Transcript Document 7235189

Internal Controls in Schools
Training for ROC and School-based Staff
Presented By:
OFFICE OF AUDITOR GENERAL
New York City Department of Education
1
Mission
To help the Department of Education meet its
educational goals, the mission of the Office of Auditor
General (OAG) is to identify the most critical functions
performed by the Department, to analyze the risks to
the effective performance of those functions, and to
promote the alignment of resources to address those
risks. This mission embraces a wide array of
responsibilities, including not only the traditional
internal audit function of overseeing regulatory
compliance and promoting fiscal integrity and revenue
preservation, but also the broader role of assessing the
effectiveness and efficiency of the organization in
achieving its critical goals.
2
INTERNAL CONTROL OFFICERS
Arnold Ali – Director of Internal Controls
• Danny Nunez
- ROC C*
ROC D*
ROC F*
(Regions 3 & 75)
(Regions 4 & 5)
(Regions 6 & 7)
• Monique Scales – ROC A*** (Regions 9 & 10)
ROC B* (Regions 1 & 2)
ROC E*** (Regions 8, 79)
*1 Fordham Plaza Bronx & Queens Plaza North
**30-48 Linden Place Queens & 715 Ocean Terrace Staten Island
***333 7th Ave Manhattan & 131 Livingston Brooklyn
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Purpose of
Internal Controls
•
•
•
•
Safeguard assets
Check accuracy & reliability of data
Promote operational efficiency
Encourage adherence to prescribed
policies and procedures
4
Separation of Duties
No one person should…
• Initiate transaction
• Approve transaction
• Record transaction
• Reconcile balances
• Handle Assets
• Review reports
5
INTERNAL CONTROL AREAS
•
•
•
•
•
•
•
•
Timekeeping & Per Session
Per Diem & Class Coverage
General School Funds
Inventory
Fire Drills & Safety
Purchasing
Procurement Card (P-Card)
MetroCard
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Timekeeping &
Per Session
7
Timekeeping
• Policies should be in writing, maintained and kept
on file (sample of timekeeping policy)
• Leave balances should be updated when a school
employee is absent or late
• Absence and lateness/early departure should be
monitored
• Original time records for itinerant employees
must be forwarded to the payroll location, and
must be maintained at the school/site where the
services are performed (copies at the service
site)
NOTE
Schools should maintain a complete employee listing (school
organization sheet) and should correspond to the Galaxy
Table of Organization (TO), except for new employees in
process onto funded vacancies in the TO. This listing should
be updated and include all personnel working at the school.
8
Timekeeping Resources
• Chancellor’s Regulations C-601
http://docs.nycenet.edu/docushare/dsweb
/Get/Document-73/C-601.pdf
Attendance and Service of School Staff
9
Timekeeping
Common Findings
• No written timekeeping policies
• Absences/lateness are not posted in
Employee Information System (EIS)
• Poor recordkeeping e.g. absences are
not indicated on time cards
• Employee listing is not maintained or
updated
10
Per Session Activities
• Advertisement – at least 20 days prior to
start date, and must include posting date,
start/end dates of assignment, no. of
hours to be worked, work description
• Application (OP175) & Waiver (OP175W)
•
http://schools.nyc.gov/NR/rdonlyres/6B5A8D03-E84A-47CF-A2945AD4D1AD7809/0/OP1750607FormOP175WFebruary2006.pdf
- over 400 hours
- multiple activities (more than 25 hrs)
• Time records must be maintained on file
11
Per Session Resources
• Chancellor’s Regulation C-175
Per Session Employment
• Hourly Professional Personnel Time Report
12
Per Session
Common Findings
• Secretaries are paid at teacher’s rate
• Per session hours overlap resulting in an
overpayment
• Per session time records/payments are not
approved by the individuals’ supervisor
• Per session time records are not approved
or maintained on file
• Per session time records are not accurate,
e.g. time card does not agree with service
report
13
Per Diem &
Class Coverage
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Per Diem
(Substitute Teachers)
Types of Per Diem Service & Payroll Status Code
• Occasional per diem (O-status) - day to day
substitute assignment
• Long-term per diem (Z-status) – after 30 days or
more in the same position covering the same
absentee
• Full/Part Time per diem (F-status) – working less
than 5 days a week
Per Diem Leave
Information
NOTE
Use PDPS daily to check eligibility of substitutes,
prior to calling anyone for service.
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SMART CARD System
• Complete & fax Site Survey Form to Joe Fryd at
(718) 935-4375
• PC minimum requirements – Pentium with CD-rom
drive, Windows 95 or later, 32 megabytes
memory/mainframe access
• Color-coded eligibility notice
Smart Card
• PDPS interface (in progress)
System
• New per diem teachers
• Training
For questions, please contact
DHR’s Smart Card Help Unit at (718) 935-2635
Sample of Request Letter
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Class Coverage
• Coverage log should be used and must
include at a minimum, the following
information:
- Date of Coverage
- Name of Absent Teacher
- Per Diem Name
- Names of Teachers who covered the class
of the absent teachers, if per diem is not hired
• Program cards should be updated and
maintained on file
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Per Diem/Class Coverage
Common Findings
• Payments are made to a per diem, as well as to a paid class
coverage individual, on the same day for the same absent
teacher.
• Paid class coverage payments are made to an absent teacher
covered by a per diem.
• EIS is not updated to reflect the absent teacher and/or
non-attendance.
• PDPS does not always indicate the “Replacement ID”
information for tracking purposes.
• Poor recordkeeping, e.g. logs are not maintained for paid
class coverages.
• Payments are made to F-status employees for services not
rendered.
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GENERAL SCHOOL FUNDS
&
CASH TRANSACTIONS
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General School Funds &
Cash Transactions
• The accumulated funds (not tax levy or reimbursable
funds) donated to and/or raised by the students
and/or school to support extracurricular and cocurricular student activities.
• Funds must be spent on items necessary for the
proper functioning of student extracurricular and cocurricular activities, or for the direct benefit of
students.
NOTE
Proper recordkeeping and appropriate
internal controls will help ensure that there
are no irregularities within the account
20
New GSF Bank Accounts
Account must be titled:
New York City Department of Education
In Trust For (School Name and/or Number)
General School Fund Account
Copy of signature card must be sent to:
Division of Financial Operations
Bureau of Receivables Accounting – Banking Unit
65 Court Street, Room 1802
Brooklyn, NY 11201
DOE Federal Tax Identification Number is 13-6400434
21
Bank Account Survey
Schools are required to report their year-end June
bank statement balances (non-PTA bank accounts)
for inclusion in the Department of Education's
financial statements. This annual reporting, known
as the Bank Account Survey, can now be submitted
directly to the Division of Financial Operations via
the web on the Bank Account Survey.
https://dfoforms.nycenet.edu/BANK/CONSOLE.ASPX
Year end balances must be submitted on-line each
year.
For questions, contact DFO’s Banking Unit at
(718) 935-2654.
Bank Account
Survey form
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GSF Controls
Segregation of Duties
• Treasurer – full-time regular staff
member of a school selected by the
principal to manage the GSF account.
• Signatories – employees authorized
to sign checks drawn against the GSF
account. Two (2) must sign the
check.
NOTE
The treasurer cannot be one of the authorized
signatories. An individual who is an authorized
signatory cannot sign a check that is made out to
him/herself. There should be at least three (3)
authorized signatories.
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GSF Controls
Fundraising Activities
• Principal approved “Authorization to
Collect General School Funds” form
• “Request for Expenditure” form
• “Final Statement at Conclusion of
Revenue Producing Activity” report
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GSF Controls
Cash Receipts
(Monies Collected)
- Journals/ledgers must be maintained
- Duplicate treasurer’s receipt (prenumbered) must be utilized and maintained
- Cash receipts must be deposited on a
regular and timely basis in a checking
account & must be recorded in the
checkbook for that account.
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GSF Controls
Cash Disbursements
(Monies Expended)
- “Request for Expenditure” form
- Journals/ledgers must be maintained
- Vendor’s invoices/receipts & other
pertinent documentation should be
maintained on file and cancelled (Stamped
“Paid”) to help prevent duplicate payment
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Checkbook Controls
•
•
•
•
•
•
•
•
Limit access to authorized personnel
Blank checks stored in a secure/locked area
A running balance maintained in the checkbook
Checks signed by two (2) authorized signatories
Checks issued in sequential order
Never pre-sign checks
Never write a check payable to “Cash”
Check signatories should review documentation
prior to signing the check
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Other Controls
• Monthly bank reconciliation within ten days
of receipt of bank statements
• Bank statements, cancelled checks and
reconciliation must be reviewed by someone
other than the individual responsible for
preparing the reconciliation and documented
• Follow-up on checks outstanding for more
than 60 days
• Follow-up discrepancies on the bank
statements
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Gifts
Non-monetary Gifts
Valued by donor
$1,000 - $9,999
School personnel must report on-line
FOR REPORTING ONLY
all gifts of $1,000 or more
1. Copy of donor’s letter
proposal
(FOR REPORTING ONLY)
Monetary Gifts*
$1.00 - $9,999
Monetary &
Non-monetary Gifts
$10,000 or more
*If
gifts are to be
used only for OTPS,
school personnel
enters on-line and
may deposit the funds
in School’s Bank
Account (GSF)
2. Letter of request or
To be used for Personnel Expenses
1. Original check
School Based Gifts and
Grants Reporting System
http://nycboe.net/Schools/GiftsGr
ants/Login.aspx?ReturnUrl=%2fsch
ools%2fgiftsgrants%2fDefault.aspx
2. Copy of donor’s letter
3. Letter of request or
proposal
4. Requirement for use
of gifts
SGO (Senior Grants Officer)
DFO’s On-line Gifts/Grants
Tracking System
FAMIS
DFO Receivable Accounting
GALAXY
DBOR
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Grants
School Based Gifts and
All Grants
Grants Reporting System
http://nycboe.net/Schools/GiftsGrants/
Login.aspx?ReturnUrl=%2fschools%2fgif
tsgrants%2fDefault.aspx
1.
2.
Copy of Grant Award
Letter
Copy of School’s proposal
or letter of Request
SGO (Senior Grants Officer)
DFO On-line Gifts/Grants Tracking System
GALAXY
DFO Receivable Accounting
DBOR
FAMIS
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General School Funds & Cash
Transactions Resources
• Chancellor’s Regulation A-610
http://docs.nycenet.edu/docushare/dsweb/Get/Document-26/A-610.pdf
Fundraising Activities and Collection of Money from Students
• Division of Financial Operations-SOP
http://schools.nyc.gov/NR/rdonlyres/3870C36E-58C8-4EE0-916B6C25DD886D9E/0/sopgsfchapter.pdf -
General School Funds & Cash Transactions
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General School Fund
Common Findings
• GSF monies are spent on other than student
related activities such as flowers, staff meeting
refreshments, parking, office equipment.
• Gifts with a value of $10,000 or more are not
reported to management for public disclosure.
• PA/PTA funds, sunshine funds are co-mingled with
the GSF account.
• Cash collected from fundraising activities are used
to pay for expenses, and therefore not deposited
in the checking account for proper accountability.
• Bank accounts are not reconciled monthly which
may result in checks being outstanding for more
than a year and discrepancies going undetected.
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INVENTORY
Textbook
Equipment
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Textbook Inventory
• Separate inventory records for New York State
Textbook Law (NYSTL) must be maintained.
• “NYSTL” must be stamped on all textbooks
purchased with NYSTL funds.
• Annual physical inventory should be completed by
April 15th, and inventory records should be
updated.
• All discrepancies between inventory records and
physical inventory should be investigated and
reported to the principal.
Textbook Inventory Record
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Textbook Inventory
Common Findings
• Inventory records are not maintained
• Annual physical inventory is not
performed
• Distribution records are not
maintained, updated and/or
reconciled with the inventory records
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Equipment Inventory
• Inventory records should be maintained
• Inventory records should be updated when new equipment
is received and/or relocated
• Annual physical inventory should be performed and
completed by April 15th, inventory records should be
updated, and discrepancies should be reported to the
principal
• A “Request for Off-Site Equipment Utilization” form should
be prepared
• Equipment should be utilized as it arrives and should not be
kept in boxes or storage rooms unutilized
• Engrave or permanently labeled all equipment “Property of
NYC Department of Education”
All forms can be accessed through the FAMIS Portal
https://dfoforms.nycenet.edu/FamisPortal/login.aspx?
Sessiontoken=fpotot45itl10tfxkjfsodn2
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Equipment Inventory
Obsolete Equipment
• Equipment may be considered to be obsolete
and no value to the Department of Education
when its condition is:
Category A – Unrepairable or Not cost
effective to repair
Category B - Technologically or educationally
inappropriate for the site, or a safety hazard
to the site
NOTE
Computer equipment classified into Category A must be
disposed of using Dell Managed Services (DMS). The school is
required to contact the DIIT’s Help Desk at 718 935-5100
or http://helpdesk.nycenet.edu/for follow up by DMS.
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Equipment Resources
• Dell Manage Service link
http://www.managedservices.nycenet.edu/
check the status of an order; identify your Regional
Technology Manager; how to obtain Dell's inventory.
• Advertised Items
http://schools.nyc.gov/Offices/DFO/SOP/AdvertisedItems
/aditems.htm
• Inventory-SOP
http://schools.nyc.gov/NR/rdonlyres/A043AAF1-A4394D7E-BB63C46F7FDA7DEB/0/sopinventoryfinalchapter.pdf -
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Equipment Inventory
Common Findings
• Inventory records are not maintained
and/or updated.
• Equipment could not be located, and for
missing equipment, police report is not
prepared.
• Equipment was observed not used, e.g., still
in original boxes/cartons unopened.
• “Request for Off-Site Equipment
Utilization” form is not prepared.
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FIRE DRILLS & SAFETY
40
Fire Drills
State Law Requirement (Section 807)
- At least 12 times in each school year
- Eight (8) drills by Dec. 1st
- Instruction given on procedures to be followed in the
event that a fire occurs during lunch period; or,
actual fire drill performed during a lunch period
- Summer school, two (2) additional drills, one in the
first week
NOTE
Neglect by a principal or other person in
charge to comply with the above requirements
is a misdemeanor punishable by a fine.
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Other Safety Drills
• School Bus Safety Drills
No less than three (3) per school year
– 1st drill, within the first 5 days of school
– 2nd drill between 11/1 – 12/31
– 3rd drill between 3/1 – 4/30
– Certificate of Compliance must be on file at
the school
• Shelter Drills
No less than three (3) per school year
– One (1) drill by December 1st
42
Fire Drills & Safety
Resources
• Chancellor’s Regulation A-414
http://docs.nycenet.edu/docushare/dsweb/Get/Document-18/A-414.pdf
Safety Plans (School Safety Committee)
• School Safety Plan on-line at
http://erceo.nycenet.edu
• Office of Pupil Transportation
http://www.opt-osfns.org/opt/sch/safety_drill.asp
• Chancellor’s Regulation A-801
http://mtapp21.nyced.org:8080/docushare/dsweb/Get/Document-39/A-801.pdf
For additional information,
please contact your Regional Safety Administrator
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High Risk Areas
 Exterior exit doors must be unlocked and
operable
 Swinging hallway/stairwell doors must open
and close
 Access gates and doors leading to roof
must have a key made accessible
 All exit doors must be unobstructed
 Fire alarm system must be in good working
order
44
PURCHASING
45
Purchasing
Documentation
•
•
•
•
•
•
Invoice
Purchase Order
Packing Slip
Certification of Delivery
Logs/agendas/participants list
Bidding documents
46
Purchasing
Common Findings
• Purchases could not be substantiated by
any type of supporting documentation
• No proof/confirmation that purchases
were actually received
• No written justification nor approval of
sole-source vendor purchases
• Bidding documentation, when required, was
not solicited thereby circumventing DOE
procurement policies
47
Purchasing
Common Findings
• Vendor invoices were not on file to support
payment
• Purchases were paid without proper
authorization and approval
• Vendors were paid before goods are
delivered or services are rendered
• No separation of duties
• No indication that vendor’s invoices were
paid
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PROCUREMENT CARD
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Procurement Card (P-card)
• Used for purchases related to theater and
museum admission fees for students, and supplies
and materials (Staples approved vendor).
Additionally, on-line purchases can be made at
the Staples. Register at https://www.staplescentral.com
• Enrollment application at FAMIS portal
https://dfoforms.nycenet.edu/FamisPortal/login.aspx?Sessio
ntoken=bxtxvb55l5mejzaog2fpmjj0
• Usage log should be maintained
• Monthly-itemized expense reports must be
compared with receipts and invoices to verify any
billing discrepancies (commercial card statement)
• P-Cards expire at the end of fiscal year
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P-Card Resources
SOP – Other than Personal Service (OTPS)
http://schools.nyc.gov/NR/rdonlyres/4898D649-3CE7-40F9-997DA3B27819C3A9/0/otpspurchasesMarch06.pdf
Report billing discrepancies to
JP Morgan Chase Bank & DFO’s Bureau of
Finance
For additional information,
contact DFO at (718) 935-2841
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P-Card
Common Findings
• Log is not maintained to record all
purchases
• Commercial card statements are not
reconciled with P-Card usage records.
• Vendor’s invoices/receipts are not
maintained on file.
• P-Cards are not secured in a safe location
when not being used.
• Schools paid sales tax for non-taxable
items.
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METROCARD
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MetroCard Controls
• Distribution log should be maintained and should
include student name & signature, MetroCard no.,
and replacement information.
• MetroCard should be kept in a safe at all times, not
in locked filing cabinets, desk drawers or offices.
• School cannot under any circumstances lend
MetroCards to another school.
• School must account for all MetroCard issued, on
hand, lost/stolen, deactivated, etc. and should be
performed monthly.
NOTE
At no time, should a student wait more than
two weeks for a replacement.
Immediately, report all lost or stolen
MetroCard(s) to the New York City Transit.
54
MetroCard Resources
For additional information, visit the
Office of Pupil Transportation website
http://www.opt-osfns.org/opt/metrocards/default.asp
55
MetroCard
Common Findings
• Distribution records are not
maintained
• Cards could not be accounted for
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For assistance, please contact the
Office of Auditor General
at 718 935-2600 or
[email protected]
This presentation is available on the web at
http://schools.nyc.gov/Administration/Offices/GeneralCounsel/
AuditorGeneral/TrainingProcess/default.htm
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