A review of the School Department’s business office shows an overall lack of communication and cooperation between those collecting money and those accounting for it, according to a report made public Monday.
It also shows the department has few checks and balances, no standardized system for turning checks into the business department and no clear system in place to keep track of incoming checks or process them and pay bills in a timely manner, according to the report.
The report, completed by the public accounting firm of Powers & Sullivan at the request of the Audit Committee, found “several observations and comments indicating insufficient internal control practices and policies,” according to a letter sent to the School Committee from Audit Committee Chairman Rusty Kellogg.
“A reading of the review shows a limited number of controls in the system,” Kellogg said, adding that he and members of the Audit Committee “are trying to let the report to speak for itself.”
The Audit Committee has requested that the School Committee address the points made by the review and have corrections in place to better track revenue within two months.
The review was done after revelations last winter that more than . It does not, however, include a review of the food services department because a new, privatized payment plan is in place that will presumably correct errors in the system that allowed the deficit to go undetected, according to Kellogg.
Included in the review are accounting practices within the School Department dealing with the Athletic and Performing Arts Departments, school gifts and child lab program.
In each case it is clear that there is no consistent system of how checks are accounted for, and no system in place in which department heads have access to information or are required to reconcile their receipts at the end of each quarter or fiscal year.
For example, athletic fee checks for $230 at the high school and $125 at the are collected by team coaches and turned over to the business office at the start of each season.
But according to the report, the athletic director receives no regular reporting back from the business office about what checks have been processed through.
“The last report was provided on February 12, 2009 according to the AD’s records. Therefore, the activities are not being reconciled with the Business Office,” the report states.
In addition, the report states that Athletic Director John Brown has received complaints about the delay in payment of game officials.
The process calls for Brown to summarize the fees at the end of each month and submit them for processing, according to the report.
“In some cases the Officials are not paid for 7-8 weeks after a game,” the report states.
In the Performing Arts Department, the report found similar lack of oversight.
For the most part money is collected by teachers, summarized and sent to the business office.
But, “we noted very little control over these procedures,” the report stated.
“There doesn’t seem to be any way for anyone other than the Teacher/Instructor to verify who participated or paid for these activities,” it stated.
In addition, the details of what money is actually being turned over the business office is not always clear or in a consistent format.
The picture appears even murkier at the Child Lab Program at the high school where tuition is $5,000 per year for preschool students.
According to the report, a teacher is responsible for collecting the tuition checks and turning them in to the business office.
“We observed these turnovers which simply consist of a note from the teacher asking the Business Offfice to ‘deposit these checks’; no detail was provided with the checks,” the report stated.
The report goes on to state that the total amount collected at the child lab could not be documented.
“One would expect 18 (students) x $5,000 or approximately $90,000 of revenue and the March report showed only $48,130. We inquired about a listing of the 18 available spots but it seemed like there wasn’t any type of control sheet being maintained,” the report states.
It indicated that School Business Manager Ruth Quinn Berdell has subsequently informed accountants that as of July, $88,000 has been collected, but there was no information on how that information was collected.