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1 Joint Meeting With The School Board & Audit Committee October 25, 2006 Wednesday, 5:00 – 6:00 p.m.

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Presentation on theme: "1 Joint Meeting With The School Board & Audit Committee October 25, 2006 Wednesday, 5:00 – 6:00 p.m."— Presentation transcript:

1 1 Joint Meeting With The School Board & Audit Committee October 25, 2006 Wednesday, 5:00 – 6:00 p.m.

2 2 ERP Update Information to be provided by Joe Moore & Consultant

3 3 Types of Audits 1. Special Requests 2. Charter School Audits 3. Internal Funds Audits 4. Performance Audits

4 4 Special Requests Average about 12 projects per year Average about 12 projects per year

5 5 Charter School Audits Audit of Joseph Littles-Nguzo Saba Charter School, January 13, 2006 Audit of Joseph Littles-Nguzo Saba Charter School, January 13, 2006 School did Not Perform Criminal Background Screening as Required School did Not Perform Criminal Background Screening as Required School Hired Teachers without Social Security Numbers School Hired Teachers without Social Security Numbers School May Have Violated Federal Tax Law School May Have Violated Federal Tax Law School Hired Non-Certified Instructional Staff School Hired Non-Certified Instructional Staff Violations of Life/Safety/Health Codes Uncorrected Violations of Life/Safety/Health Codes Uncorrected Questionable Uses of Public Funds Questionable Uses of Public Funds Vacancies on the Governing Board Vacancies on the Governing Board Financial Condition Financial Condition Some Assets Not Listed on Schools Fixed Asset Inventory Some Assets Not Listed on Schools Fixed Asset Inventory School Maintained the Required Insurance Coverage School Maintained the Required Insurance Coverage

6 6 Charter School Audits Audit of Survivors Charter School of Boynton Beach, and Survivors Charter School of West Palm Beach, January 13, 2006 Audit of Survivors Charter School of Boynton Beach, and Survivors Charter School of West Palm Beach, January 13, 2006 Governing Board Poorly Discharged its Fiduciary Responsibilities Governing Board Poorly Discharged its Fiduciary Responsibilities Use of Public Resources for Personal Gain Use of Public Resources for Personal Gain $6,257 in Public Monies Pocketed from Boynton Beach Campus $6,257 in Public Monies Pocketed from Boynton Beach Campus Public Monies Deposited into Private Bank Account Public Monies Deposited into Private Bank Account Nepotism (Boynton Beach Campus) Nepotism (Boynton Beach Campus) Inappropriate Uses of Public Monies Inappropriate Uses of Public Monies Poor Internal Controls Poor Internal Controls Employees May Not Have Undergone Required Background Screening Employees May Not Have Undergone Required Background Screening Personnel and Payroll Non-Compliance Personnel and Payroll Non-Compliance Instructional Staff Not Properly Certified Instructional Staff Not Properly Certified Fixed Assets Not Adequately Tagged or Recorded Fixed Assets Not Adequately Tagged or Recorded Schools Not Submitting Required Reports to the District Timely Schools Not Submitting Required Reports to the District Timely Governing Board Meeting Held at Restaurant during Dinner Governing Board Meeting Held at Restaurant during Dinner Boynton Charter is Not a 501(c)3 Organization Boynton Charter is Not a 501(c)3 Organization

7 7 Charter School Audits Audit of Spanish Academy Charter School, February 11, 2005 Audit of Spanish Academy Charter School, February 11, 2005 The School President/Founder Gained $6,000 From Leasing Arrangement The School President/Founder Gained $6,000 From Leasing Arrangement Findings Reported by the Schools Independent Auditor Findings Reported by the Schools Independent Auditor Audit of TerraNova Academy Charter School, November 12, 2004 Audit of TerraNova Academy Charter School, November 12, 2004 Financial Data Incomplete Financial Data Incomplete The School Principal/Founder Profited $35,000 From Leasing Arrangement The School Principal/Founder Profited $35,000 From Leasing Arrangement $7,400 in Petty Cash Questionable $7,400 in Petty Cash Questionable $4,266 in Office Computers Missing $4,266 in Office Computers Missing Questionable Payments Questionable Payments $41,201 in Tax Dollars Could Not Be Accounted for Due to Lack of Records $41,201 in Tax Dollars Could Not Be Accounted for Due to Lack of Records

8 8 Charter School Audits Audit of Everglades Preparatory Academy Charter School, February 14, 2003 Audit of Everglades Preparatory Academy Charter School, February 14, 2003 Composition of the Governing Board Not Complied with the Charter Composition of the Governing Board Not Complied with the Charter Accounting Policies Not Yet Implemented Accounting Policies Not Yet Implemented Former Chairperson of the Governing Board Signing School Checks After Resignation Former Chairperson of the Governing Board Signing School Checks After Resignation School Checks Not Always Signed By Two Authorized Signers School Checks Not Always Signed By Two Authorized Signers Expenditures Incurred By Another Charter School Expenditures Incurred By Another Charter School Transfer of Equipment Not Recorded Transfer of Equipment Not Recorded Overpayment For Monthly Rent Overpayment For Monthly Rent Overpayment for Invoice Overpayment for Invoice Disbursements Not Properly Documented Disbursements Not Properly Documented Unauthorized Travel Allowance Unauthorized Travel Allowance Tax Exemption Status Not Utilized Tax Exemption Status Not Utilized

9 9 Charter School Audits Follow-up on Charter Schools Procedural and Accountability Manual, July 10, 2003 Follow-up on Charter Schools Procedural and Accountability Manual, July 10, 2003 Differences Among Charters Differences Among Charters A standardized Charter School Charter has been developed.A standardized Charter School Charter has been developed. Comprehensive Charter Schools Monitoring Procedure Manual Not Available Comprehensive Charter Schools Monitoring Procedure Manual Not Available A procedures manual has been developed.A procedures manual has been developed. Teacher Certificates Not Verified Teacher Certificates Not Verified No exceptions found.No exceptions found. 34% of Charter Schools Employees Fingerprint Records Not Available 34% of Charter Schools Employees Fingerprint Records Not Available No exceptions found.No exceptions found. Educational Facilities Safety Inspections Not Verified Educational Facilities Safety Inspections Not Verified No exceptions found.No exceptions found. School Buses Operated Without Automobile Liability Insurance School Buses Operated Without Automobile Liability Insurance No exceptions found.No exceptions found. Drivers Operated District School Buses Without Proper Licenses Drivers Operated District School Buses Without Proper Licenses No exceptions found.No exceptions found. Transportation Plans Not Available Transportation Plans Not Available No exceptions found.No exceptions found. Transportation of Students Not Monitored Transportation of Students Not Monitored No exceptions found.No exceptions found.

10 10 Performance Audits Audit of Implementation of Corrective Actions in Response to Auditor Generals 2004 FTE Student FTE Audit, August 11, 2006 Audit of Implementation of Corrective Actions in Response to Auditor Generals 2004 FTE Student FTE Audit, August 11, 2006 ESE Student Records ESE Student Records Records for Vocational On-the-Job Training Off-Campus Time Records for Vocational On-the-Job Training Off-Campus Time Teacher Certification Teacher Certification Detailed Findings For Individual Schools Detailed Findings For Individual Schools Audit of Implementation of Corrective Actions In Response to Auditor Generals FTE Audit for Student Transportation, August 11, 2006 Audit of Implementation of Corrective Actions In Response to Auditor Generals FTE Audit for Student Transportation, August 11, 2006 Insufficient Documentation Insufficient Documentation Detailed Tests of Riders Detailed Tests of Riders Public Transportation Public Transportation

11 11 Performance Audits Audit of Accounts Payable Procedures, March 6, 2006 Audit of Accounts Payable Procedures, March 6, 2006 Lack of Written Procedures Lack of Written Procedures Unsupported Invoices Payments Unsupported Invoices Payments Changes of Vendor Status not Documented Changes of Vendor Status not Documented Update Access to Vendor and Invoice Master Files Not Controlled Update Access to Vendor and Invoice Master Files Not Controlled Audit of Payroll and Personnel, August 12, 2005 Audit of Payroll and Personnel, August 12, 2005 Controls Over Processing and Reporting Payroll Transactions were Adequate Controls Over Processing and Reporting Payroll Transactions were Adequate Controls Over Check Storage, Printing, Transfer, and Distribution Appeared Adequate Controls Over Check Storage, Printing, Transfer, and Distribution Appeared Adequate Payroll Checks Issued to Legitimate District Employees Payroll Checks Issued to Legitimate District Employees Overtime for Some Employees Could not be Reconciled to Supporting Documentation Overtime for Some Employees Could not be Reconciled to Supporting Documentation Premium Overtime Pay Inconsistent with School Board Policy Premium Overtime Pay Inconsistent with School Board Policy

12 12 Performance Audits Audit of Security for Student TERMS and Educational Data Warehouse (EDW), November 11, 2005 Audit of Security for Student TERMS and Educational Data Warehouse (EDW), November 11, 2005 Network Login Controls Need Strengthening Network Login Controls Need Strengthening Mainframe Access Request Form Needs Improvement Mainframe Access Request Form Needs Improvement No Periodic Review of Access Rights to Student TERMS and EDW No Periodic Review of Access Rights to Student TERMS and EDW No Monitoring of Invalid Logins and Access to Sensitive Datasets No Monitoring of Invalid Logins and Access to Sensitive Datasets No User Acceptance Sign-Off Required for Changes to Student TERMS or EDW No User Acceptance Sign-Off Required for Changes to Student TERMS or EDW Changes to Student TERMS Files Affecting EDW Tables are Not Formally Documented Changes to Student TERMS Files Affecting EDW Tables are Not Formally Documented Access Control Not Based on Job Responsibilities at the Schools for Student TERMS Access Control Not Based on Job Responsibilities at the Schools for Student TERMS Too Many Employees with Student TERMS Security Access Too Many Employees with Student TERMS Security Access Ability to Access Student TERMS At All Locations Ability to Access Student TERMS At All Locations No Audit Trail for Student TERMS No Audit Trail for Student TERMS Inadequate Segregation of Duties Inadequate Segregation of Duties EDW Access Levels are Insufficient EDW Access Levels are Insufficient No Firewall Policy Documentation or External Technical Review of Network Security No Firewall Policy Documentation or External Technical Review of Network Security Formal Documentation for EDW Processing Procedures Needs Completion Formal Documentation for EDW Processing Procedures Needs Completion Miami Date County School District has Update Access to our System Miami Date County School District has Update Access to our System

13 13 Performance Audits Audit of Fees Collection at Community Schools, May 13, 2005 Audit of Fees Collection at Community Schools, May 13, 2005 Fees Not Properly Accounted For Fees Not Properly Accounted For Course Fees Not Promptly Deposited Course Fees Not Promptly Deposited Incomplete, Incorrect, or No Student Attendance Rosters Incomplete, Incorrect, or No Student Attendance Rosters Fees Transmittal Forms Not Properly Completed Fees Transmittal Forms Not Properly Completed Inaccurate/No Transmittals Inaccurate/No Transmittals Invoices Overpaid Invoices Overpaid Course Fee Hourly Rates Course Fee Hourly Rates Course Fees Recorded in Wrong Accounts Course Fees Recorded in Wrong Accounts

14 14 Performance Audits Audit of Computer Incidents, May 13, 2005 Audit of Computer Incidents, May 13, 2005 Lack of Written Procedures for Incident Response Lack of Written Procedures for Incident Response Computer Incidents not Logged or Reviewed Computer Incidents not Logged or Reviewed No Intrusion Protection System No Intrusion Protection System Lack of Training for Computer Security Incidents Lack of Training for Computer Security Incidents Audit of Information Technology Disaster Recovery, March 11, 2005 Audit of Information Technology Disaster Recovery, March 11, 2005 School Information Backups Not Sent Off-Site School Information Backups Not Sent Off-Site Fuel Tank in IT Generator Not Full for Hurricane Frances Fuel Tank in IT Generator Not Full for Hurricane Frances Temperature Not Properly Regulated in Off-Site Backup Storage Vault Temperature Not Properly Regulated in Off-Site Backup Storage Vault A 19% Discount for a Hot-Site Contract not Captured A 19% Discount for a Hot-Site Contract not Captured Two CDs Containing Critical Information for Students and Employees Should be Stored in Off-Site Location Two CDs Containing Critical Information for Students and Employees Should be Stored in Off-Site Location Disaster Recovery Documentation Disaster Recovery Documentation Network Servers Not Backed up and Sent Off-Site Weekly Network Servers Not Backed up and Sent Off-Site Weekly

15 15 Performance Audits Audit of Community Use of School Facilities, February 11, 2005 Audit of Community Use of School Facilities, February 11, 2005 Fee Structure to be Re-examined Fee Structure to be Re-examined The Need for Fully Completed, Accurate, and Documented Leases The Need for Fully Completed, Accurate, and Documented Leases Utilities, Insurance and Extra Services Fees Not Transmitted Utilities, Insurance and Extra Services Fees Not Transmitted Audit of Exception Reports, February 11, 2005 Audit of Exception Reports, February 11, 2005 Database Access Exceptions Not Reported to Management for Follow Up Database Access Exceptions Not Reported to Management for Follow Up Exception Report for Unsuccessful Attempts Not Printed or Reviewed Exception Report for Unsuccessful Attempts Not Printed or Reviewed Exception Reports Not Reviewed Exception Reports Not Reviewed Large and Obsolete Exception Reports Could be Stored on Disk, Viewed Online, or Discontinued Large and Obsolete Exception Reports Could be Stored on Disk, Viewed Online, or Discontinued Audit of Major Purchases, February 11, 2005 Audit of Major Purchases, February 11, 2005 Internal Control System in Enforcing Contracted Prices for Major Purchases Appeared Adequate. Internal Control System in Enforcing Contracted Prices for Major Purchases Appeared Adequate.

16 16 Performance Audits Audit of Criminal Background Checks for New Employees, November 12, 2004 Audit of Criminal Background Checks for New Employees, November 12, 2004 Background Checks for Temporary and School Age Child Care Employees Background Checks for Temporary and School Age Child Care Employees Audit of Sales Tax Exemption, November 12, 2004 Audit of Sales Tax Exemption, November 12, 2004 Control Procedures Adequate and District Saved $9,600,00 in Sales Tax Control Procedures Adequate and District Saved $9,600,00 in Sales Tax Some Sales Tax Savings Opportunities Available Some Sales Tax Savings Opportunities Available A direct-Material Purchase Provision should be added to the Design/Bid Build Contract A direct-Material Purchase Provision should be added to the Design/Bid Build Contract Audit of Football Stadium Taxes, October 15, 2004 Audit of Football Stadium Taxes, October 15, 2004 Stadium Taxes Collections Stadium Taxes Collections Stadium Taxes Not Sufficient to Cover Maintenance Costs Stadium Taxes Not Sufficient to Cover Maintenance Costs

17 17 Performance Audits Audit of School Cafeteria Revenue Collection, October 15, 2004 Audit of School Cafeteria Revenue Collection, October 15, 2004 Reconciliation of the Districts Cafeteria Bank Account Not Performed for over Nine Months Reconciliation of the Districts Cafeteria Bank Account Not Performed for over Nine Months No Review of Cash Overage/Shortage for Each School No Review of Cash Overage/Shortage for Each School Negative Balances of $59,107 Negative Balances of $59,107 Audit of Security for Enterprise Data and Programs, July 19, 2004 Audit of Security for Enterprise Data and Programs, July 19, 2004 Obsolete User IDs Not Removed Obsolete User IDs Not Removed Controls for Remote Access Controls for Remote Access Access to Computer Room Access to Computer Room Disaster Recovery Documentation Disaster Recovery Documentation Concerns Also Raised in Other Audits Concerns Also Raised in Other Audits

18 18 Performance Audits Audit of 3D/International Inc. Contract, June 17, 2004 Audit of 3D/International Inc. Contract, June 17, 2004 Did 3DI Meet Performance Goals? Did 3DI Meet Performance Goals? Can In-House Staff Replace 3DI, for Less/More Cost? Can In-House Staff Replace 3DI, for Less/More Cost? Meetings not Held and Performance Bonuses not Invoiced Quarterly as Required Meetings not Held and Performance Bonuses not Invoiced Quarterly as Required Schedule of Payments Revised Without Staff Approval, and Some Invoices Not in Agreement Payment Schedule Schedule of Payments Revised Without Staff Approval, and Some Invoices Not in Agreement Payment Schedule Additional Services Not Authorized in Advance, in Writing, as Required by the Agreement Additional Services Not Authorized in Advance, in Writing, as Required by the Agreement 3DI Maintains the Required Insurance Coverage 3DI Maintains the Required Insurance Coverage

19 19 Internal Funds Audit

20 20 Internal Funds Audit

21 21 Internal Funds Audit School Audit Ranking (2005)

22 22 Internal Funds Audit School Audit Ranking (Formerly A) (Formerly B) (Formerly C) (Formerly D) Total

23 23 Internal Funds Audit

24 24 Internal Funds Audit

25 25 Internal Funds Audit Number of Schools Total # of Findings Findings/School

26 26 Internal Funds Audit Major Findings for 2005 Adult Education Finding: $1.8 million in overspending in salary variance, absorbed by FEFP funds Finding: $1.8 million in overspending in salary variance, absorbed by FEFP funds Corrective Action: Beginning 2006, employees actual salaries are is used instead of district average salary rates Corrective Action: Beginning 2006, employees actual salaries are is used instead of district average salary rates

27 27 Internal Funds Audit Major Findings for 2005 Community School Program Program Deficit in Some Schools # of Schools46 Total Deficits($192,019)($230,579) Range ($10,262) to ($145,737) ($1,963) to ($163,400)

28 28 Internal Funds Audit Major Findings for 2005 Community School Program Student Registration and Attendance Records Not Maintained Student Registration and Attendance Records Not Maintained Improvement Needed for Payroll Processing Improvement Needed for Payroll Processing

29 29 Internal Funds Audit Major Findings for 2005 School Age Child Care Program Program Deficit in Some Schools Program Deficit in Some Schools # of Schools1914 Total Deficits($197,515)($138,687) Range ($352) to ($40,212) ($1,474) to ($24,975)

30 30 Internal Funds Audit Major Findings for 2005 School Age Child Care Program Student Records Not Properly Maintained Student Records Not Properly Maintained Payroll Not Properly Documented Payroll Not Properly Documented

31 31 Internal Funds Audit Major Findings for 2005 Community Use of School Facilities Lease Prequalification Not Available Lease Prequalification Not Available Inadequate Proof of Insurance Inadequate Proof of Insurance Lease Agreement Not Properly Completed Lease Agreement Not Properly Completed Undercharged Rentals and Late Payment Undercharged Rentals and Late Payment

32 32 Internal Funds Audit Major Findings for 2005 Receipts/Revenues Collection Access to Drop Safe Access to Drop Safe Monies Not Deposited Timely Monies Not Deposited Timely Monies Collected Not Adequately Documented Monies Collected Not Adequately Documented Fundraisers Not Adequately Documented Fundraisers Not Adequately Documented

33 33 Internal Funds Audit Major Findings for 2005 Disbursements/Expenses Disbursement Not Properly Approved and Documented Disbursement Not Properly Approved and Documented Monies and School Checks Not Adequately Safeguarded Monies and School Checks Not Adequately Safeguarded

34 34 Internal Funds Audit Major Findings for 2005 Other Findings Bank Reconciliation Not Completed Timely Bank Reconciliation Not Completed Timely Staff Performing Incompatible Duties Staff Performing Incompatible Duties Field Trips Not Properly Approved Field Trips Not Properly Approved Prenumbered Documents Not Adequately Controlled Prenumbered Documents Not Adequately Controlled

35 35 Remedial Actions/New Procedures In Response to Audit Findings Monies Collection Procedures Monies Collected Reports (MCR) Monies Collected Reports (MCR) Sponsors keep the yellow copy as temporary receipt Sponsors keep the yellow copy as temporary receipt Sponsors to indicate the source of funds (i.e. cash or checks) on MCRs Sponsors to indicate the source of funds (i.e. cash or checks) on MCRs Increase frequency of armored car service for picking up and deposit in banks. Increase frequency of armored car service for picking up and deposit in banks.

36 36 Remedial Actions/New Procedures In Response to Audit Findings Monies Collection Procedures (Continued) Bookkeeper shall not open incoming mails Bookkeeper shall not open incoming mails MCRs should be prepared for checks received in the mail and be turned in to the bookkeeper for deposit MCRs should be prepared for checks received in the mail and be turned in to the bookkeeper for deposit Developed a Drop Safe Log for sponsors to record monies deposited in the drop safe Developed a Drop Safe Log for sponsors to record monies deposited in the drop safe

37 37 Remedial Actions/New Procedures In Response to Audit Findings Leasing of School Facilities Central Office to provide additional support and training for school centers Central Office to provide additional support and training for school centers Developed a Leasing Checklist to ensure leases are properly administered Developed a Leasing Checklist to ensure leases are properly administered

38 38 Remedial Actions/New Procedures In Response to Audit Findings School Age Child Care (SACC) Program After Care Programming Department: Performs site visits and compliance reviews Performs site visits and compliance reviews Provides additional support and training for schools Provides additional support and training for schools Reviews SACC program budgets monthly and provide fiscal management training for SACC directors Reviews SACC program budgets monthly and provide fiscal management training for SACC directors

39 39 Remedial Actions/New Procedures In Response to Audit Findings Community School Program Several committees have been formed to address the audit findings Several committees have been formed to address the audit findings Monthly review and monitoring of Community School budgets Monthly review and monitoring of Community School budgets

40 40 Remedial Actions/New Procedures In Response to Audit Findings Others New procedures needed for unauthorized discard of records, to be developed by Accounting & Personnel Departments New procedures needed for unauthorized discard of records, to be developed by Accounting & Personnel Departments

41 41 Audit Approach and Current Focus Same audit scope and objectives but focus may vary depending on the nature of findings from ongoing audits Same audit scope and objectives but focus may vary depending on the nature of findings from ongoing audits We will perform surprise checks of cash on hand and verification of deposit bags We will perform surprise checks of cash on hand and verification of deposit bags We sample the disbursements from Administrative Courtesy Account to determine the appropriateness We sample the disbursements from Administrative Courtesy Account to determine the appropriateness

42 42 Audit Approach and Current Focus (Continued) Request a joint management response from current and former Principals for schools with change in administration Request a joint management response from current and former Principals for schools with change in administration Focus on those with material weaknesses Focus on those with material weaknesses Immaterial findings are communicated through verbal discussion Immaterial findings are communicated through verbal discussion

43 43 Projects for Audit Plan


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