Department of Reporting and Regulatory Accountability MONTGOMERY COUNTY PUBLIC SCHOOLS Rockville, Maryland October 7, 2005 MEMORANDUM To: ‘Mr. John D. Ewald, Principal Westbrook Elementary School Philip J. McGaughey, 1c, Coordinator, Intemal Audit P.M¢ Yemgdhing be Subject Report on Audit of Independent Activity Funds for the Period : January 1, 2005, through August 31, 2005 This audit report presents the results of our examination of the financial records, reports, and intemal accounting controls relating to the Independent Activity Funds (IAF) for Westbrook Elementary School for the period January 1, 2005, through August 31, 2005. ‘The examination was made to determine the adequacy of accountability over these funds, compliance with applicable Montgomery County Public Schools (MCPS) policies and procedures, and effectiveness of [AF management. It should be noted that the majority of IAF transactions occurred prior to your appointment to the school effective on July 1, 2005. Findings and Recommendations In our memorandum dated February 2, 2005, we described conditions that weaken accountability and controls over purchasing, and made recommendations for improvement. These previously reported conditions still persist, and there are additional opportunities to improve controls. ‘These conditions are described below. Several important internal control measures are not being used. First, we were unable to determine whether sponsors who collect funds related to school activities were being required to review and certify transactions recorded in their monthly activity reports. This process is critical to ensure income and disbursements affecting the accounts are properly recorded (see IAF manual, p. 12). Second, there was no evidence that transfers of funds between LAF accounts had been approved by the principal. To reduce the risk of questionable practices, all transfers should be approved by the principal (see IAF manual, p. 12).Mr. John D. Ewald 3. October 7, 2005 While it is clear that field trip sponsors are using MCPS Form 280-41, Field Trip Accounting, to record fees collected, we were unable to match funds listed on the forms to the amounts recorded in the monthly account reports. As noted above, all sponsors of school activities should ensure all funds collected are properly recorded in the accounts. There were indications that a staff member had conducted a fund raising activity involving the sale of merchandise. There was nothing indicating that this activity had been approved by the principal, or that a completion report had been prepared. Therefore we were unable to determine that there was an accounting for all merchandise and funds from this activity, also no provision for collection of sales tax was included in the activity. All school fund raising should be conducted in compliance with MCPS Policy CND, School-Related Fund Raising, and as detailed in the Guidelines for Sponsoring an Independent Activity Fund Fund Raiser. Other matters were discussed and satisfactorily resolved. We appreciated the cooperation and assistance of Ms. Jan Scott, administrative secretary. Please provide a response to Dr. Frank Stetson, community superintendent, within 30 days of this report, with a copy to the Internal Audit office. PJM:LS:rr Copy to: Mr. Bowers Mr. Porter Mr. Kress Dr. Stetson Ms. DeGraba Mr. Doody Mr. Hedges