Office of Shared Accountability MONTGOMERY COUNTY PUBLIC SCHOOLS Rockville, Maryland June 12, 2009 MEMORANDUM To: Mr, Leroy Evans, Principal Col. Zadok Magruder High School From: Roger W. Pisha, Supervisor, Internal Audit Rieter Subject: Report on Audit of Independent Activity Funds for the Period November 1, 2007, through March 31, 2009 This audit report presents the results of our examination of the financial records, reports, and internal accounting controls relating to the Independent Activity Funds (IAF) for Col, Zadok Magruder High School for the period November 1, 2007, through March 31, 2009. 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. Findings and Recommendations We appreciated the opportunity to meet with you, Ms. Joyce Offutt, business manager, and Ms. Kristie Hughes, financial assistant, on May 29, 2009, to discuss the results of our audit. At the meeting we noted significant progress made to improve conditions described in our previous report dated January 28, 2008. We encourage you to continue efforts to implement recommendations pertaining to the unresolved conditions. It is evident from the meeting that you are committed to implementing changes to ensure effective control over, and appropriate use of student funds. We note that the financial assistant and business manager have attended the mandatory IAF training and that you attended training December 11, 2008. Our findings and recommendations appear below. Disbursement of IAF must be controlled in a number of ways. Disbursements must be approved in advance and in writing using MCPS Form 280-54, Request for a Purchase. After a purchase is completed, the recipient of the goods or services should submit the invoice or documented evidence of purchase, noted to indicate the satisfactory receipt of the goods or services, to the financial assistant. A check may then be drawn and charged to the appropriate activity account. It must bear two signatures, one of which is that of the principal or acting principal. A random sample of 55 purchases was selected to test for appropriate supporting documentation and approval prior to consummating a purchase. The school policy is purchases over $200 require pre-approval. In our sample 47 disbursements required pre-approval. Our review of disbursements disclosed that 7 disbursements were not pre-approved, and supporting documentation was not sufficient for one disbursement. Among the disbursements we examined was a reimbursement to the drama sponsor for travel to attend a conference in another state. We could find no documentation that the trip had beenMr. Leroy Evans 2s June 12, 2009 approved as required by MCPS Regulation DIE-RB, Out of State, Travel on Official Business. We recommend a procedure be implemented to ensure all reimbursable travel has the requisite approval. Admission receipts for athletic and non-athletic events should be controlled according to MCPS Regulation DMB-RA, Control of Admission Receipts, which requires use of serially numbered tickets, separation of duties, and preparation of MCPS Form 280-50, Tickets and Cash Report of Admissions Manager, to report and reconcile sales, and the perpetual ticket inventory. While controls over athletic admissions were adequate, we recommend the financial assistant record the receipt number on Form 280-50 when funds are remitted by the ticket manager. We found, however, that controls for other events were not adequate. Tickets for the “Kiss Me Kate” production were not serially numbered and a $1,349.00 overage was not explained, The Tickets and Cash Report of ‘Admissions Manager, for a November 2008 production was not reconciled as of April 24, 2009, and the information was not available to verify that proceeds of all ticket sales were remitted. Ina similar manner we were not able to verify tickets sold to the May 2008 Prom because the unsold tickets were misplaced by the acting financial assistant. We recommend that procedures for sale of tickets be reviewed with appropriate staff prior to events, that all tickets be serially numbered and issued by the ticket controller, and that the principal be informed when sponsors do not provide adequate and timely information to close out ticketed events. We were informed at our meeting with you-on May 29 that the business manager has implemented new procedures to control drama ticket sales. A review of field trip activities revealed that not all field trip sponsors are providing completed financial information to the financial assistant at the completion of a trip. Sponsors should record cost and fee information for each field trip on MCPS Form 280-41, Field Trip Accounting, ot 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 internal controls by enabling the reconciliation of receipts to sums recorded in the field trip account. We also noted that community superintendent approval for out of town and overnight field trips was not in the completed field trip files. We recommend that the business manager instruct all field trip sponsors on the information required to be submitted to the business office at the completion of a field trip. Other matters were discussed with Ms. Offutt and Ms. Hughes and satisfactorily resolved. We appreciated their cooperation and assistance during the audit. 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 Mr, Adrian Talley, community superintendent. RWP:WKHisd Copy to: Mr. Bowers ----» Mr-Bedford Mr. Talley Ms. Diamond Dr. Lacey Dr. Scott Ms. DeGraba Mr. Doody