Department of Reporting and Regulatory Accountability MONTGOMERY COUNTY PUBLIC SCHOOLS Rockville, Maryland February 14, 2006 MEMORANDUM To: Mr. Lamar Whitmore, Principal Flower Hill Elementary School From: Philip J. McGaughey, Jr., Coordinator, Intemal Audit P. Ame q b bh. Subject Report on Audit of Independent Activity Funds for the Period January 1, 2003, through December 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 Flower Hill Elementary School for the period January 1, 2003, through December 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 IAF management. Findings and Recommendations We advised you in our meeting on Friday, February 3, 2006, that the school’s financial records and reports were in excellent condition. It is evident that Ms. Patti Boccabello, administrative secretary, is fully aware of the Manual of Policies and Procedures for Administering Independent Activity Funds (manual) and applies the manual’s requirements to foster sound financial management. We discussed conditions and recommendations to further strengthen internal controls. These conditions are described below. As previously reported, MCPS Form 280-54, Request for a Purchase, is often used as a request of issuance of a check, rather than as written authorization to proceed with an intended purchase. To minimize the risk of questionable purchases it would be beneficial to emphasize to staff the need to obtain your advance written approval for purchases over a minimum amount established by you (see IAF manual, p. 8). MCPS Form 280-41, Field Trip Accounting, or its equivalent, should be tured in to the administrative secretary when a trip is completed to ensure that all funds collected by sponsors are recorded in the IAF records. All field trip accounting records are to be retained until the next audit (see IAF manual, p. 13). We found that staff appreciation items were being purchased using the IAF general account. Disbursements may be made for staff appreciation items only from funds derived from staffMr. Lamar Whitmore +2- February 14, 2006 activities or funds donated for that specific purpose by the PTA, booster club or student organization (see IAF manual, p. 3). Sponsors of fund raising activities should prepare a completion report, including the analysis section, when the activity is concluded. The analysis compares the actual results with the expected results and is useful for evaluating the controls over the activity and documenting the reason for any significant shortfall. As with all IAF funds collected by sponsors, fund raising receipts must be promptly submitted to the administrative secretary to reduce the risk of loss or theft (see Guidelines for Sponsoring an Independent Activity Fund Fund Raiser). We found that the school staff purchased digital cameras and printer but did not have them labeled as MCPS property and added to the school inventory. In addition, these items had been removed from the school premises. All property acquired with MCPS funds must be identified as school property. MCPS Form 234-23 Receipt and Bond Form for Equipment Loan, must be on file for any property removed from the school premises (see IAF manual, p. 20). Other matters were discussed with Ms. Boccabello and satisfactorily resolved. Her assistance and cooperation greatly facilitated our review. Please provide a response to Dr. Kevin Maxwell, community superintendent, within 30 days of this report, with a copy to the Internal Audit office. PJM:MJB:rr Copy to: Mr. Bowers Mr. J. Porter Mr. Kress Dr. Maxwell Ms. DeGraba Mr. Doody Mr. Hedges