Report No. 2010-36
March 2010
Complete Audit Report
The following findings were included in our audit report on the Santa Fe R-X School District.
The district spent more than it received during the fiscal year ended June 30, 2009, resulting in a decline of the district's ending fund balance in the Combined Operating Funds (General Fund and Special Revenue Fund). As a result, the district is in the Department of Education and Secondary Education (DESE) "financially stressed" classification. This significant decrease in the district's combined operating fund balance appears to be primarily caused by overspending of the original budget. The original budget was overspent by over $200,000 during the year ended June 30, 2009, but some of this overspending was caused by unanticipated costs that arose during the year. Some temporary spending freezes were put in place in December 2008, but no significant budget cuts were proposed by the former Superintendent to keep the district within budget. We also identified weaknesses in the school district's budgeting process and in the procedures used for monitoring the budget and preparing amendments.
Bank reconciliations of the various accounts held by the district are not properly performed. The school district does not ensure all transactions are properly entered into the financial accounting system and properly cleared during the reconciliation process. Prior to May 31, 2009, documentation of operating account reconciliations were not retained. Accounting duties are not segregated, adequate oversight procedures are not performed by an independent person, and receipting procedures need improvement. Prenumbered receipt slips are not issued, nor is a cash control ledger maintained, by all personnel collecting monies. The method of payment is not recorded and reconciled to the composition of deposits. Some funds collected are not deposited timely and checks and money orders received are not restrictively endorsed until deposited. Adequate procedures have not been established to handle gate and concession receipts collected at athletic events, which totaled over $68,000 during the 2 years ended June 30, 2009, most of which is collected in cash. Petty cash records for the high school petty cash fund have not been maintained adequately.
Supporting documentation related to some school district disbursements was either unavailable or was insufficiently detailed, including a significant number of credit card transactions. Adequate records were not maintained to support the distribution of gift cards totaling $7,000 to students with perfect attendance at summer school in 2007. In addition, the district's current bidding procedures could be made more effective by adopting a more comprehensive policy. Examples of purchases for which the district did not follow a bid process, or did not retain adequate bid documentation, include relocation of a gas pipe ($11,550) and fuel ($33,000).
The district has not bid transportation services in recent years and has not adequately monitored contract terms with transportation contractors. The district expended approximately $300,000 during the 2 years ended June 30, 2009, for district transportation and has contracted with the same three bus providers for many years. Contracts with bus providers are not monitored closely for compliance and bus providers are not always treated equitably even though contract terms are the same. Fuel purchase provisions contained in the contracts with transportation providers need to be reviewed for reasonableness, and it is unclear how the fuel provision amount was calculated. One contractor was not required to reimburse the school in accordance with contract terms for fuel/parts costs incurred. In addition, this contractor's payment amounts were changed during the term of his contract, while approval for this decision was not documented.
The audit report also includes concerns related to payroll controls and procedures, and meeting minutes.
Complete Audit Report
Missouri State Auditor's Office
moaudit@auditor.mo.gov
