change and change in Adjusted for rate change and change in

student enrollment: $5.2 millionstudent enrollment: $5.2 million

2222

SACC & Summer CampSACC & Summer CampRevenues AnalysisRevenues Analysis

Constant $ adjusted for fee increases and student enrollment; 2004 base year.Constant $ adjusted for fee increases and student enrollment; 2004 base year.Source: Manatee Accounting System and SACC Fee Schedules.Source: Manatee Accounting System and SACC Fee Schedules.

Total Revenues During 2004 - 2008Current and Constant Dollars

$15.0M

$17.0M

$19.0M

$21.0M

$23.0M

Current $ $18.1M $18.4M $19.9M $21.8M $22.5M

Adjusted $ $18.1M $19.0M $19.2M $19.6M $19.7M

2004 2005 2006 2007 2008

2323


Source: Manatee Accounting System and SACC Fee Schedules.Source: Manatee Accounting System and SACC Fee Schedules.

Revenues Increase From Prior Year & Culmulative $

$0.4M$1.5M $1.9M

$0.7M$0.4M

$1.8M

$3.8M$4.4M

$0.4M

$2.2M

$6.0M

$10.4M

$0.0M

$2.0M

$4.0M

$6.0M

$8.0M

$10.0M

$12.0M

2005 2006 2007 2008

Increase From Prior Year Increase From 2004 Culmulative Increase Since 2004

2424


Constant $ adjusted for fee increases and student enrollment; 2004 base year.Constant $ adjusted for fee increases and student enrollment; 2004 base year.Source: Manatee Accounting System and SACC Fee Schedule.Source: Manatee Accounting System and SACC Fee Schedule.

Revenues Increase From Prior Year & Culmulative $(Adjusted for Fee Increases & Student Enrollment: 2004 Base Year)

$0.9M$0.2M $0.5M

$0.0M

$0.9M $1.1M$1.6M $1.6M

$0.9M

$2.0M

$3.6M

$5.2M

$0.0M$1.0M$2.0M$3.0M$4.0M$5.0M$6.0M

2005 2006 2007 2008


2525

Facility Leasing RevenuesFacility Leasing RevenuesImproved Since 2004Improved Since 2004

Total facility leasing revenues increased by $2.5 Total facility leasing revenues increased by $2.5 million, or 139% from $1.8 million to $4.3 millionmillion, or 139% from $1.8 million to $4.3 million

Per school leasing revenues increased by $14K, Per school leasing revenues increased by $14K, or 128% from $11K to $25Kor 128% from $11K to $25K

Total cumulative leasing revenue increase:Total cumulative leasing revenue increase: At current dollars: $5.2 millionAt current dollars: $5.2 million Adjusted for rate change: $3.2 millionAdjusted for rate change: $3.2 million

2626

Leasing Revenues AnalysisLeasing Revenues Analysis

Constant $ adjusted for fee increases; 2004 base year.Constant $ adjusted for fee increases; 2004 base year.Source: Manatee Accounting System and Leasing Rate Schedules.Source: Manatee Accounting System and Leasing Rate Schedules.

Total Leasing Revenues During 2004 - 2008

$1.0M$1.5M$2.0M$2.5M$3.0M$3.5M$4.0M$4.5M

Current $ $1.8M $2.0M $2.7M $3.2M $4.3M

Adjusted $ $1.8M $2.0M $2.2M $2.6M $3.4M

# of Schools 161 163 165 167 171

2004 2005 2006 2007 2008

2727



Average Leasing Revenues Per SchoolDuring 2004 - 2008

$10.0K

$15.0K

$20.0K

$25.0K

$30.0K

Current $ $10.9K $12.3K $16.5K $19.0K $24.9K

Adjusted $ $10.9K $12.3K $13.3K $15.4K $20.2K

# of Schools 161 163 165 167 171

2004 2005 2006 2007 2008

2828


Source: Manatee Accounting System.Source: Manatee Accounting System.

Leasing Revenues Increase During 2005 - 2008

$257K$709K $458K

$1,084K

$257K

$966K$1,424K

$2,508K

$257K

$1,223K

$2,647K

$5,154K

$0K

$1,000K

$2,000K

$3,000K

$4,000K

$5,000K

$6,000K

2005 2006 2007 2008


2929



Leasing Revenues Increase During 2005 - 2008(Adjusted for Rate Changes: 2004 Base Year)

$257K $191K$370K

$878K

$257K$449K

$819K

$1,697K

$257K

$706K

$1,525K

$3,222K

$0K$500K

$1,000K$1,500K$2,000K$2,500K$3,000K$3,500K

2005 2006 2007 2008


3030

Other InvolvementsOther Involvements

1.1. Provide input for the Department of Accounting Provide input for the Department of Accounting Services, After School Programming, and Adult Services, After School Programming, and Adult & Community Education in developing and & Community Education in developing and implementing new guidelines to strengthen implementing new guidelines to strengthen controls for Internal Fundscontrols for Internal Funds

2.2. Present audit results to principal groups at Present audit results to principal groups at their regular meetings so that administrators their regular meetings so that administrators can keep updated re: most common control can keep updated re: most common control weaknesses and new audit approaches to help weaknesses and new audit approaches to help administrators prevent and detect improprieties administrators prevent and detect improprieties at their schoolsat their schools

3131

Performance AuditsPerformance Audits

1.1. Audit of Implementation of Corrective Audit of Implementation of Corrective Actions in Response to Auditor Actions in Response to Auditor General’s 2004 Audit of Student FTE General’s 2004 Audit of Student FTE (August 2006)(August 2006)

and and 2.2. Audit of Corrective Actions in Audit of Corrective Actions in

Response to Auditor’s General’s 2004 Response to Auditor’s General’s 2004 Audit of Student Transportation FTE Audit of Student Transportation FTE (August 2006)(August 2006)

3232

Performance AuditsPerformance AuditsAudits of Corrective Actions for FTE AuditsAudits of Corrective Actions for FTE Audits

The The Auditor General’s 2004 Student FTE AuditAuditor General’s 2004 Student FTE Audit of the of the School District was released in 2005, and revealed School District was released in 2005, and revealed certain weaknesses in documentation of our programs. certain weaknesses in documentation of our programs. That audit resulted in total negative adjustments of That audit resulted in total negative adjustments of $2,020,203 in FEFP funding. We lost $2,020,203 in that $2,020,203 in FEFP funding. We lost $2,020,203 in that year.year.

Based on a sample of 48 schools, instances of Based on a sample of 48 schools, instances of noncompliance found were related to six departments:noncompliance found were related to six departments:

Exceptional Student EducationExceptional Student Education School Choice and Choice ProgramsSchool Choice and Choice Programs Compensation and Human Resource PlanningCompensation and Human Resource Planning Multicultural EducationMulticultural Education TransportationTransportation

3333

Performance AuditsPerformance AuditsAudits of Corrective Actions for FTE AuditsAudits of Corrective Actions for FTE Audits

These findings were in the areas ofThese findings were in the areas of Student Records for ESEStudent Records for ESE Off-campus On-the-job Training (OJT) documentation, and Off-campus On-the-job Training (OJT) documentation, and Teacher Certification with regards to ESOL strategies Teacher Certification with regards to ESOL strategies

compliancecompliance

Audit Exceptions were found involving reporting errors, Audit Exceptions were found involving reporting errors, missing records, or records that were not properly and missing records, or records that were not properly and accurately prepared.accurately prepared.

The next FTE Audit will be for 2006-07 School Year.The next FTE Audit will be for 2006-07 School Year.

Our own follow-up audit identified similar areas we have to Our own follow-up audit identified similar areas we have to address, based on a sample of 11 schools.address, based on a sample of 11 schools.

3434


Audits of Corrective Actions for FTE AuditsAudits of Corrective Actions for FTE Audits

District’s Corrective actions must be fully District’s Corrective actions must be fully implemented in all schools effective 2006-07 implemented in all schools effective 2006-07 School Year.School Year.

District staff were developing and implementing District staff were developing and implementing guidelines and procedures that all schools should guidelines and procedures that all schools should to follow in order to address all issues. to follow in order to address all issues.

3535


3.3. Audit of Boca Raton Middle School Audit of Boca Raton Middle School Internal Accounts (September 15, 2006)Internal Accounts (September 15, 2006)

Records and files for disbursements and Records and files for disbursements and receipts from July 1, 2005, through February receipts from July 1, 2005, through February 28, 2006, could not be located.28, 2006, could not be located.

3636


4.4. Audit of Seminole Ridge High School Audit of Seminole Ridge High School Deposit Records (November 17, 2006)Deposit Records (November 17, 2006)

Audit uncovered $31,000+ stolen by the school Audit uncovered $31,000+ stolen by the school bookkeeper. Findings were referred to School Police for bookkeeper. Findings were referred to School Police for further investigation.further investigation.

Police later filed charges against the bookkeeper.Police later filed charges against the bookkeeper.

Remedial actions included:Remedial actions included: Sponsors of fundraisers for future verification will maintain a copy Sponsors of fundraisers for future verification will maintain a copy

of the of the Monies Collection ReportsMonies Collection Reports Auditors will perform unannounced verification of monies in a Auditors will perform unannounced verification of monies in a

drop-safedrop-safe Use of log book for all deposits in the drop-safeUse of log book for all deposits in the drop-safe

3737


5.5. Audit of Communications Department of Alexander Audit of Communications Department of Alexander W. Dreyfoos School of the ArtsW. Dreyfoos School of the Arts(November 17, 2006)(November 17, 2006)

Several issues were found: forging of signature on Check Several issues were found: forging of signature on Check Requisition, and receipt of a laptop as gift from parents.Requisition, and receipt of a laptop as gift from parents.

The Year Book Account related issue was resolved. The Year Book Account related issue was resolved. Causes of the problems were due to inclusion of Causes of the problems were due to inclusion of unrelated expenditures in the Year Book Account.unrelated expenditures in the Year Book Account.

Regarding donation from the School of Arts Foundation, Regarding donation from the School of Arts Foundation, the audit revealed that the proceeds were spent properly.the audit revealed that the proceeds were spent properly.

3838

Performance AuditsPerformance Audits6.6. Audit of Boynton Beach Community High Audit of Boynton Beach Community High

School (January 19, 2007)School (January 19, 2007)

$101,884 overpayments in payroll – There were $101,884 overpayments in payroll – There were widespread inconsistencies and unaccountable widespread inconsistencies and unaccountable overpayments to staff.overpayments to staff.

Questionable pay widespread – The Community Questionable pay widespread – The Community School secretary input hours into the payroll system School secretary input hours into the payroll system for staff without proof of hours worked and supervisor for staff without proof of hours worked and supervisor approval for time and hours.approval for time and hours.

3939

Performance AuditsPerformance Audits6.6. Audit of Boynton Beach Community Audit of Boynton Beach Community

High School (January 19, 2007)High School (January 19, 2007)

The audit identified repeated irregularities andThe audit identified repeated irregularities andnoncompliance by staff in handing leases.noncompliance by staff in handing leases.Of the 81 executed leases,Of the 81 executed leases, Lessees underpaid $12,726 for their 29 leases.Lessees underpaid $12,726 for their 29 leases.

59 leases did not provide proof of adequate liability 59 leases did not provide proof of adequate liability insurance.insurance.

42 were not signed by lessees.42 were not signed by lessees.

Five did not have the approved Rental Prequalification.Five did not have the approved Rental Prequalification.

35 had not made the full payment before the use of 35 had not made the full payment before the use of facilities, as required by District guidelines.facilities, as required by District guidelines.

4040

Performance AuditsPerformance Audits6.6. Audit of Boynton Beach Community High Audit of Boynton Beach Community High

School (January 19, 2007), Other Issues:School (January 19, 2007), Other Issues:

Disbursements Not Properly DocumentedDisbursements Not Properly Documented

Change Fund Not Properly SecuredChange Fund Not Properly Secured

Access to School’s Drop SafeAccess to School’s Drop Safe

Prenumbered Document CustodianPrenumbered Document Custodian

4141


7.7. Audit of Contract Compliance, WHLS Audit of Contract Compliance, WHLS of Florida, Inc. for Fiscal Year 2006 of Florida, Inc. for Fiscal Year 2006 (January 19, 2007)(January 19, 2007)

The audit concluded that:The audit concluded that:

WHLS did not achieve the project objective. WHLS did not achieve the project objective.

WHLS did not achieve objective that 100% of WHLS WHLS did not achieve objective that 100% of WHLS students will earn a minimum of four credits in FY 2006.students will earn a minimum of four credits in FY 2006.

The other 3 objectives were achieved: regarding students’ The other 3 objectives were achieved: regarding students’ absences; dropout rate, and percent of seniors receiving absences; dropout rate, and percent of seniors receiving employment.employment.

4242


8.8. Audit of Royal Palm Beach High School Audit of Royal Palm Beach High School Cheerleading and ESE Field Trip Accounts Cheerleading and ESE Field Trip Accounts (April 13, 2007)(April 13, 2007)

$12,795 in cheerleading program monies were $12,795 in cheerleading program monies were unaccounted for; and $2,128 in ESE field trip monies unaccounted for; and $2,128 in ESE field trip monies was also unaccounted for.was also unaccounted for.

The Cheerleading sponsor resigned from the District The Cheerleading sponsor resigned from the District and discipline was issued to the ESE teacher.and discipline was issued to the ESE teacher.

4343


9.9. Audit of Olympic Heights High Audit of Olympic Heights High School Drama Ticket SalesSchool Drama Ticket Sales(July 12, 2007)(July 12, 2007)

There was a shortfall of $2,464 in the Spring There was a shortfall of $2,464 in the Spring 2007 Show Fundraiser account; unsold tickets 2007 Show Fundraiser account; unsold tickets were not retained; there was no independent were not retained; there was no independent reconciliation of ticket sales; and no reconciliation of ticket sales; and no documentation for inventory of tickets.documentation for inventory of tickets.

4444


10.10. Audit of E-Rate Revenue CollectionAudit of E-Rate Revenue Collection(July 12, 2007)(July 12, 2007)

The audit revealed that:The audit revealed that:

$379,567 in cellular services E-Rate revenues were $379,567 in cellular services E-Rate revenues were missed due to misunderstanding of requirements for missed due to misunderstanding of requirements for funding.funding.

District E-Rate procedures were not adequately District E-Rate procedures were not adequately documented in writing.documented in writing.

4545


11.11. Audit of Palm Bach Central High School’s Audit of Palm Bach Central High School’s Facilities Leasing (July 12, 2007)Facilities Leasing (July 12, 2007)

During School Year 2006, the school administered 91 During School Year 2006, the school administered 91 Lease Agreements and collected a total of $184,290 in Lease Agreements and collected a total of $184,290 in leasing revenues. The audit revealed widespread of leasing revenues. The audit revealed widespread of irregularities. Specifically,irregularities. Specifically,

Sixty leases (66%) did not have the required prequalification.Sixty leases (66%) did not have the required prequalification.

Thirty-two leases (35%) did not have proof of adequate liability Thirty-two leases (35%) did not have proof of adequate liability insurance.insurance.

All 91 Lease Agreements were not properly executed.All 91 Lease Agreements were not properly executed.

None of the Lease Agreements were signed by Principal.None of the Lease Agreements were signed by Principal.

4646



Five leases were neither signed by the lessees nor a Five leases were neither signed by the lessees nor a school representative.school representative.

48 leases were not signed by the lessees.48 leases were not signed by the lessees.

81 leases were not signed by a witness as required by the 81 leases were not signed by a witness as required by the lease document.lease document.

School lost $97,223 in revenues due to undercharged School lost $97,223 in revenues due to undercharged rentals. Leasing charges for 53 (58%) of the 91 leases rentals. Leasing charges for 53 (58%) of the 91 leases were below the District approved rate schedule, resulting were below the District approved rate schedule, resulting in a total loss of $82,464 in rental income during School in a total loss of $82,464 in rental income during School Year 2006.Year 2006.

4747



$14,759 in total rental charges were waived for $14,759 in total rental charges were waived for seven leases without obtaining the prequalification seven leases without obtaining the prequalification approval from the Real Estate Services Department.approval from the Real Estate Services Department.

Rental charges not timely collected.Rental charges not timely collected. Monies not timely deposited.Monies not timely deposited. Sales Tax not collected for Commercial Leases.Sales Tax not collected for Commercial Leases. Incorrect allocation for utility charges.Incorrect allocation for utility charges.

4848



Employee accepting payment from lessee. During Employee accepting payment from lessee. During August 2006, a lessee sent a $180 check to the August 2006, a lessee sent a $180 check to the school for payment of theater technician’s services. school for payment of theater technician’s services. However, the check was made payable to the However, the check was made payable to the technician instead of the school.technician instead of the school.

No supervisor review and approval was obtained No supervisor review and approval was obtained prior to inputting into the payroll system.prior to inputting into the payroll system.

Audit conclusions were referred to Police and Audit conclusions were referred to Police and Personnel for further investigations.Personnel for further investigations.

4949


12.12. Audit of Vending Machines (September 14, Audit of Vending Machines (September 14, 2007)2007)


Schools with full-service vending machines Schools with full-service vending machines appeared to be 3% to 30% more profitable than appeared to be 3% to 30% more profitable than those with self-service vending machines.those with self-service vending machines.

Schools with both services seemed to perform Schools with both services seemed to perform even better.even better.

5050


12.12. Audit of Vending Machines (September 14, Audit of Vending Machines (September 14, 2007)2007)

As a result, the audit recommended that schools As a result, the audit recommended that schools consider using full-service vending machines. consider using full-service vending machines. Other advantages of having full-service machines Other advantages of having full-service machines include:include:

Eliminating the risk of inventories loss or loss in cash Eliminating the risk of inventories loss or loss in cash collections involved with self-service vending machinescollections involved with self-service vending machines

Eliminating carrying cost for inventoriesEliminating carrying cost for inventories

Reducing staff time associated with maintaining vending Reducing staff time associated with maintaining vending machinesmachines

5151


13.13. Audit of IT Security Enhancement Audit of IT Security Enhancement & Control (September 14, 2007)& Control (September 14, 2007)

Overall, the security enhancements and Overall, the security enhancements and procedures appeared sufficient, and procedures appeared sufficient, and should be able to detect and prevent should be able to detect and prevent unauthorized access to the District’s unauthorized access to the District’s computer system.computer system.

5252

Performance AuditsPerformance Audits14.14. Audit of Purchasing Card Program Audit of Purchasing Card Program

(September 14, 2007)(September 14, 2007)

The review of sample transactions found that:The review of sample transactions found that: Eight non-travel related items purchased exceeded the $750 Eight non-travel related items purchased exceeded the $750

single transaction limitsingle transaction limit Nine receipts were missingNine receipts were missing

Review of transactions for 639 cardholders indicated Review of transactions for 639 cardholders indicated that:that:

48 (or 8%) of them split charges for non-travel related 48 (or 8%) of them split charges for non-travel related transactionstransactions

87 (14%) of 639 P-Cards were never used, but are still valid.87 (14%) of 639 P-Cards were never used, but are still valid. 22 (17%) of 126 monthly 22 (17%) of 126 monthly End-of-Cycle Checklist for End-of-Cycle Checklist for

CardholderCardholder Forms were not completed as required. This form Forms were not completed as required. This form provides program oversight and reconciliation for purchases.provides program oversight and reconciliation for purchases.

5353

Performance AuditsPerformance Audits15.15. Audit of Corrective Actions for Leasing of Audit of Corrective Actions for Leasing of

School Facilities (October 12, 2007)School Facilities (October 12, 2007)

The The 2004 and 2005 Annual Audits of School Internal 2004 and 2005 Annual Audits of School Internal FundsFunds revealed widespread inconsistencies and non- revealed widespread inconsistencies and non-compliance in leasing of school facilities; specifically, compliance in leasing of school facilities; specifically, lease and timelines in collection of rentals.lease and timelines in collection of rentals.

Noncompliance continuedNoncompliance continued

Some staff did not receive trainingSome staff did not receive training

Prequalification Request should include supporting Prequalification Request should include supporting documentation – Neither proof of insurance nor proof of non-documentation – Neither proof of insurance nor proof of non-profit status was required to be submitted to Real Estate for profit status was required to be submitted to Real Estate for the prequalification processthe prequalification process

Standardization at schools neededStandardization at schools needed

Inconsistent policies, procedures, and documentsInconsistent policies, procedures, and documents

Leasing documents need clarificationLeasing documents need clarification

5454


15.15. Audit of Corrective Actions for Leasing of Audit of Corrective Actions for Leasing of School Facilities (October 12, 2007)School Facilities (October 12, 2007)

In response,In response,

The Real Estate Department has increased the The Real Estate Department has increased the number of group and individual one-on-one training number of group and individual one-on-one training sessions.sessions.

Current Rent Fee Schedules have been provided to Current Rent Fee Schedules have been provided to all schools and is now available on the Real Estate all schools and is now available on the Real Estate Services Department websiteServices Department website..

5555


15.15. Audit of Corrective Actions for Audit of Corrective Actions for Leasing of School FacilitiesLeasing of School Facilities

(October 12, 2007)(October 12, 2007)

Leasing activities will be computerizedLeasing activities will be computerized..

A training program on policy, procedures and A training program on policy, procedures and proper completion of forms has been created proper completion of forms has been created and implemented in 2007. This supplemental and implemented in 2007. This supplemental program was offered four times focusing on the program was offered four times focusing on the four different geographic locations within the four different geographic locations within the County.County.

5656


15.15. Audit of Corrective Actions for Leasing of Audit of Corrective Actions for Leasing of School Facilities (October 12, 2007)School Facilities (October 12, 2007)

The attendance at this program was strongly The attendance at this program was strongly recommended and well attended. This program’s recommended and well attended. This program’s attendance will become mandatory starting in FY attendance will become mandatory starting in FY 07/08. The CAFM Leasing component will have an 07/08. The CAFM Leasing component will have an online training supplement that will not replace, but online training supplement that will not replace, but complement the ongoing training program.complement the ongoing training program.

Prospective lessees are provided with a checklist of Prospective lessees are provided with a checklist of documents, at the time of prequalification.documents, at the time of prequalification.

5757

Performance AuditsPerformance Audits16.16. Audit of Hurricane Recovery/ Audit of Hurricane Recovery/

Reimbursement from FEMAReimbursement from FEMA(December 7, 2007)(December 7, 2007)

Repair costs for damage were billed to FEMA in one Repair costs for damage were billed to FEMA in one singe billing. This resulted in holding up some bills singe billing. This resulted in holding up some bills over an extended period after the costs had been over an extended period after the costs had been paid.paid.

The oldest payments for repair work were not The oldest payments for repair work were not submitted to FEMA for reimbursement.submitted to FEMA for reimbursement.

95% of the repair work had been completed as of 95% of the repair work had been completed as of June 14, 2007, for damage caused by Hurricane June 14, 2007, for damage caused by Hurricane Wilma. However, only 50% of the repair expenses Wilma. However, only 50% of the repair expenses had been submitted to FEMA for reimbursement.had been submitted to FEMA for reimbursement.

5858


17.17. Audit of Revenue Collection Procedures Audit of Revenue Collection Procedures (December 7, 2007)(December 7, 2007)

District Administration Center Cafeteria - Controls District Administration Center Cafeteria - Controls appeared adequate appeared adequate

Safe School Institute Training Programs - No Safe School Institute Training Programs - No records maintained for revenue collectedrecords maintained for revenue collected

Annual Gold Fundraising Event – Inadequate Annual Gold Fundraising Event – Inadequate accountability for ticket salesaccountability for ticket sales

5959


18.18. Audit of Freedom Shores Elementary PTA’s Audit of Freedom Shores Elementary PTA’s Bank Account (December 7, 2007)Bank Account (December 7, 2007)

Support for expenses not availableSupport for expenses not available

Improper check cardsImproper check cards

6060


19.19. Special Audit of Panther Run Elementary Special Audit of Panther Run Elementary School (December 7, 2007)School (December 7, 2007)

Referral for investigationReferral for investigation

Referred to State Attorney for further actionsReferred to State Attorney for further actions

Checks substituted stolen cash ($6,819)Checks substituted stolen cash ($6,819)

6161


20.20. Special Audit of Loggers Run Middle School Special Audit of Loggers Run Middle School (December 7, 2007)(December 7, 2007)



$8,609 in cash substituted by checks$8,609 in cash substituted by checks

Bookkeeper had full access to drop safeBookkeeper had full access to drop safe

Bookkeeper received checks and prepared Bookkeeper received checks and prepared Monies Monies Collected ReportsCollected Reports

6262


21.21. Special Audit of Atlantic High School Special Audit of Atlantic High School (December 7, 2007)(December 7, 2007)



$2,815 missing$2,815 missing

Internal control deficiencies Internal control deficiencies

6363


22.22. Special Audit of Diamond View Elementary Special Audit of Diamond View Elementary School’s SACC Program (January 18, 2008)School’s SACC Program (January 18, 2008)

Referral for investigationReferral for investigation• SACC director resignedSACC director resigned• Bookkeeper received written reprimandBookkeeper received written reprimand

$14,634 in cash missing$14,634 in cash missing

$18,153 in SACC Summer Camp receipts missing$18,153 in SACC Summer Camp receipts missing

SACC monies not deposited in a timely mannerSACC monies not deposited in a timely manner

6464

Performance AuditsPerformance Audits23.23. Special Audit of West Riviera Elementary Special Audit of West Riviera Elementary

School’s Program (January 18, 2008)School’s Program (January 18, 2008) Referral for investigationReferral for investigation

• SACC director resignedSACC director resigned

$28,611 in SACC fees missing$28,611 in SACC fees missing

SACC director maintained two sets of student SACC director maintained two sets of student attendance recordsattendance records

Sign-out sheets missing or falsifiedSign-out sheets missing or falsified

Kids Care database not properly maintainedKids Care database not properly maintained

Monies not timely depositedMonies not timely deposited

Monies Collected Reports not properly completedMonies Collected Reports not properly completed

Student safety violationsStudent safety violations

6565


24.24. Audit of Boynton Beach High School’s Audit of Boynton Beach High School’s Transcript Fees (February 20, 2008)Transcript Fees (February 20, 2008)

As much as $975 in transcript revenues could be As much as $975 in transcript revenues could be missingmissing

Other control weaknessesOther control weaknesses• Monies Collected Reports (MCR) did not indicate the Monies Collected Reports (MCR) did not indicate the

details of collectionsdetails of collections• Cash box was stored in an unlocked drawer.Cash box was stored in an unlocked drawer.

6666


25.25. Audit of Wellington Elementary School’s Audit of Wellington Elementary School’s Gasoline Purchases and Vending Machines Gasoline Purchases and Vending Machines (February 20, 2008)(February 20, 2008)


Unreasonable amount of gasoline was purchased -Unreasonable amount of gasoline was purchased -141 gallons of gasoline purchased in five weeks141 gallons of gasoline purchased in five weeks

6767


26.26. Audit of Lake Worth High School’s Flea Audit of Lake Worth High School’s Flea Market Revenue Collection (March 14, 2008)Market Revenue Collection (March 14, 2008)

Money collected from vendors cannot be deposited Money collected from vendors cannot be deposited into the school’s drop safeinto the school’s drop safe

No verification of collectionsNo verification of collections

6868


27.27. Audit of Alternative Education Audit of Alternative Education Department’s Travel Expenses (March 14, Department’s Travel Expenses (March 14, 2008)2008)

705% increase in travel expenses705% increase in travel expenses

Repeated requests to increase P-Card spending Repeated requests to increase P-Card spending limitlimit

Lax oversight in travel expensesLax oversight in travel expenses

6969


28.28. Audit of Independence Middle School’s Audit of Independence Middle School’s Student Enrollment Records (March 14, Student Enrollment Records (March 14, 2008)2008)

September 7, 2007, student count inflated by 24 September 7, 2007, student count inflated by 24 studentsstudents

Full Time Equivalent (FTE) Fall Survey inflated by Full Time Equivalent (FTE) Fall Survey inflated by 23 students23 students

7070


29.29. Audit of Collection of School Impact Fees Audit of Collection of School Impact Fees (May 16, 2008)(May 16, 2008)

The School District did not receive any report from The School District did not receive any report from the County regarding activity in the Impact Fee Trus the County regarding activity in the Impact Fee Trus AccountsAccounts

Impact Fees properly assessedImpact Fees properly assessed

7171

Charter SchoolsCharter Schools

1.1. Analysis of Charter School Audit Analysis of Charter School Audit Reports for Fiscal Year 2006 Reports for Fiscal Year 2006 (February 16, 2007)(February 16, 2007)

14 (39%) of the 36 charter school audit reports had 14 (39%) of the 36 charter school audit reports had no major findings to report (Amended subsequent to no major findings to report (Amended subsequent to meeting)meeting)

The other 22 (61%) charter school audit reports The other 22 (61%) charter school audit reports included other major findings in internal control included other major findings in internal control deficiencies or instances of noncompliance.deficiencies or instances of noncompliance.

7272


1.1. Analysis of Charter School Audit Reports Analysis of Charter School Audit Reports for Fiscal Year 2006 (February 16, 2007)for Fiscal Year 2006 (February 16, 2007)

• Findings included (in order of frequency):Findings included (in order of frequency): Charter Contract ComplianceCharter Contract Compliance Capital AssetsCapital Assets Records Management RelatedRecords Management Related Other Expenditures/Revenue RelatedOther Expenditures/Revenue Related Cash ControlsCash Controls Payroll & Personnel AdministrationPayroll & Personnel Administration Budget AdministrationBudget Administration Separation of DutiesSeparation of Duties Policies & ProceduresPolicies & Procedures Miscellaneous FindingsMiscellaneous Findings Charter School Board FindingsCharter School Board Findings

7373



26 (72%) of the 36 charter schools reported a positive year-26 (72%) of the 36 charter schools reported a positive year-end net assets, while 10 (28%) schools reported a negative end net assets, while 10 (28%) schools reported a negative net assets balance.net assets balance.

None of the 36 audit reports included findings that were None of the 36 audit reports included findings that were considered by their independent auditors to be material considered by their independent auditors to be material weaknesses in internal control.weaknesses in internal control.

Audit reports for 10 of the charter schools indicated a Audit reports for 10 of the charter schools indicated a Financial Emergency Condition pursuant to Financial Emergency Condition pursuant to Florida Statute Florida Statute 218.503’s218.503’s definition. Six of these 10 audit reports included a definition. Six of these 10 audit reports included a statement by the CPAs discussing the school’s financial statement by the CPAs discussing the school’s financial stability or ability to continue operations on an ongoing basis.stability or ability to continue operations on an ongoing basis.

7474



Pursuant to Pursuant to Florida Statute 218.503Florida Statute 218.503, and , and 1002.33 (9)(g)1002.33 (9)(g), , charter schools must notify the School District within 30 days charter schools must notify the School District within 30 days after receipt of a financial audit that finds the charter school to after receipt of a financial audit that finds the charter school to be in a state of financial emergency, and must file a detailed be in a state of financial emergency, and must file a detailed financial recovery plan.financial recovery plan.

None of the 36 audits reports included findings that were None of the 36 audits reports included findings that were considered by their independent auditors to be material considered by their independent auditors to be material weaknesses in internal control.weaknesses in internal control.

7575


2.2. Follow-up Audit of Survivor Charter Follow-up Audit of Survivor Charter Schools to The Audit Committee (December Schools to The Audit Committee (December 8, 2006)8, 2006)

The Follow-Up Audit found additional evidence The Follow-Up Audit found additional evidence supported and confirmed many of the January 13, supported and confirmed many of the January 13, 2006, conclusions:2006, conclusions:

The compensations paid to the West Palm Beach and The compensations paid to the West Palm Beach and Boynton Beach Principals ($139,378 and $163,412 Boynton Beach Principals ($139,378 and $163,412 respectively), as well as the schools bookkeeper ($61,027) respectively), as well as the schools bookkeeper ($61,027) appeared to be excessive, in comparing to the District’s appeared to be excessive, in comparing to the District’s average salaries for respective employees.average salaries for respective employees.

The $25,028 in bonuses given to the West Palm Beach The $25,028 in bonuses given to the West Palm Beach Principal appeared to be inappropriate.Principal appeared to be inappropriate.

7676

Charter SchoolsCharter Schools2.2. Follow-up Audit of Survivor Charter Follow-up Audit of Survivor Charter

Schools to The Audit Committee (December Schools to The Audit Committee (December 8, 2006)8, 2006)

The West Palm Beach campus paid the Boynton Beach The West Palm Beach campus paid the Boynton Beach Principal $10,500 for unused sick leave, even though he was Principal $10,500 for unused sick leave, even though he was not employed by that campus.not employed by that campus.

The Boynton Beach Principal received $15,000 in regular The Boynton Beach Principal received $15,000 in regular wages while on personal leave for six weeks.wages while on personal leave for six weeks.

West Palm Beach Campus transferred $50,000 to establish a West Palm Beach Campus transferred $50,000 to establish a legal defense Fund, and apparent violations of Florida legal defense Fund, and apparent violations of Florida Sunshine Law.Sunshine Law.

Parents not members of governing board as required.Parents not members of governing board as required.

Some assets not recovered from both campuses.Some assets not recovered from both campuses.

7777


3.3. Audit of Corebridge Educational Academy Audit of Corebridge Educational Academy Charter School (January 19, 2007)Charter School (January 19, 2007)

Although the school was closed abruptly by the charter Although the school was closed abruptly by the charter school operation during our audit, and certain school operation during our audit, and certain information was not available, the District was required information was not available, the District was required by Auditing Standards and School District Policy to by Auditing Standards and School District Policy to release the report. Due to the failure of Corebridge to release the report. Due to the failure of Corebridge to provide the District with certain information, several provide the District with certain information, several areas could not be audited.areas could not be audited.

7878



Major conclusions of the Corebridge Audit include:Major conclusions of the Corebridge Audit include:

Confidential Student Information and Financial Records Confidential Student Information and Financial Records Discarded, Scattered around Dumpster – Discarded, Scattered around Dumpster – Discarding of Discarding of public records is a violation of public records is a violation of Florida Statute 119Florida Statute 119. Also, . Also, Florida Statute 1022.22Florida Statute 1022.22 stipulates that every student has the stipulates that every student has the a right to privacy with respect to educational records.a right to privacy with respect to educational records.

7979

Charter SchoolsCharter Schools3.3. Audit of Corebridge Educational Academy Audit of Corebridge Educational Academy

Charter School (January 19, 2007)Charter School (January 19, 2007)

Dysfunctional Governing BoardDysfunctional Governing Board

Required Insurance Coverage Cancelled for Non Payment Required Insurance Coverage Cancelled for Non Payment of Premiumof Premium

School Continually Unwilling to Provide Financial School Continually Unwilling to Provide Financial RecordsRecords

Repeatedly Failed to Take Corrective ActionRepeatedly Failed to Take Corrective Action

Financial EmergencyFinancial Emergency

Inappropriate Uses of Public MoniesInappropriate Uses of Public Monies

8080



Other findings included:Other findings included:

Total Lack of Accountability and Internal ControlsTotal Lack of Accountability and Internal Controls

Some Assets Not Recovered from the SchoolSome Assets Not Recovered from the School

8181


4.4. Audit of The IMAGINE Charter Audit of The IMAGINE Charter School, Inc. (January 19, 2007)School, Inc. (January 19, 2007)

Deteriorating Financial ConditionDeteriorating Financial Condition Potentially Fraudulent DocumentsPotentially Fraudulent Documents Poor Fiscal ManagementPoor Fiscal Management Conflicts of Interest and Related Party Conflicts of Interest and Related Party

TransactionsTransactions

8282

Charter SchoolsCharter Schools5.5. Audit of G-Star School of the Arts for Audit of G-Star School of the Arts for

Motion Pictures and TelevisionMotion Pictures and Television(January 19, 2007)(January 19, 2007)


The school did not maintain documentation that The school did not maintain documentation that demonstrated the reimbursement amount fully demonstrated the reimbursement amount fully compensated the school for the Caribbean Cruise compensated the school for the Caribbean Cruise expenses incurred.expenses incurred.

The Governing board awarded the founder a The Governing board awarded the founder a $150,000 bonus but it was not disclosed or $150,000 bonus but it was not disclosed or recorded on any of the school’s financial records. recorded on any of the school’s financial records.

8383


5.5. Audit of G-Star School of the Arts for Audit of G-Star School of the Arts for Motion Pictures and TelevisionMotion Pictures and Television(January 19, 2007)(January 19, 2007)

Free use of facilities by for-profit businessesFree use of facilities by for-profit businesses

Supplies and two-year free use of a building for a Supplies and two-year free use of a building for a private for-profit companyprivate for-profit company

$2,700 paid to contractor$2,700 paid to contractor

Poor record keepingPoor record keeping

School founder overpaid in errorSchool founder overpaid in error

8484


5.5. Audit of G-Star School of the Arts for Audit of G-Star School of the Arts for Motion Pictures and TelevisionMotion Pictures and Television

(January 19, 2007)(January 19, 2007)

Use of facilities without lease agreementsUse of facilities without lease agreements

Inadequate backup documentation maintainedInadequate backup documentation maintained

Tenant did not undergo required criminal Tenant did not undergo required criminal background screeningbackground screening

8585


6.6. Audit of FTE and CSR Requirements Submitted Audit of FTE and CSR Requirements Submitted by Chancellor Charter School at Lantanaby Chancellor Charter School at Lantana(May 16, 2008)(May 16, 2008)

Inaccurate Student/Class Assignment RecordsInaccurate Student/Class Assignment Records• 6 classes did not exist6 classes did not exist• Errors caused by misunderstandingErrors caused by misunderstanding

Noncompliance with Class Size Reduction (CSR) Noncompliance with Class Size Reduction (CSR) RequirementsRequirements

• K-3 did not meet CSR requirementsK-3 did not meet CSR requirements• 84 students assigned to 6 non-existing classes84 students assigned to 6 non-existing classes• 4 different classes reportedly housed by the same 2 4 different classes reportedly housed by the same 2

classroomsclassrooms

8686

Other InvolvementsOther Involvements

1.1. Assist the Charter School Department in Assist the Charter School Department in revising the model revising the model Charter AgreementCharter Agreement for for charter schoolscharter schools

2.2. Assist Legal Department in preparing for legal Assist Legal Department in preparing for legal proceedings related to auditsproceedings related to audits

3.3. Assist School Police & Employee Relations Assist School Police & Employee Relations Departments in their investigation of Departments in their investigation of improprietiesimproprieties

4.4. Assist Employee Relations Department in Assist Employee Relations Department in designing training for certain employeesdesigning training for certain employees

8787


Value added to our existing management Value added to our existing management controls and accountabilitiescontrols and accountabilities

Value added to the integrity of our systemValue added to the integrity of our system

Strengthening the control systemStrengthening the control system

8888


Ultimate results:Ultimate results: Protect our studentsProtect our students Protect school administratorsProtect school administrators Safeguard assets and ensure compliance with laws, Safeguard assets and ensure compliance with laws,

School Board Policies & guidelinesSchool Board Policies & guidelines Better controls resulting in increase in revenuesBetter controls resulting in increase in revenues Better control in operating expensesBetter control in operating expenses Provide deterrent for potential abuse of the systemProvide deterrent for potential abuse of the system Promote public confidence in the school system Promote public confidence in the school system

through public transparency, professional through public transparency, professional independence, & objective reportingindependence, & objective reporting

8989

OthersOthers

KPMG’s Management Letter for KPMG’s Management Letter for Year-Ended June 30, 2007 (February 16, 2008)Year-Ended June 30, 2007 (February 16, 2008)

No changes in significant accounting policies.No changes in significant accounting policies.

No significant unusual accounting transactions were No significant unusual accounting transactions were encountered for which there is lack of authoritative encountered for which there is lack of authoritative guidance or consensus.guidance or consensus.

Audit adjustments were done without objections from Audit adjustments were done without objections from the District.the District.

There was one Reportable Condition and four other There was one Reportable Condition and four other comments in the Management Letter.comments in the Management Letter.

9090

OthersOthers


Reportable Conditions:Reportable Conditions:

Detailed Account AnalysisDetailed Account Analysis - The accounting department did not - The accounting department did not perform reviews and analyses of general ledger accounts to ensure perform reviews and analyses of general ledger accounts to ensure that information is accurately and completely reported. This that information is accurately and completely reported. This represents a deficiency in the design or operations of internal represents a deficiency in the design or operations of internal control and could adversely affect the School District’s ability to control and could adversely affect the School District’s ability to record, process, summarize, and report financial data consistent record, process, summarize, and report financial data consistent with the assertions of management in the financial statements.with the assertions of management in the financial statements.

Staff agreed with the finding, and stated that some key accounting Staff agreed with the finding, and stated that some key accounting staff members and the dedication of resources to the ERP staff members and the dedication of resources to the ERP implementation limited the department’s level of account analysis. implementation limited the department’s level of account analysis. The increasing complexity of some financial transactions also The increasing complexity of some financial transactions also requires additional analysis. The District plants to fill current requires additional analysis. The District plants to fill current accountant vacancies and provide staff development to ensure accountant vacancies and provide staff development to ensure accounts are analyzed at an in-depth level on a periodic basis.accounts are analyzed at an in-depth level on a periodic basis.

9191

OthersOthers


Other CommentsOther Comments

Compensated Absences – Terminal Leave PayoutCompensated Absences – Terminal Leave Payout - - The School The School District’s written policy regarding annual and sick leave payout upon District’s written policy regarding annual and sick leave payout upon separation is not consistent with the practice that has been implemented separation is not consistent with the practice that has been implemented by management.by management.

Testing of Recovery ProceduresTesting of Recovery Procedures - Formal testing of recovery - Formal testing of recovery procedures is not part of the School District’s regular backup and procedures is not part of the School District’s regular backup and recovery process.recovery process.

Password Change PolicyPassword Change Policy - The School District’s policy for password - The School District’s policy for password maintenance can be overridden by system Super-users.maintenance can be overridden by system Super-users.

Improved Security ProcessImproved Security Process - KPMG became aware of security incident - KPMG became aware of security incident regarding the information system during the audit. Once made aware, regarding the information system during the audit. Once made aware, the School District personnel made several changes over the security.the School District personnel made several changes over the security.

9292

2007 Principal Survey Results2007 Principal Survey Results

2007 Principal Survey conducted by the2007 Principal Survey conducted by theDivision of Performance AccountabilityDivision of Performance Accountability

Departments were rated from 1 to 5, with 5 being the Departments were rated from 1 to 5, with 5 being the highesthighest

Audit Department was rated 3.96Audit Department was rated 3.96

Average for all departments was rated 4.11Average for all departments was rated 4.11

9393

2008 Principal Survey Results2008 Principal Survey Results

In the 2008 Principal Survey, 78.6% of principals rankedIn the 2008 Principal Survey, 78.6% of principals rankedthe Audit Department either “4” or “5” in the following areas:the Audit Department either “4” or “5” in the following areas:

Courteous and respectfulCourteous and respectful Timeliness of responseTimeliness of response Timeliness of completionTimeliness of completion Follow throughFollow through Useful informationUseful information Guidance and directionGuidance and direction CollaborationCollaboration Adjustments as neededAdjustments as needed KnowledgeableKnowledgeable

9494

Projects for 2008-09 Audit PlanProjects for 2008-09 Audit Plan

Proposed Audit Projects for 2008-09

1 Joint Meeting With The School Board & Audit Committee October 22, 2008 Wednesday, 3:30 p.m.

Documents

sacc revenues

sacc students

findings areas

sacc program sacc program

improvement areas

total slide

community school revenues

lease prequalification