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Internal audit finds paperwork gaps; board approves corrective-action responses
Summary
An internal audit reviewed accounts payable and grants and found two non-cash procedural exceptions; the district presented corrective steps and the board approved submitting the responses to the state by April 30.
The Niagara Falls City School District’s internal auditor reviewed accounts payable and grant processes and reported two findings that district staff characterized as procedural paperwork gaps rather than misappropriation of funds.
Superintendent Mark Laurrie told the board the district’s internal auditor (Bonadio) had examined accounts payable procedures and grants over a six-week engagement and that "none of the findings or observations dealt with $1 or 1 nickel." He said the findings were paperwork issues that would be remedied to strengthen controls in case of a state audit.
Becky, a district finance staff member, described the accounts-payable finding: the claims auditor reviews each expenditure packet and normally initials packages and signs a warrant; in three instances the initials were missing on the paper check packet even though the claims auditor had reviewed and approved the transactions in other records. Becky said the omissions occurred amid routine processing (one packet had five invoices; four were initialed and one was not) and that the district will add an additional electronic initial/check in the Envision financial system to provide a redundant verification step.
Julie, a district finance staff member, described the grants finding: auditors compared budget, spending and final cost reports and found one small discrepancy in an amount listed on a final cost report versus the amount recorded in the financial system. Julie characterized the error as a typographical discrepancy in a file containing over 1,000 transactions for the grant; the overall totals reported for the grant were accurate. The district will add a reconciliation step to verify check runs against the financial software each time a check run is logged and again before final cost report submission.
Audit committee materials presented to the board said the committee reviewed 1,408 packets (November–February) totaling $31,966,937 and identified two exceptions in the sample: one for $600 (a framed jersey purchased quickly to honor a retired basketball player and lacking a PO number) and one for $100 in the Head Start program related to duplicate clearance submissions for new hires. The superintendent said the district’s goal is zero exceptions and that the corrective-action plan (CAP) approved by the board will be submitted to the state by April 30 after Bonadio removes the draft watermark.
The board approved the CAP as agenda item 6.12 and instructed staff to finalize and file the district’s responses with the state by the stated deadline.
