JOHNSTOWN - A state Comptroller's Office audit of the Greater Johnstown School District's extra-classroom activities for two school years found inadequate documentation of expenditures and a policy that hasn't been updated for 10 years.
Comptroller Thomas P. DiNapoli's Division of Local Government & School Accountability conducted an audit of the district's "internal controls" over extra-classroom activities from July 2008 to June 2010. Findings were sent to the district June 2.
DiNapoli's office reviewed 50 cash disbursements totaling $39,425 to determine whether they were appropriate expenditures. Four totaling $3,669 didn't have adequate documentation to provide evidence they were appropriate, the audit said.
Two of the four disbursements, totaling $2,750, were to one faculty advisor, the audit found. One, for $2,100, was a reimbursement to the faculty adviser but didn't include documentation of the expense. Another payment for $650 was provided to the faculty adviser as an advance, but it did not have adequate documentation to describe his use of the funds or any documentation that it was repaid.
The audit does not name the adviser or indicate which activities he or she supervised.
As a result of those "questionable payments," the state Comptroller's Office said it examined 10 additional payments totaling $6,543 made to the adviser in question.
"We found that all 10 payments contained similar documentation weaknesses that were apparent with the first two payments," the audit said. "Because of the lack of adequate documentation, we could not determine whether any of the 10 payments were appropriate."
District Clerk Larraina Carpenter said Monday that the Board of Education may discuss the audit at its next meeting Aug. 16.
"Coming from the accounting field, I'm concerned about it," board President Paul VanDenburgh said today. "There just needs to be tighter controls on funds."
The audit said funds raised by school district's 53 extracurricular activity clubs were put into three accounts - the high school club account, middle school club account, and athletic club account. The activity fund recorded nearly $900,000 in receipts and disbursements during the scope of the audit.
The audit takes the district Board of Education to task for not following through with certain action regarding documentation of extra-classroom activities.
"Although the board established a policy for the activity fund, the policy is not adequate because it does not provide specific guidance for the financial management and recordkeeping of the activity fund, and it has not been updated since 2001," the audit said.
"The district developed an extracurricular handbook to supplement the board policy, however, the handbook has not been formally adopted by the board," the audit adds. "Furthermore, while the handbook is more comprehensive than the district policy, it still does not establish adequate internal controls over extracurricular activity monies."
The comptroller made these six main recommendations to the school district:
The board should update and amend its extra-classroom activity fund policy to provide "specific guidance" for financial management and recordkeeping of the activity fund.
Board and district officials should ensure faculty and student advisors have "adequate documentation" for expenditures.
Accounts are to be maintained in accordance with district policy and state regulations.
Receipts and disbursements should be documented by the central and student treasurers.
The district's 2009-10 handbook should provide more "detailed guidance."
Superintendent Katherine Sullivan said Thursday the audit was welcome, and came after the district asked its regular internal auditors to look at extracurricular funds - "a large amount of money."
"We're putting more and more controls in place," she said.
Sullivan sent a June 23 letter to state Comptroller's Office Chief Examiner Jeffrey P. Leonard in Glens Falls indicating the district already had its extra-classroom funds reviewed by internal auditors. The letter also indicated the district is updating its extracurricular-fund policy, and is "in the process of establishing controls to ensure that all expenditures have adequate documentation."
The letter also noted the district is training advisers and treasurers.
Sullivan wrote that central treasurers will provide the board with quarterly account reports, stating Sept. 30. The district's 2009-10 handbook is also being updated; and will address "separation of duties."
In the audit, the examiner wrote: "The same individual should not collect and record cash receipts, make bank deposits, prepare and post journal entries, sign checks, and perform or supervise the reconciliation of extra-curricular accounts."
Michael Anich covers Johnstown and Fulton County news. He can be reached at firstname.lastname@example.org