FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
INADEQUATE CONTROLS OVER PROPERTY
The Regional Office of Education #4 did not have adequate controls over fixed assets. For example, there were no formal policies or procedures to monitor and control equipment and other fixed assets. General Operations fixed assets were not tagged, and the fixed asset listing for some funds/programs did not include the reference acquisition document (check no.), acquisition date and/or the tag number. The technical coordinator performs an evaluation of computer equipment as to obsolescence or usefulness. However, proper forms were not used to document disposal or retirement of assets. Disposal dates were also not included in the fixed asset listing. Finally, the detailed fixed asset listings were not reconciled with the balances reported in the General Fixed Asset Account Group.
The Regional Office of Education (ROE) Accounting Manual requires each ROE to maintain detailed fixed asset records for both accounting purposes as well as insurance purposes, for fixed assets costing $500 or more. In addition, sound internal controls require that policies and procedures on fixed assets cover the acquisition and tagging, recording and reporting, depreciation (if applicable), transfers and dispositions, and physical inventory, and that they be formally documented and consistently applied (Finding 03-1, page 12-14).
The auditors recommended that the Regional Office develop formal policies and procedures over fixed assets. The Regional Office of Education #4 responded that despite having no formal written policies regarding fixed assets, no equipment has been lost. Also, since they track the actual location of the assets, the Regional Office noted that internal controls over fixed assets has not been a problem. The auditors commented that unwritten policies and procedures do not provide sufficient controls and that the ROE’s unwritten policies and procedures were not being uniformly followed.
UNRECONCILED WORKSHOP RECEIPTS
The Regional Office of Education #4 receives payment for workshops and seminars. Official receipts are not issued to participants due to the volume of transactions and lack of manpower. A Workshop Summary Schedule (Summary) is prepared detailing the cash/check received, type of workshop and name of participant. In testing of 10 deposits, total amounts in 9 of the deposits sampled exceeded the total amounts in the Summary of receipts by $31,776.15. There was no formal reconciliation of the deposit amounts with the amounts in the Summary, nor was there an adequate audit trail to identify in which deposit batch the individual items in the Summary were included, and which deposit items were for miscellaneous receipts that were not included in the Summary.
Sound internal controls require that all checks received should be deposited intact. The total amount of the deposit should equal the total of the supporting documents. A reconciliation of deposit amounts with the supporting receipt documents should be performed and formally documented (Finding 03-2, pages 15-16).
The Regional Office of Education #4 stated they have now balanced and verified all summaries and deposit slips for the workshop fund for the dates in question and there were no missing or misappropriated funds. The Regional Office of Education #4 stated they have developed policies and procedures that will provide checks and balances and will ensure that workshop records are accurate.
AUDITORS’ OPINION
Our auditors state the Regional Office of Education #4’s financial statements as of June 30, 2003 are fairly stated in all material respects.
_____________________________________
WILLIAM G. HOLLAND, Auditor General
WGH:KJM:ro
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors were E.C. Ortiz & Co., LLP.
