Menands Union Free School District
19 Wards Lane, Menands, NY 12204-2197
(518)-465-4561 * Fax (518)-465-4572
www.menandsschool.nycap.rr.com
November 21, 2007
Chief Examiner
Office of the State Comptroller
22 Computer Drive West
Albany, New York 12205
The administration and the Board of Education of the Menands Union Free School District are committed to the fiscal stability and financial health of the school district. This letter is in response to the Comptroller’s Office audit covering the period from July 1, 2005 through
May 1, 2007. Since this audit was conducted, the district has made personnel changes and has undertaken a review of business policies and procedures.
The following responses to the audit recommendations outline the steps that have been taken or will be taken to address concerns. The district’s responses are italicized.
District officials should ensure that all moneys are deposited intact and in a timely manner.
Addressed – Effective September 2007, the district established procedures that insure that all moneys are collected, verified, and deposited intact and on a daily basis. The procedures also insure that these duties are performed by separate individuals.
The Board should establish policies and procedures regarding the operations of the extra-curricular classroom activity funds.
In Process - The Board of Education, the Audit Committee, and the district administration will be working to establish policies and procedures regarding the operations of the extra-classroom activity funds.
District management should segregate cash receipt and disbursement, recordkeeping, and reconciliation duties to the extent that it is practical. Where incompatible duties cannot be appropriately segregated, District officials should establish effective supervisory review procedures and other compensating controls to mitigate specific risks.
Addressed – Effective October 2007, the district has segregated duties related to cash receipts, disbursements, recordkeeping, and reconciliation to the extent practical for a small school district with a small business office staff. The cafeteria cashier and extra-curricular activity sponsors complete an accounting form to record all cash and checks that are collected. The business office assistant receives the cash and checks, verifies the accounting forms, and prepares the deposit slips. The treasurer/assistant superintendent makes the bank deposits on a daily basis. Management Advisory Group records the receipts. The purchasing agent/superintendent approves all purchase orders and claim forms. Steps are taken to ensure proof of services or receipt of products. An internal claims auditor has been appointed by the Board and, as of October 2007, ensures that all appropriate steps are taken in the payment process.
The Board should require the Treasurer to submit all cash reports on a monthly basis and to submit budget status reports and extra-classroom activity fund reports on a quarterly basis.
Addressed - As of November 2007, the treasurer’s report, the appropriation status report, the revenue status report, and the transfer report are submitted to the Board of Education on a monthly basis.
The District clerk should maintain a supplemental file for the Treasurer’s reports.
Addressed - As of April 1, 2007, the District clerk has established a file of signed copies of Treasurer’s reports.
The Board should either audit the District’s claims or officially appoint an independent claims auditor to do so. If the Board opts to appoint a claims auditor, it should ensure that the appointment complies with SED regulations concerning the separation of duties of claims audit from the accounting functions in the Business Office. It should also ensure that the claims auditor reports directly to the Board.
Addressed – As of July 2007, the Board appointed an independent claims auditor to ensure that all claims are in compliance with SED and OSC regulations. The independent claims auditor began working in the district October 2007.
The Board should clarify its procurement policy to stipulate the number of written or verbal quotes required. Also, District officials should monitor and enforce compliance with the District’s procurement policies and regulations relating to price comparison and verbal written quotes.
In Process – Beginning in October 2007, the district administration has taken steps to enforce current Board policies related to procurement. The Board will be reviewing these policies to ensure compliance with SED/OSC regulations.
District officials should ensure that signed receiving documentation is attached to payment packets, applicable payments are included on a certified warrant, and that purchase orders are used when required.
Addressed – As of September 2007, the district administration is enforcing policies for the use of purchase orders. The independent claims auditor is reviewing all documentation to ensure that appropriate procedures are followed for processing claims.
The Board should ensure that all employees are covered by employment contracts or that it approves a salary schedule each year.
In Process - For employees not covered by contracts or collective bargaining agreements, the Board will officially approve the salary and benefits paid to each individual by February 2008. In future years, this will occur on an annual basis at the start of the fiscal year.
The Board should formally approve clearly defined policies for employee leave, health, and dental benefits for all employees who are not covered by a collective bargaining agreement or contract.
In Process - For employees not covered by contracts or collective bargaining agreements, the Board will officially approve the salary and benefits paid to each individual by February 2008. In future years, this will occur on an annual basis at the start of the fiscal year.
The Board should periodically monitor employee leave, health, and dental benefits to ensure that they are consistent with applicable Board policies, employment contracts, and/or collective bargaining agreements.
In Process - As stated in the response to #9 and #10, the Board will annually approve the salary and benefits paid to each employee. The administration will regularly review that leave, health and dental benefits are consistent with contractual agreements, collective bargaining agreements, and Board-approved lists for non-contractual employees.
The Board should review all payments made, or benefits provided, to employees who are not covered by collective bargaining agreements. The Board should seek to recover any payments or benefits that it did not intend to provide to these employees.
In Process - The Board and the Audit committee will be discussing and considering this recommendation in meetings throughout November 2007, December 2007, January 2008, and February 2008.
The Board should develop and adopt comprehensive IT policies and procedures relating to all aspects relevant to the District’s IT operations, including access, equipment storage, data backups, and disaster recovery. District officials also should test the system periodically to verify that data backups can be used if necessary.
In Process – Beginning in December 2007, the administration and the District technology Committee will be reviewing current practices in regards to IT policies and procedures. Subsequent to this review, the Board will approve policies and procedures related to the aforementioned areas of concern.
The Board should terminate the internal audit relationship with the BOCES and replace this position with an internal auditor who meets the independence requirements in Education Law and in the guidance provided by the State Education Department.
Not Applicable - Given that Menands Union Free School District is a district of less than 300 students, the district is not required to have an internal auditor. Notwithstanding, the district made a good faith effort to improve the district’s fiscal stability by contracting with an internal auditor through an Inter-Municipal Agreement and Capital Region BOCES. The district will continue its participation in the Inter-Municipal Agreement in 2007-2008. The Board will reconsider this agreement for 2008-2009 pending resolution of the independence requirements by SED, OSC, and Capital Region BOCES.
Thank you for your assistance with our efforts to improve upon the fiscal stability and financial stability of the Menands Union Free School District.
Sincerely,
Ms. Kathy Meany
Superintendent
Mr. Harry Dunsker
President
Board of Education
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