Internal Audit Department Summary of Business Process Reviews School Year Fall

Transcription

1 Internal Audit Department Summary of Business Process Reviews School Year Fall

2 Table of Contents Page Number Executive Summary. pg. 1 Objectives, Scope, Methodology, and Background.. pg. 2-4 Summary of Findings.... pg. 5 Internal Control Review Results by Area.. pg Appendices East Broad Street School.. pg Hesse K-8 School... pg New Hampstead High School pg Southwest Middle School pg Spencer Elementary School pg

3 Executive Summary The Internal Audit Department has completed a Business Process Review at five schools. The scope of the initial reviews was from July 1, 2014 June 30, All of the schools had findings in multiple areas. See in the table below a breakdown of the findings: Area of Findings Percent of Transactions School Name Total Findings (All Areas) Purchasing/ AP Error Rate SAF Error Rate Student Data Error Rate Purchase Cards Error Rate East Broad Street School % 16% 53% N/A Hesse K-8 School 56 57% 38% 53% N/A New Hampstead High School 54 66% 7% 100% N/A Southwest Middle School 25 38% 15% 17% 0% Spencer Elementary School 63 97% 76% 100% N/A NT = Not Tested A Summary of Review Findings for the current period for all schools in this report can be located on page 5. Responses to these findings can be located in the Appendix section (pages 11-37). 1 P age

4 Objectives, Scope and Methodology The objectives of the reviews were to test internal controls for the business processes at designated schools, and to provide the principal with feedback on how to strengthen controls based on findings (initial review) or on changes implemented as a result of the original review. The scope of the reviews was dependent on the type of report conducted. For an initial report, the previous year data was tested to identify weaknesses in the internal controls from the previous leadership. A follow-up review is completed approximately days after the initial review; it includes transactions completed after the initial review. The purpose of the follow-up review is to determine if changes were made to strengthen the internal control weaknesses originally identified. Additional follow-up reviews are conducted when the internal control environment at a school/site merits a needs improvement or inadequate rating (see page 6). Follow-up reviews are conducted annually until the internal control environment is rated satisfactory. The procedures for the reviews included a review of written policies and procedures, and sampling transactions for compliance by reviewing supporting documentation and electronic records. Internal Audit conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that the audit be planned and performed to obtain sufficient, appropriate evidence to provide reasonable basis for findings and conclusions based on the audit objectives. Internal Audit believes the evidence obtained provides a reasonable basis for the findings and conclusions based on the audit objectives. Background Business Process Reviews are conducted each time a principal is assigned to a different school. Selected business processes at the school are reviewed to assist the principal in determining if internal controls are functioning properly or if additional assistance is needed. Internal Audit may schedule Business Process Reviews at schools when the leadership has not changed. The goal is to review each school at least once every five years. This assures principals and Central Office administrators that internal controls continue to work as designed for new and established principals. Internal Control Questionnaire Internal controls help establish accountability and provide feedback to managers on whether operations are working as expected. Controls are not meant to be a trap to catch someone not following procedures, but rather a quick check to enable everyone to do the job right. Because internal controls involve specific procedures for tasks, a system of internal controls should be a part of making the work smoother for everyone. Although some employees may feel that internal controls are restrictive, controls are actually tools to help ensure that organizational objectives are met. When internal controls are not functioning as intended, there is an increase in the risk of not meeting organizational objectives. Resources may be wasted as a result. Internal control failures often result in employees having to spend unnecessary time in order to correct a problem; they may also result in violations of law or regulations that jeopardize State, Federal, or other funds. Most importantly, they may undermine the District s ability to serve its students. 2 P age

5 Everyone in an organization has some responsibility for internal control, but an organization s leaders are ultimately responsible and must assume ownership of the internal controls for their area of responsibility. Internal Audit has developed a list of questions to assess the internal control environment in a school. When there is a change in principal at a school, it is particularly important to assess whether the internal controls for key business processes function as they should, and whether the internal control environment the attitude about internal controls - at the school site is as strong as it should be. This assessment will help the leadership at the school site determine whether changes are needed in order to effectively manage the business processes. The Internal Control Questionnaire (ICQ) is completed jointly by the Internal Auditor and the principal at the beginning of each initial Business Process Review. Purchasing and Accounts Payable Board Policy DJE, Purchasing, controls the District purchasing process. The District s Purchasing Manual provides detailed procedures. The purchasing process is a combined effort from both the Central Office and the schools/sites. Items are requested or ordered by a school site; electronic approvals are obtained based on the dollar amount and funding source. Once all approvals are applied, the purchase order is generated and sent to the vendor. The items are then shipped to the school site, where the order is received and verified by the secretary. Electronic verification of the items received is to be entered in the District s Financial System (LEAFS) within 72 hours. Once an invoice is received and reviewed by the Accounts Payable Department, it is matched to the electronic receiving information and payment is made to the vendor. Student Activity Funds Student Activity Funds provide a school or site with the ability to collect funds and purchase items for school related functions. Student Activity Fund (SAF) procedures are outlined in the Student Activity Fund Handbook. The work processes are conducted at the school site by the administrative secretary. The Student Activity Fund Coordinator, in the Division of Finance, supports and monitors the schools or sites to ensure compliance with the District s policies and procedures. Funds may be collected by designated sponsors at each school and then given to the secretary. Each transaction is documented in the District s SAF computer program called SchoolCash.net; funds are then deposited into the bank. Check Request Forms are used to document each disbursement from the account. Student Data The Disciplinary Referral process is documented in the District s Student Data Accountability Procedures Manual. The process requires a teacher or administrator to complete the Disciplinary Referral Form. The completed form is given to the information specialist, who enters the information into the District s Student Information System, PowerSchool. The student s attendance is entered by the teacher into PowerSchool s teacher component, PowerTeacher. The information specialist is required to adjust the attendance in PowerSchool of any student who is absent from class due to a disciplinary action, such as inschool suspension, out of school suspension, etc. This information is reported annually to the Georgia Department of Education; it is also the basis for ad hoc reports used by the District and requested by community members throughout the year. 3 P age

6 Purchasing Cards The District s Purchasing Card Manual provides instructions for small purchases with a District-issued credit card, known as Purchasing Cards. Purchasing Cards may be issued to principals; each card is connected to a specific account line in a school s non-salary budget. The principal may request cards for more than one budget line. All transactions are recorded on a transaction log, with supporting documentation attached. On a monthly basis, the transaction log is reconciled with the bank statement at the school/site by the secretary. The Division of Finance is notified that the reconciliation is complete; the supporting documentation is maintained at the school/site. 4 P age

7 Summary of Findings Current Period School Total Per School Current Year Findings Area of Findings East Broad Street School 56 Purchasing SAF Student Data Hesse K-8 School 56 Purchasing SAF Student Data New Hampstead High School 54 Purchasing SAF Student Data Southwest Middle School 25 Purchasing SAF Student Data Spencer Elementary School 63 Purchasing SAF Student Data Total P age

8 Internal Control Review Results by Area Internal Control Legend CRITERIA Policy & Procedures Compliance Information Risk (Student Data Only) Effect SATISFACTORY (0% - 19% Findings) In compliance Data is generally reliable Not likely to impact operations or program outcomes NEEDS IMPROVEMENT (20% - 39%) Non-compliance issues exist Data is mostly accurate but can be improved Moderate impact on operations or program outcomes INADEQUATE (40% and Higher) Non-compliance issues are significant or have severe consequences Data is incomplete or inaccurate Negative impact on operations or program outcomes 6 P age

9 Purchasing and Accounts Payable Policy & Procedures Compliance School/Site East Broad Street School SATISFACTORY (0 19% Findings) NEEDS IMPROVEMENT (20% - 39%) INADEQUATE (40% and Higher) % Hesse K-8 School % New Hampstead High School Southwest Middle School Spencer Elementary School % - 38% % Effect Negative impact on operations or program outcomes Negative impact on operations or program outcomes Negative impact on operations or program outcomes Moderate impact on operations or program outcomes Negative impact on operations or program outcomes The most common findings included: The packing list for purchases was not signed and/or dated for 71 of the 147 items tested (48%). There was no packing list on file for 33 of the 147 items tested (22%). The most common reasons for those findings, as reported by school personnel, included: Ignorance of the required procedures. Training covered only the data entry process, not the receiving process. The secretary was aware of the requirement, but forgot to complete the procedure. Teachers were allowed to receive shipments instead of someone in the main office. 7 P age

10 Student Activity Funds Policy & Procedures Compliance School/Site East Broad Street School SATISFACTORY (0 19% Findings) NEEDS IMPROVEMENT (20% - 39%) INADEQUATE (40% and Higher) 16% - - Hesse K-8 School - 38% - New Hampstead High School Southwest Middle School Spencer Elementary School 7% % % Effect Not likely to impact operations or program outcomes Moderate impact on operations or program outcomes Not likely to impact operations or program outcomes Not likely to impact operations or program outcomes Negative impact on operations or program outcomes The most common findings included: Sponsor reports were not signed in 20 of the 134 items tested (15%). Check requests were incomplete in 15 of the 144 items tested (10%). The principal requested and approved the check request in 13 of the 144 items tested (9%). The most common reasons for those findings, as reported by school personnel, included: Ignorance of the required procedures. Inaccurate information provided by District staff regarding sponsor report requirements. Perception that the bookkeeper did not have the authority to enforce the SAF manual procedures. 8 P age

11 Student Data Information Risk School/Site East Broad Street School SATISFACTORY (0 19% Findings) NEEDS IMPROVEMENT (20% - 39%) INADEQUATE (40% and Higher) % Hesse K-8 School % New Hampstead High School Southwest Middle School Spencer Elementary School % 17% % Effect Negative impact on operations or program outcomes Negative impact on operations or program outcomes Negative impact on operations or program outcomes Not likely to impact operations or program outcomes Negative impact on operations or program outcomes The most common findings included: Outdated forms were used in 52 of the 126 items tested (41%). Disciplinary Referral Forms were not signed by the person entering the data in 13 of the 126 items tested (10%). The severity level shown on the Disciplinary Referral Form was missing or was not entered in PowerSchool accurately for 13 of the 126 items tested (10%). The student s attendance record did not agree with the Disciplinary Referral Form in 10 of the 126 items tested (8%). The most common reasons for those findings, as reported by school personnel, included: Failure to communicate the presence of a new form/removal of outdated forms. 9 P age

12 General lack of procedures to double-check data entry either before clicking on the submit button or after the entry is processed. Information Specialists may rely on edit checks provided by the Student Information Services Department to catch any errors. Other duties assigned to the Information Specialist, such as SAF, distract the Information Specialist from her student data duties. School/Site SATISFACTORY (0 19% Findings) Purchase Cards Policy & Procedures Compliance NEEDS IMPROVEMENT (20% - 39%) INADEQUATE (40% and Higher) Effect East Broad Street N/A School Hesse K-8 School N/A New Hampstead N/A - - High School Southwest Middle School Spencer Elementary School 0% Not likely to impact operations or program outcomes N/A No findings were noted in our tests. Only six purchase card transactions were tested in our reviews; all six transaction were from a single school. Use of purchase cards appears to be declining. 10 P age

13 SAVANNAH-CHATHAM COUNTY BOARD OF EDUCATION Internal Audit Department 208 Bull Street, Room 310 Savannah, GA DATE October 22, 2015 Mr. Elijah West, Principal Mrs. Kimberly Stevens, Former Principal East Broad Street School 400 East Broad Street Savannah, GA Dear Mr. West and Mrs. Stevens, Internal Audit has completed a Business Process Review for East Broad Street School. The purpose of this letter is to document the results of that review and to identify actions that have already been taken or that will be taken in the future. Review Objectives The objectives of the review were to test internal controls for the business processes at East Broad Street School, and to provide the principal with feedback on changes implemented as a result of the original internal control review to ensure that internal controls are working as expected. Scope of Review To complete the review, Internal Audit tested a sample of transactions covering the following business processes at East Broad Street School: Purchasing and Accounts Payable, Student Activity Funds, and Student Data. Some transaction testing was performed during July 2015 using data available from the District s mainframe computer systems. This review was completed with site visits to the school on September 14, Internal Audit conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that the audit be planned and performed to obtain sufficient, appropriate evidence to provide a reasonable basis for findings and conclusions based on the audit objectives. Internal Audit believes the evidence obtained provides a reasonable basis for the findings and conclusions based on the audit objectives. 11 P age

14 Background Mr. West was appointed as principal at East Broad Street School on July 2, Mr. West has been employed by SCCPSS for 28 and one-half years. The business processes at East Broad Street School were last reviewed on March 1, Those results are not included in this report. The secretary during the scope of this audit was responsible for the area of Purchasing and Accounts Payable. The secretary was assigned to the school for one and one-half years. She was employed by SCCPSS for two years. She is no longer working in the District. The information specialist is responsible for the area of Student Activity Funds and Student Data. The information specialist has been assigned to this school for 21 years. She has been employed by SCCPSS for 24 years. Results of Review and Opinion The results of this review are listed for each of the business processes on the attachment to this letter. These results show that internal controls need some improvements in the areas of Purchasing and Accounts Payable, Student Activity Funds, and Student Data. Internal Audit also included information that the administration provided regarding the actions the administration has taken or will be taken to strengthen internal controls in each area. These actions should provide the necessary internal control improvements. Internal Audit will schedule additional site visits to determine if progress is made toward strengthening controls in these areas. Internal Audit appreciates the assistance and support provided by the principal and the staff at East Broad Street School in completing this Business Process Review. Sincerely, Kelly Crosby Senior Director, Internal Audit C: Board of Education Audit Committee Superintendent Chief Financial Officer Chief Academic Officer Chief Data and Accountability Officer Chief of Facilities Management and Support Services Chief of Campus Police Chief Human Resources Officer Chief of Public Affairs and Administrative Officer Executive Directors of School Governance 12 P age

15 East Broad Street School Business Process Review September 2015 RESULTS OF REVIEW The results of the Business Process Review at East Broad Street School are described below for each area reviewed. Information that the principal provided describing the actions that have been taken or will be taken are included in italics at the end of each section. PURCHASING AND ACCOUNTS PAYABLE Internal Audit selected 30 purchase orders for review. Internal Audit compared the documentation at the school site to the information in LEAFS, the District s financial accounting system. Internal Audit found the following issues. Seven purchase orders did not have a receiver document with a signature and/or date to show the items were received. Twenty-three purchase orders did not have a receiver document on file. One purchase order was entered after the goods were received. Packing lists or similar documentation that include dates and signatures are an essential part of internal control because they provide evidence that the items were received, who had custody of the items, and that receivers were entered in the LEAFS system within the required time period. Purchase orders use a standard approval process, creating an effective internal control. Ordering items/goods prior to completing a purchase order weakens the established controls. The secretary did not follow District guidelines. The secretary responsible for the errors in our audit is no longer employed by the school district. Recommendation(s): All packages should be routed to a single person for receiving purposes. This person should open the package, compare the contents to the packing list, then sign and date the packing list to create accountability for all items received. After the packing list or similar documentation is signed, the contents of the package can be distributed as necessary, while the packing list is maintained with the purchasing documents. Items should not be ordered prior to the completion of a purchase order. Following the established purchase order process helps to ensure the application of internal controls to purchasing transactions. Actions Taken or To Be Taken All packages will be routed to the administrative secretary. She will open the package, compare the contents to the packing list, sign and date the packing list, and file the signed packing list with purchasing documents. All purchases will be done following the established purchase order process. No items will be ordered without first completing a purchase order. STUDENT ACTIVITY FUNDS Receipts Internal Audit selected 30 receipt transactions for review. The supporting documentation was reviewed for accuracy and completeness. Internal Audit found the following issues: Two Report of Monies Collected Forms could not be located. Five Report of Monies Collected Forms did not support the six deposits documented into SchoolCash.net. Two Report of Monies Collected Forms were each used to document deposits into two separate accounts. Three Report of Monies Collected Forms were used to make one deposit into one account. 13 P age

16 Complete documentation of receipts, including a Report of Monies Collected Form, supports the deposit of money into a specific fund. Completing the account (fund) name/number helps to ensure that money is deposited in the correct fund. Signatures on the Report of Monies Collected Forms establish accountability for the funds. Each Report of Monies Collected Form should be supported with a data entry into SchoolCash.net, as required by the Student Activity Fund Handbook. This allows the movement of funds to remain transparent during the collection the process. Documents should reflect the same amount from the sponsor receipts to the SchoolCash.net receipts to the bank deposit. Disbursements Internal Audit selected 30 disbursement transactions for review. The supporting documentation was reviewed for accuracy and completeness. Internal Audit found the following issues: One disbursement did not follow the SAF guidelines. The disbursement was for a championship ring for the school s coach using student raised funds. One disbursement was for an employee s registration to a professional learning conference. One Check Request Form did not follow District guidelines. The reimbursement was requested by the principal and approved by the principal. All collections for a charity were not disbursed by June 30 as required by the SAF Handbook. The SAF Handbook and the Account Charter establish guidelines for how the funds are received and disbursed. The guidelines should be followed to ensure student activity funds are utilized in the best interest of the students, provide accountability of the funds, and reduce the risk of the misuse of funds. Travel/Registration by a District employee cannot be paid out of Student Activity Funds. The State of Georgia requires that all travel and registration for employees must be reported on a yearly basis. Processing travel through the general ledger provides a reporting mechanism for the District. Transactions conducted in the student activity fund are not connected to the general ledger. Employee travel and registration cannot be tracked by SchoolCash.Net. All charitable funds that are collected should go through the Charities Account. Per the Student Activity Fund Handbook, the total receipts collected should equal the disbursements. The account should have a zero balance by June 30 of the corresponding school year. Transfers All transfers followed District guidelines. The information specialist for the school is also the bookkeeper for Student Activity Funds. The information specialist stated she did not know of all the requirements in the Student Activity Fund Handbook. Recommendation(s): The bookkeeping duties should be given to the school s secretary and not to the information specialist. The school secretary should receive training for Student Activity Funds. Report of Monies Collected Forms should be completed entirely, including fund name/number, receipt numbers (or list of names and amounts collected, if under $5 each), total amount of money collected, reason for collection, and signature of the person submitting the funds. Faculty purchases should not be disbursed from accounts where students raised the funds, as defined in the SAF Handbook. All travel and registration fees must be paid using District funds, not Student Activity Funds. Please contact the Accounts Payable Department for guidance on the process to transfer funds from Student Activity Funds to a general ledger account. Reimbursements or payments should not be requested and approved by the same person. All charitable funds should be disbursed by June 30 of the corresponding school year and should 14 P age

17 be supported by receipts, as required by the Student Activity Fund Handbook. Actions Taken or To Be Taken The administrative secretary is now responsible for bookkeeping duties. She has received Student Activity Funds training. The administrative secretary has been directed that Report of Monies Collected Forms must be completed entirely and signed by the person submitting the funds. There will be no approval by administrator for faculty purchases from accounts where students raised the funds. The administrator will approve payment of travel and registration fees from district funds only. Reimbursements or payments requested by authorized signers must be approved by non-requesting signers. All charitable funds collected will be receipted and disbursed no later than June 30 of the school year in which it was collected. STUDENT DATA Internal Audit selected 30 student discipline incidents for review. Internal Audit compared the Disciplinary Referral Form to the information in PowerSchool, the District s student information system. If the student was assigned in-school or out-of-school suspension, we also checked the student s attendance data for those days. Internal Audit found the following issues: The incident code on six Disciplinary Referral Forms did not match the data entry in PowerSchool. The incident date on three Disciplinary Referral Forms did not match the data entry in PowerSchool. Two students attendance data in PowerSchool did not match the Disciplinary Referral Form. Seven State reportable discipline incidents were not reported to the State. Six severity levels in PowerSchool did not match the Disciplinary Referral Form. Outdated Disciplinary Referral Forms were used for 20 reported incidents. Disciplinary Referral Forms are the basis for mandatory State reporting on disciplinary issues. Fully completing this form, including the referral code, signature of the person entering the information, and disposition of the incident, improves the reliability of the data entered into PowerSchool. Reliable data in the system is essential for effective use of student information, and for reliable reporting to the State. The information specialist is also the bookkeeper for the school. Efforts in ensuring accuracy are not consistent because the employee s concentration is not always on the duties of an information specialist. Recommendation(s): All outdated forms should be removed from the school site. The information specialist should receive additional training in the Disciplinary Referral process. In addition, the information specialist should not handle bookkeeping duties. Disciplinary Referral Forms should be fully completed, including the referral code, name of person making the referral, parent/guardian information, disposition of the incident, signature of the person entering the information, and signature of the person entering the data in order to provide complete and reliable information for State and local reporting. The data included on the Disciplinary Referral Form should be entered in PowerSchool accurately for the discipline incident to provide complete and reliable information for State and local reporting. Attendance data in PowerSchool should agree with the disposition data entered in PowerSchool as reflected on the Disciplinary Referral Form for the discipline incident. Actions Taken or To Be Taken Disciplinary Referral Forms will be completed by the building administrators. The information specialist will receive Disciplinary Referral forms from administrators only. The information specialist will review data entered for accuracy. The information specialist is no longer responsible for bookkeeping duties. 15 P age

18 SAVANNAH-CHATHAM COUNTY BOARD OF EDUCATION Internal Audit Department 208 Bull Street, Room 310 Savannah, GA October 22, 2015 Dr. Lawrence Butler, Principal Hesse K-8 School 9116 Whitfield Avenue Savannah, GA Dear Dr. Butler, Internal Audit has completed a Business Process Review for Hesse K-8 School. The purpose of this letter is to document the results of that review and to identify actions that have already been taken or that will be taken in the future. Review Objectives The objectives of the review were to test internal controls for the business processes at Hesse K-8 School; follow-up reviews provide the principal with feedback on changes implemented as a result of the original internal control review to ensure that internal controls are working as expected. Scope of Review To complete the review, Internal Audit tested a sample of transactions covering the following business processes at Hesse K-8 School: Purchasing and Accounts Payable, Student Activity Funds, and Student Data. Some transaction testing was performed during July 2015 using data available from the District s mainframe computer systems. This review was completed with site visits to the school on August 13, Internal Audit conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that the audit be planned and performed to obtain sufficient, appropriate evidence to provide a reasonable basis for findings and conclusions based on the audit objectives. Internal Audit believes the evidence obtained provides a reasonable basis for the findings and conclusions based on the audit objectives. 16 P age

19 Background Dr. Butler was appointed principal at Hesse K-8 School on July 30, Mr. Butler has been employed by SCCPSS for 14 years. The business processes at Hesse K-8 School were last reviewed on January 30, Those results are not included in this report. The secretary at Hesse K-8 School is responsible for the areas of Purchasing and Accounts Payable, and Student Activity Funds. The secretary has been assigned to this school for five years. She has been employed by SCCPSS for six years. The information specialist is responsible for the area of Student Data. The information specialist has been assigned to this school for 16 years. She has been employed by SCCPSS for 16 years. Results of Review and Opinion The results of this review are listed for each of the business processes on the attachment to this letter. These results show that internal controls need some improvements in the areas of Purchasing and Accounts Payable, Student Activity Funds, and Student Data. Internal Audit also included information that the administration provided regarding the actions the administration has taken or will be taken to strengthen internal controls in each area. These actions should provide the necessary internal control improvements. Internal Audit will schedule additional site visits to determine if progress is made toward strengthening controls in these areas. Internal Audit appreciates the assistance and support provided by the principal and the staff at Hesse K-8 School in completing this Business Process Review. Sincerely, Kelly Crosby Senior Director, Internal Audit C: Board of Education Audit Committee Superintendent Chief Financial Officer Chief Academic Officer Chief Data and Accountability Officer Chief of Facilities Management and Support Services Chief of Campus Police Chief Human Resources Officer Chief Public Affairs and Administrative Officer Executive Directors of School Governance 17 P age

20 ATTACHMENT Hesse K-8 School Business Process Review August 2015 RESULTS OF REVIEW The results of the Business Process Review at Hesse K-8 School are described below for each area reviewed. Information that the principal provided describing the actions that have been taken or will be taken are included in italics at the end of each section. PURCHASING AND ACCOUNTS PAYABLE Internal Audit selected 30 purchase orders for review. Internal Audit compared the documentation at the school site to the information in LEAFS, the District s financial accounting system. Internal Audit found the following issues: Seventeen of the 30 purchase orders did not have a receiving document that was signed and/or dated to show the items were received. The receiver date in LEAFS did not agree with the receiver date on one packing slip. For the same packing slip, the purchase order was not received in LEAFS within 72 hours, as required by the Purchasing Manual. The purchase order was not entered until after the goods were received by the school site. Packing lists or similar documentation that include dates and signatures are an essential part of internal control because they provide evidence that the items were received, who had custody of the items, and that receivers were entered in the LEAFS system within the required time period. Payments to vendors are triggered in part by entering the date the items are received into LEAFS. Prompt entry of receiving information, as required by the District s Purchasing Manual, allows prompt payment to vendors. Purchase orders use a standard approval process, creating an effective internal control. Ordering items/goods prior to completing a purchase order weakens the established controls. This is the first audit since the secretary has been employed in this position. Our last audit was in 2008, she began in The secretary was unaware of the process for documenting the purchasing process. The training offered to her described the data entry process for entering a purchase order and entering a receiver. The documentation needed to support the process was not discussed. She was never given a Purchasing manual during this training. (The Purchasing Manual is available on ACORN.) She also mentioned recent meetings for secretaries were referenced as trainings but were forums for questions or to highlight recent changes in secretarial duties. They did not provide any refresher content. Recommendation(s) All secretarial staff should review the Purchasing Manual provided by the District. All packages should be routed to a single person for receiving purposes. This person should open the package, compare the contents to the packing list, then sign and date the packing list to create accountability for all items received. After the packing list or similar documentation is signed, the contents of the package can be distributed as necessary, while the packing list is maintained with the purchasing documents. Receiving information in LEAFS should reflect the date the goods are received onsite to provide assurance they were received within 72 hours, as required by the Purchasing Manual. Items should not be ordered prior to the completion of a purchase order. Following the established purchase order process helps to ensure the application of internal controls to purchasing transactions. 18 P age

21 Actions Taken or To Be Taken The secretary will sign and date all receiving documents as she now understands the process of signing packing slips upon arrival. The secretary will make sure the receiver date matches the date on the packing slip. The 72 hour rule was not previously understood, but we will follow the timeline more closely. The initial intent was to pay for supplies with a special check request. Once accounts payable denied the request, the secretary was directed to enter a PO to pay for supplies. STUDENT ACTIVITY FUNDS Receipts Internal Audit selected 30 receipt transactions for review. The supporting documentation was reviewed for accuracy and completeness. Internal Audit found the following issues: Three Report of Monies Collected Forms were incomplete. They were missing the date and/or the sponsor s signature. One Report of Monies Collected Form could not be located. The receipts supporting four Report of Monies Collected Forms were missing. One entry in SchoolCash.net, the District s SAF accounting system, was dated four days after the date on the Report of Monies Collected Form. This indicates that the money was collected and held before the entry was made in SchoolCash.net Six monthly sponsor reports were not signed by the sponsor to verify the account activity and balance as required by the SAF Handbook. Eight monthly sponsor reports could not be located. Complete documentation of receipts, including a Report of Monies Collected Form, supports the deposit of money into a specific fund. Completing the account (fund) name/number helps to ensure that money is deposited in the correct fund. Signatures on the Report of Monies Collected Forms establish accountability for the funds. Receipts validate the amount transferred from one person to another in the Student Activity Fund process, i.e. from a teacher or sponsor to the bookkeeper or the bookkeeper to the bank. These receipts establish accountability for the funds. The Student Activity Fund Handbook procedures state that receipts from SchoolCash.net must be issued for all monies collected from all sources when the money is collected. This process ensures that all transactions are recorded promptly and provides a tracking mechanism to ensure that all deposits are recorded. Monthly sponsor reports allow the sponsor to verify that all transactions have been recorded properly in accounts for which they are responsible. It serves as an internal control to ensure that possible data entry errors are recognized and corrected in a timely manner. Disbursements Internal Audit selected 30 disbursement transactions for review. The supporting documentation was reviewed for accuracy and completeness. Internal Audit found the following issues: Two Check Request Forms could not be located. Four Check Request Forms were incomplete. They were missing the fund balance and/or principal s signature. Two of the 30 disbursement transactions did not have supporting documentation. Check request forms are an important part of internal control. By completing the entire check request, the SAF bookkeeper knows how to prepare the check, which fund number to use to generate the check, and can verify that the check is being requested in accordance with the Activity Charter. The fund balance on the check request assures the person approving the request that funds are available for use. Signatures of the person requesting the check, approving the check and printing the check establish accountability for the funds. Complete documentation of expenditures, including a Check Request Form and an invoice, supports the disbursement of money from a specific fund. Completing the account (fund) name/number helps to 19 P age

22 ensure that money is disbursed from the correct fund. Signatures on the Check Request Form establish accountability for the funds. Transfers No transfers were conducted within the scope of the audit. The secretary told Internal Audit that the SAF Coordinator stated that a sponsor could sign the first page of a group of sponsor reports to indicate approval of all the forms. The SAF Coordinator did make this statement with the exception that the principal must make a statement on the first page that he/she has reviewed all of the accounts. The Director of Accounting verified that each individual form should be signed by the sponsor. The secretary indicated that some SAF documentation may have been misplaced during the recent move between buildings. In addition, interruptions in the front office while conducting SAF transactions may account for other errors made. Recommendation(s): Report of Monies Collected Forms should be completed entirely, including fund name/number, receipt numbers (or list of names and amounts collected, if under $5 each), total amount of money collected, reason for collection, and signature of the person submitting the funds. Receipts from the sponsor should be presented along with the Report of Monies Collected Form to the bookkeeper to validate the funds submitted. Deposits should be entered in SchoolCash.net on the day funds are received by the bookkeeper. Monthly sponsor reports should be signed and dated by each activity sponsor to validate the accuracy of the transactions in the account. All check requests should be completed prior to printing a check, including fund name/number, fund balance, purpose of the check, including the principal s signature. Supporting documentation, such as an invoice or a receipt, should be attached to the check request. Invoice(s) should be provided to the bookkeeper as supporting documentation from the person turning in a Check Request Form. Consider providing the secretary with a block of time away from the front office to complete these tasks. Creative scheduling of part-time staff or rotation of duties during non-peak hours should be considered. The principal can look at other schools for best practices in this area. Actions Taken or To Be Taken Due to human error, one Monies Collected form was not located. This is an isolated incident and should not happen again. The bookkeeper will review the Monies Collected forms more closely to assure they are signed and dated. Office staff will review process for issuing receipts with teachers. We are uncertain, but the delay could have been the result of a late submission followed by a long weekend. We will follow the procedure of depositing money within a 24 hour period. All reports would have been signed correctly, but we were given conflicting instructions concerning the process by the SAF coordinator. Office staff will modify process to ensure that all sponsor reports are signed, dated, and submitted in a timely manner. Office staff will be more diligent in filing request forms with each check written. More support has been provided which will assist the secretary with time management. Teachers will be reminded of the expectation of returning invoices/receipts for field trips. 20 P age

23 STUDENT DATA Internal Audit selected 30 student discipline incidents for review. Internal Audit compared the Disciplinary Referral Form to the information in PowerSchool, the District s student information system. If the student was assigned in-school or out-of-school suspension, we also checked the student s attendance data for those days. Internal Audit found the following issues: The action taken code on three Disciplinary Referral Forms did not agree with the data entry in PowerSchool. The discipline incident date on four Disciplinary Referral Forms did not agree with the data entry in PowerSchool. Four student s attendance data in PowerSchool did not match the Disciplinary Referral Form/Discipline Log in PowerSchool. Five severity levels in PowerSchool did not match the Disciplinary Referral Form in PowerSchool. Two State reportable discipline incidents were not reported to the State. Five Disciplinary Referral Forms were not signed by the person entering the data in PowerSchool in the appropriate space. Disciplinary Referral Forms are the basis for mandatory State reporting on disciplinary issues. Fully completing this form, including the referral code, signature of the person entering the information, and disposition of the incident, improves the reliability of the data entered into PowerSchool. Reliable data in the system is essential for effective use of student information, and for reliable reporting to the State. The information specialist entered the discipline incidents reviewed in this audit. Last year was the first time this information specialist has handled this process; previously, information was entered by the assistant principal. The information specialist indicated that she needed additional training is some areas, such as the State reporting codes. The information specialist does not double check her work for accuracy prior to submitting the incident. Recommendation(s): The information specialist should review all procedures for the Disciplinary Referral process and attend all trainings. Individual instruction should be requested from the Student Information System staff, if needed. Disciplinary Referral Forms should be fully completed, including the referral code, name of person making the referral, parent/guardian information, disposition of the incident, signature of the person entering the information, and signature of the person entering the data in order to provide complete and reliable information for State and local reporting. The data included on the Disciplinary Referral Form should be entered in PowerSchool accurately for the discipline incident to provide complete and reliable information for State and local reporting. Review of the information prior to submitting the incident will increase accuracy. Attendance data in PowerSchool should agree with the disposition data entered in PowerSchool as reflected on the Disciplinary Referral Form for the discipline incident. Disciplinary Referral Forms should be signed by the person entering the incident in PowerSchool. Actions Taken or To Be Taken The Information Specialist will review the process carefully and ensure that all coding errors are resolved. If necessary, additional training will be provided to the IS and her back-up. Attention to detail will be given a higher priority when entering discipline referrals. Teachers and IS will be reminded of the importance of reviewing absences to ensure they match suspensions and are coded consistently. State codes for referrals will be reviewed to verify their accuracy with district policy. All discipline referrals will be signed by the IS or back-up in the appropriate place. 21 P age

24 SAVANNAH-CHATHAM COUNTY BOARD OF EDUCATION Internal Audit Department 208 Bull Street, Room 310 Savannah, GA DATE October 22, 2015 Ms. Tawn Foltz, Interim Principal New Hampstead High School 2451 Little Neck Road Bloomingdale, GA Dear Ms. Foltz, Internal Audit has completed a Business Process Review for New Hampstead High School. The purpose of this letter is to document the results of that review and to identify actions that have already been taken or that will be taken in the future. Review Objectives The objectives of the review were to test internal controls for the business processes at New Hampstead High School, and to provide the principal with feedback on changes implemented as a result of the original internal control review to ensure that internal controls are working as expected. Scope of Review To complete the review, Internal Audit tested a sample of transactions covering the following business processes at New Hampstead High School: Purchasing and Accounts Payable, Student Activity Funds, and Student Data. Some transaction testing was performed during July 2015 using data available from the District s mainframe computer systems. This review was completed with site visits to the school on September 11, Internal Audit conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that the audit be planned and performed to obtain sufficient, appropriate evidence to provide a reasonable basis for findings and conclusions based on the audit objectives. Internal Audit believes the evidence obtained provides a reasonable basis for the findings and conclusions based on the audit objectives. 22 P age

25 Background Ms. Foltz was appointed as (interim) principal at New Hampstead High School on July 1, This is her first assignment as a principal. Ms. Foltz has been employed by SCCPSS for 3 years. The business processes at New Hampstead High School were last reviewed on February 20, Those results are not included in this report. New Hampstead High School has two secretaries. One secretary at New Hampstead High School is responsible for the area of Purchasing and Accounts Payable. This secretary has been assigned to the school for three years. She has been employed by SCCPSS for nine years. The other secretary is responsible for the area of Student Activity Funds. This secretary has been assigned to the school for three years. She has been employed by the District for nine and one-half years. The information specialist is responsible for the area of Student Data. The information specialist has been assigned to this school for 3 years. She has been employed by SCCPSS for 21 and one-half years. Results of Review and Opinion The results of this review are listed for each of the business processes on the attachment to this letter. These results show that internal controls need some improvements in the areas of Purchasing and Accounts Payable, Student Activity Funds, and Student Data. Internal Audit also included information that the administration provided regarding the actions the administration has taken or will be taken to strengthen internal controls in each area. These actions should provide the necessary internal control improvements. Internal Audit will schedule additional site visits to determine if progress is made toward strengthening controls in these areas. Internal Audit appreciates the assistance and support provided by the principal and the staff at New Hampstead High School in completing this Business Process Review. Sincerely, Kelly Crosby Senior Director, Internal Audit C: Board of Education Audit Committee Superintendent Chief Financial Officer Chief Academic Officer Chief Data and Accountability Officer Chief of Facilities Management and Support Services Chief of Campus Police Chief Human Resources Officer Chief of Public Affairs and Administrative Officer Executive Directors of School Governance 23 P age