FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
INADEQUATE REVIEW OF LONG OUTSTANDING CHECKS
Review of bank reconciliation statements identified outstanding checks totaling $9,990.79 that date back from 3/28/96 through 11/11/02. Two checks totaling $6,243.59 had actually been reissued and should have been voided. The other outstanding checks were determined to be not yet cashed by the payee.
Sound internal controls on cash require checks outstanding for a considerable amount of time to be periodically investigated. If necessary, payment should be stopped and an entry should be made to restore such items to cash. (Finding 03-1, page 12)
The Regional Office of Education #34 accepted the auditor’s recommendation and will conduct a monthly review of long outstanding checks and determine the disposition thereof. The Regional Office stated the payee will be notified that if the check is not cashed immediately, it will be canceled and a new request will have to be submitted in order to have the check reissued at a later date.
INADEQUATE CONTROLS OVER PROPERTY AND EQUIPMENT
The Lake County Regional Office of Education #34 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. The inventory list did not have complete information as to acquisition date, acquisition source document (check number), and purchase cost for some items. Transfers of equipment from one location to another were not formally documented. The balances in the General Fixed Asset Account Group were not recorded in the general ledger. Finally, the detailed fixed asset listings were not reconciled with the balances reported in the General Fixed Asset Account Group.
The 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 03-2, pages 13-15)
The Regional Office of Education #34 accepted the auditor’s recommendation and will develop fixed asset policies and procedures to be added to the existing internal control policy manual.
OTHER FINDING
The remaining finding is less significant. We will review progress toward the implementation of our recommendations during the next audit.
AUDITORS’ OPINION
Our auditors state the Regional Office of Education #34’s financial statements as of June 30, 2003 are fairly presented in all material respects.
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WILLIAM G. HOLLAND, Auditor General
WGH:JRB
SPECIAL ASSISTANT AUDITORS
Our special assistant auditors were E.C. Ortiz & Co., LLP.
