Purpose of Audit

The purpose of our audit was to determine whether the District had established effective internal controls over departmental cash receipts and information technology for the period July 1, 2011, through May 31, 2013.

Background

The Ausable Valley Central School District is located in Clinton, Essex and Franklin Counties. The District is governed by the Board of Education which comprises seven elected members. The District’s budgeted expenditures for the 2012-13 fiscal year were $28.3 million.

Key Findings

• The Board had not adopted comprehensive written policies and procedures providing guidance and internal controls over departmental cash receipts. Open swim program cash receipts were not properly accounted for, were substituted by the open swim program coordinator with personal checks and were not all remitted to the Business Office for deposit.
• System users were granted access to functions of the financial software applications that they did not need to fulfill their day-to-day job responsibilities.
• Although the District’s technology controls policy designates the Superintendent with the responsibility of assigning access rights (administrative rights) to the financial application, we found that the School Business Executive has been granted administrative rights to the financial application.
• Audit logs were not generated and reviewed by someone independent of the Business Office’s operations.

Key Recommendations

• Establish a comprehensive departmental cash receipts policy. Prohibit employees from substituting District cash receipts with personal checks.
• Evaluate employee job descriptions and assign user access rights to match the respective job functions.
• Ensure that the Superintendent is the only individual who assigns user access rights to employees for the District’s financial applications, as directed by the District’s technology controls policy.