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School board shares results of special audit

Audit addresses Trojan Center construction, internal controls
Article Date: 
14 August, 2014 - 14:01

The Morgan County School District is sharing results of a special Utah State Office of Education audit spurred by anonymous complaints regarding how construction of the Trojan Century Center was funded.
“Callers were telling the state office of education they felt there was some misappropriation of dollars in the creation of the Trojan center,” Superintendent Doug Jacobs said.  
The state office informed the school district of the complaints, and the district in turn asked the office to perform an audit to investigate the claims.  The USOE conducted their audit of internal controls in early 2013 at both the district offices and Morgan High School, Jacobs said.
The USOE offered a list of recommendations, none of which considered the district out of compliance or breaking laws, District Business Manager D’Lynn Poll said.  “They are changes we can make to help us be better with our internal controls,” she said.
In a letter from Natalie Grange, USOE internal auditor, to Jacobs dated Aug. 8, the complaints “focused on funds donated by Operation Graduation” to the tune of $17,000.
“It does appear that these donations were approved by relevant individuals charged with governance over the Operation Graduation funds and were expended for legitimate expenditures of the center,” according to the letter.  “However, it seems that confusion existed about who needed to be involved in these decisions and the proper documentation needed for committee decisions made (including participants in the conversation, questions discussed, and ultimately the decisions made.”
The letter provided direction.
“We recommend that the district establish clear policies and procedures to address the function of groups and committees (such as Operation Graduation) that have leadership from parents and others in the community, but are subject to the financial controls of the school and district.  These policies should include requirements for documentation of committee meetings and decisions and should establish a process for donating and/or expending funds,” according to the letter.  “The district does not have specific policies regarding the function of groups and committees such as Operation Graduation that have leadership from parents, but whose money is accounted for by the school.”
Poll shared other recommendations during Tuesday’s board meeting.
The USOE recommended that the district place policies on their website, especially those that relate to purchasing and internal controls.
The USOE “absolutely did not like the fact” that a signature stamp was being used on checks at the high school, Poll said.  There will now be a vigilant effort to have the principal physically sign each check, she said.  The check stock will also now be secure behind lock and key at the high school, following recommendations to that effect.
In response to another recommendation, coaches and advisors of extracurricular high school activities will now use a form to track student fundraising and any other money students pay to the office.  The payments will be receipted, deposited and added to that particular program, Poll said.  It will not be done on a per-student basis, but rather things will be tracked by program, which can be pulled manually upon request.  
“One of the big concerns is a parent being able to walk into the main office of the high school and ask, ‘How much money does my student owe?  It is difficult to do that.  We have hundreds of students and several of them are involved in more than one thing,” Poll said.  “The coaches and advisors can list every student involved in that fundraiser, but it is not something that can be put into the fiscal system.”
Poll said she called four 3A high schools to ask how they handle that issue.  
“They said there is no way we can do that.  That is not feasible for a parent to expect that,” Poll said.  “They need to go to the coach or advisor responsible for that.”
However, Ben Lomond High School is able to do that because “they have a sophisticated financial system that is six times more expensive than ours,” Poll said.  “They do have the capability of tracking every student, but make it mandatory that every coach or advisor give the information to the financial office.”
In Morgan that may be difficult because not all coaches and advisors are official employees of the district, Poll said.  “It is difficult to police them and require them to do that.”
Another recommendation is for the financial committee or board chairman to review charges made on the district credit card, making sure to collect receipts.  Poll said she makes between eight and 10 purchases a year on the card, while the superintendent makes between three and four each year.
“We do not do a lot of things on the credit card,” she said.
Another suggestion was that the business manager take a more active role in overseeing internal controls at the four district schools.
“We will make more official visits, document it, and keep track of the visits,” Poll said.
School and district IT professionals will also be setting up the computer system so not every high school secretary is allowed to see the same information.  Instead, each secretary will have computer access only to the items included in his or her job description.  This accessing provisioning was called for in the state office’s recommendations as well.
 “We are responding to some of the complaints coming in,” Jacobs said.  “We are taking the steps we need.”