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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Elwood Union Free School District –Electronic Transfers (2014M-133)


Released: July 11, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to evaluate the District’s controls over electronic transfers for the period July 1, 2012 through August 31, 2013.

Background

The Elwood Union Free School District is located in the Town of Huntington, Suffolk County, and is governed by a Board of Education comprising five elected members. The District operates four schools with approximately 2,625 students and 375 employees. The District’s expenditures for the 2012-13 fiscal year were $53,282,835.

Key Findings

  • The Board does not have written policies, procedures or Board resolutions to govern electronic transfers. As a result, the Treasurer and a payroll clerk processed electronic transfers without adequate segregation of duties or documentation of transactions.
  • We found no evidence that two people from the District were involved in the processing of any of the electronic transactions.
  • The District did not have a written confirmation for 47 of 98 transfers processed, totaling $12.8 million, from two of the four banks that processed electronic transfers.

Key Recommendations

  • Establish comprehensive written policies and procedures for electronic transfers, which should authorize individuals to perform electronic transfers and require District officials and employees to retain supporting documentation for each transaction.
  • Segregate duties to ensure that no one person can both initiate and approve electronic transfers. If one person initiates the transaction, another authorized person should review and approve it.
  • Ensure that written confirmations are provided by the bank from which District funds are transferred, no later than the next business day.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236