Audit of. Olympic Heights High School Drama Ticket Sales

Transcription

1 Audit of Olympic Heights High School Drama Ticket Sales July 12, 2007 Report

2 Audit of Olympic Heights High School Drama Ticket Sales Table of Contents Page PURPOSE AND AUTHORITY 1 SCOPE AND METHODOLOGY 1 BACKGROUND 2 CONCLUSIONS 2 1. $2,464 Shortfall 2 2. Improvement Needed in Internal Controls 3 APPENDIX Management s Response 5

3 THE SCHOOL DISTRICT OF LUNG CHIU, CPA ARTHUR C. JOHNSON, Ph.D. PALM BEACH COUNTY, FLORIDA DISTRICT AUDITOR SUPERINTENDENT OFFICE OF THE DISTRICT AUDITOR 3346 FOREST HILL BLVD., B-302 WEST PALM BEACH, FL (561) FAX: (561) M E M O R A N D U M TO: FROM: Honorable Chair and Members of the School Board Arthur C. Johnson, Ph.D., Superintendent of Schools Chair and Members of Audit Committee Lung Chiu, CPA, District Auditor DATE: July 12, 2007 SUBJECT: Audit of Olympic Heights High School Drama Ticket Sales PURPOSE AND AUTHORITY In response to the request of the Principal of Olympic Heights High School, we have audited the school s Drama Department Ticket Sales for the period July 1, 2006, through January 30, The primary objective of the audit was to determine if monies collected for sale of Fall 2006 and Spring 2007 Shows tickets were properly accounted for and deposited into the school s Internal Funds Account. SCOPE AND METHODOLOGY The audit was performed in accordance with Government Auditing Standards by Susan Miller, CIA, from January 30, to February 9, 2007, and included: Reviewing the school s ticket sales documentation Examining unsold tickets Examining the school s General Ledger records Reviewing revenue collection and cash receipt procedures Interviewing school staff Draft findings were sent to the school for review and comments. Management response is included in the Appendix. We appreciate the courtesy and cooperation extended to us by staff during the audit. The final draft report was presented to the Audit Committee at its July 12, 2007, meeting. 1

4 BACKGROUND The school Principal contacted us on January 29, 2007, and expressed a concern that money might be missing from the Drama Department s Spring 2007 Show fundraiser account. The concern was based on the number of unsold tickets and the amount of collections reported in the General Ledger Account (# ). CONCLUSIONS The audit produced the following major conclusions: 1. $2,464 Shortfall Based on the remaining tickets and cash receipts documentation, there was a shortfall of $2,464 in the Spring 2007 Show fundraiser account. Ticket Sales Records for the Spring 2007 Show As of January 31, 2007 # of Tickets Amount ($) Total sales revenues (General Ledger record) $62,608 Tickets available for sales 8,400 Unsold tickets 3,752 Total tickets sold 4,648 Estimated sales revenues (4,648 tickets each) 65,072 Shortfall (176 tickets) ($2,464) Moreover, a total of 4,200 tickets were printed for the Fall 2006 Show, which was sold at $10 each. The General Ledger Account # showed total revenues of $4,876, meaning that 487 tickets were sold. However, since unsold tickets were not retained, there was no assurance if revenues were properly accounted for; and actual receipts could not be reconciled to tickets sold. Management s Response: Administration at Olympic Heights Community High School is currently investigating two different types of ticket seller software. Both programs will print tickets as they are sold. Each program is able to give reports in reference to tickets remaining, tickets sold, complementary tickets, and monies collected at any given time. One type of software, password protected, would be stored on the school server and backed up weekly. The other is web based with passwords for security. 2

5 2. Improvement Needed in Internal Controls No Monitoring of Consultant Contract. Ticket sales management was outsourced to an individual through a Consultant Contract. The school agreed to pay the consultant $2,499 to manage ticket sales for both the Fall 2006 and Spring 2007 Shows. The consultant was also responsible for preparing Monies Collected Reports (MCR) and depositing the collections into the school s drop safe. For the Fall 2006 Show, the consultant also manned the ticket window during the performances, sold tickets, and collected the used ticket stubs. However, there was no independent reconciliation of ticket sales. The school should monitor ticket sales and reconcile unsold tickets with revenues recorded in the General Ledger. Moreover, while school staff had access to the room containing the unsold tickets, the Community School director also had access to the consultant s locked desk. To maintain proper control over unsold tickets, only one person should be assigned as custodian, with sole responsibility of all tickets. Ticket Documentation. Show tickets are printed with different colors for each performance. They also indicated the date, time, row and seat number, and price. A software program was used by the consultant to track ticket sales. The program produced a seating chart of the theatre highlighting tickets sold. However, no documentation was maintained by the school for the inventory of the Show Tickets. Although Ticket Sellers Reports were used by the consultant when depositing monies, the report only included total number of tickets sold. It did not indicate the ending inventory. Internal Accounts Manual, Section 9.8, requires that in order to maintain proper segregation of duties, the Principal must designate the document custodian as someone who has no involvement with the use of the prenumbered form. A Prenumbered Document Inventory Register (PBSD 0160) must be filled out prior to the issuance of the prenumbered form, i.e. tickets. To complete the reconciliation at the end of the show, a seating chart for each show indicating the seats sold should be included with the fundraiser documentation. Management s Response: With both types of software that Olympic Heights Community High School is currently exploring, protection of seller s reports will be built into each program. The school will have access to monitor ticket sales and revenues with full reports at any given time. An inventory of sold and unsold tickets can be presented at any moment with either packages of software. All software on either of the packages being considered will be password protected and the only those with access will be appointed by the principal. One person will be the custodian for the transaction reports. 3

6 In the future, tickets issued will indicate the date, time, row and seat number and price. At the end of the show, a seating chart can be printed indicating seats sold and will be included with the fundraiser documentation. The receipts will be received by only a small number of employees including the custodian of the event (usually Community School A.P.) We are also exploring internet opportunities that will allow less cash being handled at the school site. We are waiting on word from the District regarding a credit card system that will allow this to be similar to other large theaters and performance centers. End of Report 4

7 Appendix Management s Response 5