Published: January 13, 2009 12:38 am      

NT SCHOOLS: District counters audit concerns

North Tonawanda school officials have prepared a plan to address concerns raised in two separate evaluations of the district’s information security and records keeping for the 2007-’08 fiscal year.

The “Corrective Action Plan” is in response to the usual round of public and private audits conducted each year. Board Member Mike Carney pointed out that no particularly major issues needed to be corrected, but that the district is always looking for ways to defend itself against malfeasance and errors in its bottom line.

Both audits, presented to administrators beginning in September — one “internal” by the New York State Comptroller and the other an “external,” conducted by the district’s accountants Drescher & Malecki — address a number of issues in four separate areas: food service, computer security, internal controls and extracurricular clubs.

Some of the steps administrators will take to correct the issues have already been enacted, with others set to take place throughout the current school year.

• The state in a report issued early in September found about $15,000 in discrepancies with the district’s food service vendor, resulting in $1,450 in overpayment during a five-month period.

The total discrepancy was later reduced by district officials to the comptroller’s satisfaction, but the overpayment to the vendor was agreed upon. The issue was addressed beginning in September 2007, when the numbers were reviewed. With the start of this school year, Carney said a new food service provider was hired after a settlement was reached with two former companies on the overpayment issue, compensating the district for a couple thousand dollars.

Along with the new vendor, corrective action initiated in September requires the new vendor to provide monthly lists including names and dollar amounts for all student meals prepaid or charged.

“What we were taking in and recording weren’t actually the same,” Carney said.

• Both reports cited a lack of consistency in password protection on some district computers containing sensitive data, downloading programs without official authorization and a need to upgrade anti-virus software on some district machines.

• The external audit recommended removing from active status 10 inactive High School clubs and organizations. At least one club was cited for writing checks payable to student members following fundraisers to subsidize their participation in an annual trip. Corrective action has been taken so that clubs will maintain records concerning each student’s fundraising contribution and offset the individual cost of the trip accordingly, rather than dispersing the money to students.

• Three recommendations from Drescher & Malecki concerning “internal controls” also spurred corrective action. “You want to eliminate the chance of a problem being able to creep into the picture,” Carney said, summing up the term. “You’re finding things that, if somebody wanted to, they could (abuse).”

The district accountant will now be required to provide officials with monthly accounts of data entered into a financial journal to Assistant Superintendent of Administrative Services Susan Villiers for review. The external audit determined journal entries, if inaccurate, could skew numbers in “all aspects of the district’s financial position.”

“This control process will begin upon the hiring of a new school accountant, estimated to take place between January and March 2009,” the plan states.

Also, as an internal control, the payroll clerk will be denied the ability to make changes to the payroll master file, to “reduce the risk of error or fraud to the district.”

Lastly, the district will hire an appraisal company to conduct a full inventory of the districts “assets,” in other words, all of the physical objects throughout the schools including computers, physical education equipment, etc.

The last such audit was conducted in 2002, the corrective plan states. However, “annual updates have been processed since that time and will continue until a full capital asset inventory is completed.”

Carney brought up an example to illustrate the importance of an asset inventory. It involved equipment at Ohio Elementary School, used by children for physical education, but thought to be broken for some time.

“One of the gym teachers felt, because it wasn’t being used, we’re going to throw it out,” he said. “They ended up cleaning it up and it worked fine. That’s the stuff you need to see people doing. This (woman) took the time to clean something up and save the district some money.”

Contact reporter Neale Gulley at 693-1000, ext. 114.