Office of Shared Accountability MONTGOMERY COUNTY PUBLIC SCHOOLS Rockville, Maryland September 23, 2009 MEMORANDUM To: Mr. Carlos R. Hamlin, Principal Thomas Edison High School of Technology From: Roger W. Pisha, Supervisor, Internal Audit Ve Subject: Report on Audit of Independent Activity Funds for the Period October 1, 2007, through July 31, 2009 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 the Thomas Edison High School of Technology for the period October 1, 2007, through July 31, 2009. The examination was made to determine the adequacy of accountability over these finds, compliance with applicable Montgomery County Public Schools (MCPS) policies and procedures, and effectiveness of IAF management. Findings and Recommendations We met with you, Mrs. Julia Broyles, business manager, and Mrs, Barbara Baliles, financial assistant, on September 15, 2009, and discussed the progress made on conditions identified in our previous report dated November 6, 2007. We recognize that the efforts of Mrs. Broyles and Mrs. Baliles to maintain accountability over funds helps to assure that IAF benefit the students at the ‘Thomas Edison High School of Technology. We also noted that you and the financial team have attended the mandatory IAF training. Areas that continue to need improvement are described below. MCPS Form 280-54, Request for a Purchase, is used to obtain principal approval to proceed with an intended purchase (see IAF manual, p. 8). Invoices for goods or services must be signed by the purchaser to indicate satisfactory receipt. In our random sample of disbursements, we found prior approval was not obtained when required for most purchases, and many invoices were not signed by the receiver. By requiring prior approval, the principal retains control over the expenditure of IAF funds, We recommend that Form 280-54 be prepared by staff and signed by you at the time verbal approval is sought, so that purchase orders and invoices bear a date subsequent to the approval date, and that account sponsors be advised to sign invoices to indicate satisfactory receipt of goods or services before submitting to the financial office for payment to the vendor.Mr. Carlos R. Hamlin -2- September 23, 2009 In accordance with the August 4, 2008, memorandum from the chief operating officer (COO), the expenditure of general funds to provide refreshments for staff meetings (IAF account 11) and appreciation (IAF account 20) is $45 per staff FTE per fiscal year. You exceeded this allowable amount for fiscal year 2009. We recommend you adhere to the guidelines in the August 4, 2008, memorandum from the COO pertaining to the amount of general funds that may be spent for both meeting refreshments and staff appreciation. Field trips must be conducted in accordance with MCPS Regulation IPD-RA, Travel-Study Programs, Field Trips and Other Student Organization Trips. Trip approval forms signed by the principal (and community superintendent, when required), should be retained. Sponsors should record cost and fee information for each field trip on MCPS Form 280-41, Field Trip Accounting, or equivalent, and submit the data to the financial assistant when a trip is completed (see IAF manual, p. 13). The record of the names of participants and sums collected strengthens intemal controls by enabling the reconciliation of receipts to sums recorded in the field trip account. Review of field trip activities revealed that not all field trip sponsors provided financial information to the financial assistant at the conclusion of a trip, and approval forms signed by the community superintendent for overnight trips were not maintained on file in the school. We recommend all sponsors be required to follow the procedures outlined above. Other matters were discussed and satisfactorily resolved. We appreciated the cooperation and assistance of your staff, especially Mrs. Broyles and Mrs. Baliles. In accordance with MCPS Regulation DIA-RA, Accounting for Financial Operations/Independent Activity Funds, please provide a response to the Internal Audit office within 30 days of this report, with a copy to Dr. Frank Stetson, community superintendent. RWP:DKH:sd Copy to: Mr. Bowers Dr. Lacey Mr. Bedford Dr. Scott Dr. Stetson Ms. DeGraba Ms. Diamond Mr. Doody