(UPDATE) Audit probes bookkeeping at Decatur High
This story has been updated.
The most recent audit of City Schools of Decatur includes several observations about bookkeeping at Decatur High, noting that the principal hadn’t signed off on some payments made with school funds.
CSD Finance Director Susan Hurst told Decaturish that the audit of the high school was initiated at the school system’s request.
“There were concerns and with the change in principal what we decided to do is have them come in,” Hurst said. “We tried to do this last year because we had concerns as well.”
CSD Board of Education members will review the audit at tonight’s regular meeting, which begins at 6:30 pm. The audit studied the finances for Fiscal Year 2014, which ended on June 30. Auditors from Mauldin & Jenkins studied 25 purchases made on behalf of Decatur High.
“Of the 25 items sampled and tested, none of the disbursements included documented approval by the principal prior to the disbursement of the funds,” the auditor wrote. “We recommend all disbursements are properly documented as approved prior to disbursement of funds.”
The principal during the time of the audit was Lauri McKain. McKain was promoted to Director of Secondary Education and finished out the 2014 school year, but left in December to take a job with the Atlanta-based Southern Regional Education Board. Noel Maloof is the school’s current principal.
McKain told Decaturish she is glad that she also has pushed for an audit of the school’s finances while she was principal.
“I’m pleased they finally contracted to have an audit at DHS,” McKain said. “I discussed this many times during my eight years as principal with the superintendent and finance directors. The flow of money from athletics, class dues, fund raising and field trips employs a full time book keeper who, quite frankly, is doing the books the way the previous bookkeeper did, (who did it the same as the previous one, etc.) without any procedural manual to guide the work. Getting feedback to improve processes is something that needs to become regular operating procedure at DHS and all the schools. When I reviewed the auditors report, I was pleased to see recommendations that are actionable and will strengthen the financial stewardship of funds at DHS.”
The audit uncovered additional concerns about purchasing at the school.
– Three of the payments “were paid significantly after the expenditure was incurred.”
– “For all 25 deposit slips sampled and tested, we attempted to trace to the cash collections posted to the register; however, there is no notation of cash or check. Since no notation exists, we could not trace to deposit slip.”
– “For all 25 deposit slips sampled and tested, we reviewed and noted signature of the money collector; however, no signature of second cash counter. We recommend a second person should count and verify cash as well as sign forms thus documenting second count.”
Hurst said CSD asked the auditor to take a look at the high school during its routine audit of the school system’s finances.
“We felt like there weren’t controls in place, but we didn’t really know what and we also don’t have the manpower, like a big school district, to do that for us,” Hurst said.
Auditors also uncovered a “significant deficiency” requiring a $125,000 correction to increase the school system’s capital assets.
The $125,000 correction, known as an adjustment, occurred because, “The District did not review or consider expenditures in all the repairs and maintenance and capital outlay accounts.” These were not counted as capital assets.
“By not reviewing all the repairs and maintenance and capital outlay accounts, the District understated the capital assets as of June 30, 2014,” the auditors wrote. “In the governmental activities, an adjustment of $125,080 was required to increase capital assets and decrease expenses.”
The auditors recommended that CSD pay closer attention to the repairs and maintenance accounts to prevent a similar error.
Another recommendation was that the school system adopt a purchasing manual for all of its schools and a conflict of interest policy.
“During the review of the accounts payable internal control memo, we noted that a current purchasing manual does not currently exist,”the auditors wrote. The manual should define restrictions on purchases of goods or services from governing body members, employees, or other suppliers that would create a conflict of interest.”
Auditors found that CSD doesn’t require employees with the ability to hire and recommend hires to sign a conflict of interest statement.
Read more: The audit agenda that will be presented to the Board of Education.