The two district audits chosen for this assignment deal with Kenmore-Town of Tonawanda Union Free School District and East Rochester Union Free School District, respectively. Kenmore-Town of Tonawanda Union Free School District employs 1700 people and generates 156 electronic warrant reports. It serves a town of Tonawanda in Erie County, a relatively small town with the population of approximately 20,000 people. The second district, East Rochester Union Free School District, “serves the Town of East Rochester and portions of the Towns of Penfield, Perinton and Pittsford in Monroe County” (p. 1). The district is compatible in size with Town of Tonawanda Union Free School District, which facilitates the comparison of audit methods and results in the given districts. Both districts are governed by the Boards of Education that control the districts financial and school matters.
Areas of Operations Evaluated
Kenmore-Town of Tonawanda Union Free School District had its maintenance of electronic records and reports evaluated. Moreover, the policy of keeping e-records within the organization was assessed and as well as its compliance with “applicable legal and regulatory requirements” and district policy (p. 1). In East Rochester Union Free School District, auditors evaluated the procurement operations and their compliance with Competitive Bidding Requirements. Moreover, the district’s policy in obtaining goods and services was assessed in order to reveal its compliance with New York State General Municipal Law (GML) Section 104-b. In both districts, relatively narrow fields of school district activities were evaluated which makes the reports more compatible and easier to compare.
Key Findings From the Auditors
In Kenmore-Town of Tonawanda Union Free School District, the auditors found that electronic disbursement records were not properly preserved. First of all, the school district authorities violated the provisions of the Electronic Signatures and Records Act (Act) that stated that records must be stored in a place allowing to “maintain their integrity and authenticity” (p. 2). By this place a separate electronic folder is meant which, additionally, should have defence against unauthorised modifications. However, the school district kept e-records in ordinary folder, and, besides, in a modifiable format. On top of it, audit disclosed that some of the records have been modified after the date of their entrance which pointed to fraudulent practices within the organization.
Secondly, a summary payroll check register generated by district authorities did not comprise details about deductions as well as calculations of gross pay for each employee. This led to discrepancies between the total gross pay listed on the summary report and the detailed payroll check register. These discrepancies found their reflection in the electronic documents that, besides, could have been modified. Finally, the policy adopted by the Boards of Education did not provide clear guidance as to how e-records should be kept in accordance with the Act.
In East Rochester Union Free School District, the school district authorities did not follow the competitive bidding requirements that state that competition should be held for the nest provider of goods and services. In some cases, goods and services were obtained without any competition; in others, the competition was not documented in the electronic format. Moreover, it has been found that the same company was employed several times without any reasonable grounds for choosing it since it did not offer a better deal either in terms of money or in terms of a price.
Secondly, East Rochester Union Free School District did not elaborate adequate purchasing policies, since the provisions stated in the documents contained discrepancies and, in some cases, contradicted each other. Thirdly, the policy provided no clarity as to what grounds other than lowest price should be considered when awarding a contract and stating its value. Moreover, the policy has not been re-examined each year as required by the law which resulted in a large number of inconsistencies and omissions.
Thus, the key findings from both reports outlined ineffective policy on the audited issues, that allowed space for fraudulent practices. These practices were revealed, raising questions about the effectiveness of districts’ work. The other issue disclosed by the auditors common for both districts is that of negligence when policies were not properly elaborated or updated on a regular basis. Compliance of the district’s policies with relevant laws in the corresponding fields of practice was also poorly observed. ‘
Regulations and Standards Used
As justification for inclusion in the audit findings, in Kenmore-Town of Tonawanda Union Free School District the Controller cited “Section 35 of General Municipal Law, Section 2116-a (3)(c) of New York State Education Law and Section 170.12 of the Regulations of the Commissioner of Education” (p. 9). In East Rochester Union Free School District, the Controller cited “Section 35 of General Municipal Law, Section 2116-a (3)(c) of New York State Education Law and Section 170.12 of the Regulations of the Commissioner of Education” (p. 9).
District Responses to the Findings and Improvement Steps Cited
Both districts admitted their fault and engaged into corrective actions outlined by the auditors. In Kenmore-Town of Tonawanda Union Free School District, officials cited such steps as database modification so that e-records are kept separately from other files. Moreover, they intended to begin work on creating procedural manual to ensure that the new policy was in compliance with regulatory requirements concerning e-records. In East Rochester Union Free School District, officials intend to make the competition and its criteria transparent to all the participants. They want to make sure that relevant documentation for competitive bidding procedures is elaborated and maintained in the electronic format. Moreover, in both districts, work is undertaken to see to it that the district policy is annually updated. Both districts cited reviewing their policy to meet the regulations.
My Recommendations
If I were the School Business District Leader of these districts, I would concentrate first of all on removing gaps for fraudulent practices which took place in both districts. In Kenmore-Town of Tonawanda Union Free School District, I would make sure that every possibility of unauthorised modifications is taken care of and I would insist on putting e-records in a separate folder as required by the Act. Besides, I believe it would be wise to make either an electronic or paper copy of these records in case the computer breaks down and they get lost. In East Rochester Union Free School District, I would concentrate on elaborating criteria for free and fair competition and for determining the value of diverse companies’ offers. I would carefully monitor the cases where one contractor gets to deliver products and services more than two times and make sure the company gets the nest value out of each contract. In both cases, I would concentrate on eliminating violations not to be cited in a future audit.
References
East Rochester Union Free School District – Procurement (2022M-56) (2022). Division Of Local Government and School Accountability. Web.
Kenmore-Town of Tonawanda Union Free School District – Electronic Records and Reports (2022M-62) (2022). Division Of Local Government and School Accountability. Web.