Attachment_A-FY13__Internal_Accounts_Report_FINAL.pdf

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Internal Audit of

Internal Accounts

As of June 30, 2013

Prepared By:

Internal Auditors

Table of Contents

Transmittal Letter

Executive Summary ......................................................................................................... 2 - 5

Background ..................................................................................................................... 6 - 7

Objectives and Approach

Overall District Comments

Individual School Comments ....................................................................................... 10 - 152

McGladrey LLP 7351 Office Park Place Melbourne, Florida 32940-8229 O 321-751-6200 F 321-751-1385 www.mcgladrey.com

October 21, 2013

The School Board of the School Board of Polk County, Florida Bartow, Florida 33830-0391

Pursuant to the arrangement letter dated March 8, 2013, we hereby submit our report of the audit of the Internal Accounts for the School Board of Polk County, Florida (“District”). We will be presenting this report to the School Board during the scheduled meeting on December 10, 2013 or January 14, 2013.

Our report is organized in the following sections:

Executive Summary This provides a summary of the results related to our Internal Accounts Audit.

Background This provides an overview of the Internal Funds Accounts.

Objectives and Approach The internal audit objectives and focus are expanded upon in this section as well as a review of the various phases of our approach.

Overall District Comments This section provides a description of the overall District comments and recommended action along with management’s response.

Individual School Comments This section provides a description of the comments and recommended action by school and area along with each principal’s response.

We would like to thank the individual schools and all those involved in assisting us in connection with the Internal Accounts engagement.

Respectfully Submitted, Executive Summary

Executive Summary

Our engagement was conducted at the School Board of Polk County’s administrative offices utilizing sampling and other techniques to meet our engagement objectives. School internal account funds are defined by the Florida Department of Education Financial and Program Cost Accounting and Reporting for Florida Schools (“the Red Book”) as, “all local school funds derived by any public school from all activities or sources.”

Previously, the District utilized a 5-year rotational model for selecting schools. For Fiscal Year Ended June 30, 2013, the District increased the sample and implemented detailed testing at 50% of the schools.

As such, 58 schools sites were selected. The schools were selected based on their timing in the 5-year rotation, previous internal account audit results and principal/financial secretary turnover. We performed testing of the following bulleted areas, as more fully described below. A graph depicting the sample by level of school is shown below.

We have made specific recommendations and management has agreed to a corrective action plan for each school with detailed responses included herein. The most common findings are depicted in a graph on page 5.

A summary of the school internal account activities for the 2012-2013 year, which are included in the District’s Comprehensive Annual Financial Report, are as follows:

Balance July 1, 2012 Receipts Disbursements

Balance June 30, 2013

Total 9,706,939$ 11,616,961$ 11,395,998$ 9,927,902$

School Board of Polk County Internal Accounts Activity

June 30, 2013

Summary of Certain Provisions of the Internal Accounts Manual

Deposit Reports As stated in Internal Accounts Policy 1.121, the Report of Monies Collected form is used by a teacher/sponsor when collecting funds from students outside of the school office. The Report of Monies Collected form should be completed in detail, signed and dated by the teacher/sponsor collecting funds outside of the school office and the funds and related documentation are required to be turned in to the school office daily and signed and dated by the financial secretary or principal at that time. The teacher/sponsor and principal/financial secretary signatures on the Report of Monies Collected forms should therefore be on the same date. An Official Receipt is issued to the teacher or sponsor who collected the funds from students per Internal Accounts Policy 1.122, providing documentation that the funds were turned into the office. Deposits should be made in accordance with the timeliness requirements of Internal Accounts Policy 1.009 (4), requires all money collected to be deposited intact in the bank as frequently as feasible as indicated by sound business practices. In any event, funds collected just be deposited once a week. Deposit Reports must, at a minimum, be submitted on a weekly basis to the Internal Accounts department per Internal Accounts Policy 1.125 (3).

14% 3%

19% 57%

7%

Sample by Level Senior High

Middle/Sr

Middle

Elementary

• Cash Disbursements

• Cash Receipts

• Ticket Sales

• Fund Raising Sales

• Bank Reconciliations

• Contracts

• Pre-Numbered Documents

• Procurement Card Purchases

• Support Groups/Booster Clubs

Executive Summary - continued

Summary of Certain Provisions of the Internal Accounts Manual - continued

Fund Raisers Fund Raising Activity forms provide documentation for approval of legitimate fund raisers and provide additional documentation for collections and expenditures. The financial report provides information on the success of the fund raiser for the principals. Internal Accounts Policy Appendix D, Section B.3., requires the principal to approve all fund raising activities conducted by the school, by any group within, connected with, or in the name of the school as documented on Form 00828, Fund Raising Activity Approval Form. Internal Accounts Policy Appendix D, Section B.10., requires Form 00829, Financial Report for Fund Raising Activity, to be filed with the principal's office within 10 days after the close of each fund raising activity. Proceeds from fund raisers should be posted to the accounts for which the fund raiser was approved, as listed on Form 00828.

Contracts Contractual agreements should be obtained from each vendor specifying the terms of the agreement and be signed by the principal for any activities conducted by the school within the scope of Internal Accounts Policy 1.013. Any contracts handled by outside support organizations should be issued in the name of the organization and be signed by the appropriate representative of the outside organization, not by school staff.

Purchasing Cards In addition to the training each recipient receives upon issuance of a new procurement card (“p-card”), the District has a comprehensive Purchasing Card Procedures manual updated in August 2012 and April 2013. The manual is available to all cardholders to inform users of p-card policies and procedures and provide the proper reporting format.

Support Groups/Booster Clubs All support groups and booster organizations connected with or operating in the name of the school shall be accountable to the School Board. An annual financial report for each school year shall be filed with Internal Audit Services.

Pre-numbered Documents Proper use of pre-numbered documents is helpful in deterring theft by providing support of collections.

Unaccounted for Official Receipts, Report of Monies Collected forms or admission tickets could result in unintentional errors or be an indicator of concealment of fraud. The Internal Accounts staff monitors and controls the inventory of pre-numbered documents, including Official Receipts, Report of Monies Collected forms and admission tickets.

Official Receipts and Report of Monies Collected Forms Throughout the year, the Internal Accounts department reviews the logs of Official Receipts and Reports of Monies Collected and notifies schools of any missing or unaccounted for receipts, requesting an explanation.

Summary of Results

There were 185 site based comments, an average of 3.19 comments per school, and 1 District-wide comment for the year ended June 30, 2013, as compared to the following:

• Fiscal year ended June 30, 2012 - 102 site-based comments (an average of 3.4 comments per school) and 4 District-wide comments;

• Fiscal year ended June 30, 2011 - 77 site-based comments (an average of 2.57 comments per school) and 5 District-wide comments;

• Fiscal year ended June 30, 2010 - 79 site-based comments (an average of 2.63 comments per school) and 6 District-wide comments; and

• Fiscal year ended June 30, 2009 - 53 site-based comments (an average of 2.12 comments per school) and 7 District-wide comments.

Our procedures resulted in 57 of 58 schools receiving comments. The highest number of comments received by any individual school was 6, received by 3 senior high schools and 1 middle school. This is an improvement from prior year, as the highest number of comments received by an individual school was 8, received by an elementary school.

Thirty-eight of the 58 schools reviewed as of June 30, 2013 have been in our previous sample population since June 30, 2009, with results as follows:

• Eight schools had a decrease in the number of findings;

• Twenty-two schools had an increase in the number of findings; and

• Eight schools experienced no change in the number of findings.

These areas highlighted below represent most common findings, which amounts to 138 out of 185 (75%) of the findings.

Issue Risk Rating

We noted that 86% (50 of 58) of schools had exceptions from collections that were not turned in by teachers/sponsors daily to the school office, cash/check was not documented, deposits made late to the bank, and/or corrections on official receipts not in accordance with policy. Improvement has been made from FY 2012 where 100% of the schools sampled had issues in this area.

High

We noted that 53% (31 of 58) schools had compliance findings related to fund raising activities. Findings included approval of the fund raiser occurring after the start of the fund raiser, un-timely remittance of the fund raiser financial activity form, non-documented approval and/or date of approval of the financial activity form. Improvement has been made from FY 2012 where 73% of the schools sampled had issues in this area.

Moderate

We noted that 59% (34 of 58) schools had procurement card related findings ranging from transactions not allowed, improper logging in and out of cards, insufficient receipts to support purchases and differences between the support provided and the procurement card statements. This is an increase from FY 2012 where 57% of the schools sampled had issues in this area.

We noted that 40% (23 of 58) schools had compliance findings related to pre-numbered documents. Findings included documentation not remitted to the District and/or without notification of non-compliance and/or not submitted on a timely basis. This was the same percentage as last year.

Summary of Results – continued

Number of Comments for the 58 Schools Selected for Testing

*This includes contracts, financials from outside organizations, sales tax, overdrawn accounts and disbursements.

Deposits Fundraisers P-Cards Pre-Numbered Documents

Other*

Elementary

Middle

Middle/Senior

Senior High

Other

Background

Background

What are school internal account funds?

Pursuant to Chapter 8 of the Red Book requirements, there are several principles related to the treatment of school internal account funds. Note, the terms “internal funds” and “internal accounts” are used interchangeably throughout Chapter 8 of the Red Book. Those principles include:

• The school board shall be responsible for administration and control of internal funds of the District school system, and in connection therewith shall:

o Adopt written rules governing the receipt and disbursement of all internal funds and for the accounting for property pursuant to Florida Statutes.

o Provide for an annual audit of internal funds in accordance with Rule 6A-1.087, FAC.

• The financial transactions of school organizations shall be accounted for in the school internal funds.

All funds handled by school board employees during normal working hours shall be included in and become part of the internal funds of the school unless accounted for in the District level accounting system. All organizations of the school, or operating in the name of the school, which obtain monies from the public, shall be accountable to the board for receipt and expenditure of those funds in the manner prescribed by the board. If authorized by school board rule, a school based direct support organization as authorized by Section 1001.453, F.S., may have all financial transactions accounted for in school internal funds.

• Funds collected by and used for the benefit of faculty and staff may be exempt from the preceding requirements at the option of the school board.

• School internal account funds shall be used to benefit activities authorized by the District school board.

• Student participation in fund raising activities shall not be in conflict with the program as administered by the school board.

• The objective of fund raising activities by the school, by any group within, or in the name of the school shall not conflict with programs as administered by the school board.

• Funds collected shall be expended to benefit those students in school unless those funds are being collected for a specific documented purpose or are generated by vocational production shops.

Vocational production revenue shall benefit the students or program that generated the funds or the student body. Those internal account funds designated for general purposes shall be used to benefit the student body.

• Collecting and expending of school internal account funds shall be in accordance with the Florida Constitution, Florida Statutes, State Board of Education rules, and school board rules. Sound business practices should be observed in all transactions.

• Each school organization should operate within a budget formulated by the organization members.

The format of the budget shall be prescribed by the principal if not prescribed by school board rule.

• Purchases from internal accounts shall not exceed the resources of the applicable student activity/project account, except for items acquired for resale or items authorized by school board rule.

Purchases to support instructional programs may be made from revenue derived from production work of vocational programs.

• An adequate system of internal controls shall be maintained in order to safeguard the assets of the school internal funds.

Background - continued

Auxiliary Accounting Department

The Internal Accounts staff is responsible for processing all internal fund vouchers and deposit reports received from all Polk County Schools, Career Centers, Adult Schools and District Office Divisions in addition to processing all of the internal funds accounts payable checks annually. This staff is also responsible for reconciling the various internal funds bank statements monthly. The Polk County School Board currently operates the only centralized Internal Accounts Department in the State of Florida.

Centralization yields positive results pertinent to economies of scale and increased internal control due to the fact that each school/center is not responsible for administering vendor payments, extensive data entry of source documents, and reconciling individual bank accounts.

Training

The Auxiliary Accounting department and Internal Audit department jointly conduct Internal Accounts training sessions for school principals and financial secretaries. Non-mandatory training was offered on 11/28/2012 with a combined total of 50 attendees. Financial secretaries and principals also have the ability to access on-line training (via Moodle) at their convenience, in which 7 persons utilized during FY 2013. The staff will continue to offer training sessions each school year. In addition to formal training classes, the Internal Audit staff provides individual instruction and training during the school audits performed throughout the year and the Internal Accounts staff provides individual instruction and training to the schools during the year as well.

The Director of Purchasing, accompanied by a representative from Internal Audit Services, Finance and Internal Accounts departments, conducts training sessions for new recipients of procurement cards throughout the year. The training is a prerequisite for issuance of the procurement cards. The Purchasing Card Procedures Manual is reviewed and distributed as part of the training session.

Cardholders sign a Cardholder Agreement indicating that they agree to abide by the Procurement Card Procedures.

Objectives and Approach

Objectives and Approach

Objectives

Objectives of the internal audit of the school internal accounts include the following:

• Perform the annual audit of the District’s school internal accounts as required by the Red Book regulations. Section 4.2 of the Red Book regulations state the following:

o The school board shall provide for an annual audit of internal funds.

o In accordance with Rule 6A-1.087(2), FAC, the signed, written report of the audit shall include notations of any failure to comply with Florida Statutes, State Board of Education Rules and rules of the school board. The report, which must also provide commentary as to financial management and irregularities, shall be presented to the school board while in session and filed as a part of the public record.

• Gain an understanding of the District’s policies and procedures related to school internal funds.

• Determine whether an adequate system of internal controls at each school is maintained around high risk cash handling processes in order to safeguard the assets of the school internal funds.

• Determine whether each school is in compliance with both District internal fund policies and the Red

Book regulations.

Approach

Our audit approach consisted of three phases:

Understanding of the Process In order to obtain an understanding of the District’s school internal fund policies and procedures, we held an entrance conference with District management. We discussed the scope and objectives of the audit work, obtained preliminary data, and established working arrangements.

We also reviewed the applicable Red Book regulations.

Detailed Testing The purpose of this phase was to test compliance and controls around internal fund accounts.

Our fieldwork was conducted at the District office utilizing sampling and other auditing techniques to meet our audit objectives. Findings identified are included in this report. We performed testing of the following areas:

• Frequency of Deposits

• Authorization of Expenditures

• Segregation of Duties

• Cash Disbursements

• Cash Receipts

• Ticket Sales

• Fund Raising Sales

• Review of the General Ledger Accounts

• Bank Reconciliations

• Capitalized Assets

Reporting At the conclusion of our audit, we summarized our findings in a report pursuant to Red Book requirements as outlined in our objectives above. Our report also includes recommendations for improving noted deficiencies. Each school principal received a draft report for their individual school and provided their response to the identified issues and we have incorporated their responses into our report. We had additional follow up correspondence with 45% (25 of 58) school principals either by phone or email.

Overall District Comments

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS - DISTRICT

Rating Issues Recommendation Management Response High 1 Financial Secretary and Principal Training

Recurring

The District provides annual training to all financial secretaries and principals; they also have the ability to access on-line training (via Moodle) at their convenience.

Training attendance is not mandatory, as such FY 2013 in-person and Moodle attendance amounted to 57 persons.

A training program for new and existing bookkeepers that focuses on areas cited during the annual audit process, as well as areas considered by the District to be of high risk, could decrease the number of errors and increase consistency in accounting for internal accounts, thus reducing the risk to the District.

We recommend that the District continue to enforce the annual financial secretary and principal training as mandatory.

Response: For the 2013-2014 current school year, mandatory training was implemented and supported by the Superintendent for all Internal Accounts Secretaries and Principals. We will continue to provide and offer this mandatory training yearly. During the training session, emphasis was placed on audit findings and discussed in great detail. For all principals and secretaries whom did not attend the mandatory training in August and September, a makeup class has been scheduled for November 15th.

ECD: November 15, 2013

Person Responsible:

Individual School Comments

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: AUBURNDALE CENTRAL ELEMENTARY

No comments for this school.

Response: N/A

Estimated Completion Date: N/A

Principal Responsible: N/A

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: BARTOW ELEMENTARY ACADEMY

High 1 Deposits

(2009) Deposit 101554780:

• Report of Monies Collected form

740438 did not include a complete listing of amounts collected by individual.

Without a listing of amounts collected by individual, it cannot be verified whether monies collected are being deposited intact.

We recommend that the following policies be adhered to without exception:

The Internal Accounts Manual states that the Report of Monies Collected form “provides for a listing of the students’ names, the purpose for which the money is being collected, the account to be credited, the amount collected and the indication of cash or check” (1.121).

Response: I reviewed the Report of Monies Collected form 740438 in which “cash” is written two times in the first column instead of a student name.

Attached was an excel spread sheet listing all students alphabetically. A check mark was placed next to the names of the students who purchased a ticket(s).

However, the amount was not listed on the excel spread sheet. I have spoken to the financial secretary, reviewed the proper procedure, and instructed her to always use the RMC forms in the future. A letter of concern will be written that will include the recurring problem of RMS not being completed correctly.

Estimated Completion Date:

October 25, 2013

Principal Responsible:

April Campbell

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: BARTOW ELEMENTARY ACADEMY - CONTINUED

High 2 Purchasing Card

Purchasing Card Report (May):

One purchase was supported by an email of transaction details that was not itemized with price per item paid (Presidents Service Awards). As such we were unable to determine the mathematical accuracy of the invoice.

Missing and/or insufficient supporting documentation could result in misappropriation of funds.

The Purchasing Card Procedures state that, “Any time a purchase is made that will be paid using the Purchasing Card, the Cardholder/card user is to obtain a customer copy of the charge slip, which will become the accountable document” (Section 10.1). The charge slips should include an itemized list of individual purchases and are necessary to reconcile purchases to the statement. In addition, the charge slips should be compared to the credit card statement for accuracy. We recommend that this policy be followed without exception.

Response: I reviewed the order form for the President’s Service Awards. I then reviewed the order form with the financial secretary and explained that a list of names indicating who would receive the awards was on the order, but each certificate did not have an individual price.

I reviewed the requirement of having each item itemized on a transaction. A letter of concern will be written to the financial secretary that will include the recurring problem of transactions not having itemized prices.

Estimated Completion Date:

October 25, 2013

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: BARTOW ELEMENTARY ACADEMY - CONTINUED

Moderate 3 Sales Tax

During our testing of disbursements, we noted that four purchases made by purchasing card in May 2013 inappropriately included sales tax (UPS Store, Image Depot and two Hungry Howies purchases).

The School Board is not subject to sales tax; therefore sales tax should not be paid or reimbursed unless purchasing items for resale.

The Internal Accounts Manual (Section 1.034) states that, “The general rule for the payment of sales tax is that all expenditures from Internal Accounts are exempt from sales tax which are made for customary instructional activities and which do not represent expenditures for items for resale to individuals, including the general public.”

We recommend that this policy be followed

Response: I reviewed the transactions and found three were made by the financial secretary and one by the art teacher. I reviewed the memo that was distributed on 2/14/12 to all teachers that included a review on the use of the procurement card and tax exemption with the art teacher. I reviewed the three transactions the secretary made with her.

A letter of concern will be written to the financial secretary that will include purchases that inappropriately include sales tax.

Estimated Completion Date:

October 25, 2013

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: BOSWELL ELEMENTARY

Moderate 1 Purchasing Card

Purchasing Card Report (February):

The purchase report was not timely submitted to the District Internal Accounts office. The purchase report was received at the district on 4/5/2013.

Delays in the reporting process could be the result of missing documentation or misappropriated funds.

The Purchasing Card Procedures state that the credit card statement and the monthly purchasing card purchase report and all attachments should be forwarded to the Accounting department within two working days after receipt (Section 10.3.3). We

Response: One month (February 2013) our statement was not able to be pulled.

Sheila Conrad had to give us a link by way of email so we could reach the Regions Bank Center and print our statements. We are still using that link to retrieve our statements. We are timely with all our statements with the exception of the one In February because of a technology problem (computer issue).

The district was aware of this problem and helped us to get it corrected.

Estimated Completion Date:

All statements are timely for 2013 with the exception of the one listed. All are timely for the 2013-2014 school year to date.

Pamela S. Wingate

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: CALDWELL ELEMENTARY

Deposit 101529843:

• Funds collected on 11/17/2012 were not deposited at the bank until 1/15/2013 (Official Receipt 262605).

• The financial secretary was the initial collector of a direct collection on Report of Monies Collected form 731652.

• A donation of $2,500 was received by the school but not approved by the School Board.

Deposit 101575558:

• The financial secretary was the initial collector of a direct collection on Report of Monies Collected form 731659.

Deposits not made within 5 business days result in delays in recordkeeping and increased risk of misappropriated funds.

The financial secretary should not be the initial collector of monies to ensure proper segregation of duties. Monetary gifts of $500 or more require School Board approval to ensure all gifts are consistent with the District’s goals and mission.

We recommend that the following be adhered to without exception:

The State of Florida Department of Education Redbook Chapter Eight Section III-1.4(c) states that “funds collected must be deposited within five (5) working days after receipt.”

The Internal Accounts Manual states that “direct collections should be receipted by someone other than the financial secretary…Once receipted, the issuer of the official receipt gives the financial secretary the completed official receipt and the money” (1.122).

The manual further states that “monetary gifts of $500.00 or more are subject to School Board approval” (1.003).

Response:

Deposit 101529843

• As the principal of Caldwell

Elementary, the financial secretary and I have reviewed the DOE Redbook Chapter Eight Section III-1.4 (c). In the case of Deposit 101529843 (Official Receipt 262605), we did not receive the check presented by PTA until a date later than 11/17/12. The check was placed in the safe/vault and deposited with other collected checks. We did not adhere to the 5 day policy even though the check was received later than the date (11/17/12). We will adhere to the 5 days once received deposit requirements.

• The financial secretary received the checks (not cash) in the mail;

therefore she signed the Monies Collected Form. The principal or designee other than the financial secretary will now receive direct collections and sign the Monies Collected Form.

• I, the principal, unintentionally failed to complete the request for Board Approval on the donation of $2,500.

All monies of $500 or more will be submitted for Board Approval. This will not happen again.

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: CALDWELL ELEMENTARY – CONTINUED

High 1 Deposits - continued

Deposit 101575558

• The financial secretary received the checks (not cash) in the mail;

therefore she signed the monies collected form. The principal or designee other than the financial secretary will now receive direct collections and sign the Monies Collected Form.

10/25/2013

Deron Williams

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: CHURCHWELL ELEMENTARY

Deposit 101580755:

• Report of Monies Collected form

743265 had a teacher/sponsor monies received date of 5/20/2013 and a principal/secretary signature date of 5/22/2013.

Failure to remit funds collected to the financial secretary on a daily basis for review and deposit could result in untimely deposits and/or misappropriation of funds due to theft or loss.

The Internal Accounts Manual states that “insofar as is practicable, all money should be collected in the school office. Collections made outside of the school office, must be turned in to the school office daily” (1.009 (2)).

Response: Having two secretaries at the end of the year is very hard, will try to make a schedule for teachers to bring up their field trip money and fundraiser money at a certain time of the day.

Estimated Completion Date:

Spring of 2014

Principal Responsible:

Betty Fitzgerald

Moderate 2 Fund Raising Activity

The Financial Report for Fund Raising Activity (Form 829) was completed but not signed and dated by the principal for the 3rd grade Amazon bracelet fund raiser.

Therefore, appropriate review of the fund raising results and timeliness of submission of this report could not be verified.

Without the proper controls surrounding fund raising activity, cash collections and items to be sold could be misappropriated.

We recommend that the Financial Report for Fund Raising Activity (Form 829) be filed with the principal’s office within 10 days after the close of each fund raising activity, as required by Internal Accounts Manual Appendix D, Section B (10).

Response: That was an overlook, will double check all paperwork.

Estimated Completion Date:

10/15/2013

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: CHURCHWELL ELEMENTARY – CONTINUED

Moderate 3 Purchasing Card

Purchasing Card Reports (January):

One purchase was supported by a summary charge slip that was not itemized (Math Olympiads). As such, we were unable to determine the specific purchases made and whether sales tax was properly included or excluded from payment.

Missing and/or insufficient supporting

“any time a purchase is made that will be paid using the Purchasing Card, the Cardholder/card user is to obtain a customer copy of the charge slip, which will become the accountable document” (Section 10.1). The charge slips should include an itemized list of individual purchases and are necessary to reconcile purchases to the statement. We

Response: Teacher did not get the correct information, will make sure everyone is aware of this from this point on.

Estimated Completion Date:

10/15/2014

Principal Responsible:

Betty Fitzgerald

Low 4 Pre-Numbered Documents

Report of Monies Collected Form 743276 could not be located or was voided, and not all copies were submitted to Internal Accounts. The School provided an explanation of the missing documentation.

Missing supporting documentation could result in misappropriation of funds.

We recommend that all Reports of Monies Collected be voided in accordance with the Internal Accounts Manual guidelines as follows: “If it should be necessary to void a Report of Monies Collected for any reason, all copies of the voided report should be immediately turned in to the Internal Accounts Department” (Section 1.121(4)).

Response: This was the first time this has happened and will try our hardest so that this will never happen again.

Estimated Completion Date:

10/15/2014

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: CLEVELAND COURT ELEMENTARY

Deposit 101529875:

702169 had a teacher/sponsor monies received date of 12/19/2012 and a

12/21/2012.

Deposit 101583059:

• The initial collector of a direct collection did not sign off on Official Receipt 289792, only the bookkeeper.

• Funds collected on 6/7/2013 were not deposited at the bank until 6/18/2013.

review and deposit could result in untimely deposits and/or misappropriation of funds due to theft or loss. Deposits not made within 5 business days result in inaccurate records and could be the result of misappropriated funds. Improper completion of documentation could result in

The Internal Accounts Manual states that, “insofar as is practicable, all money should be collected in the school office. Collections made outside of the school office, must be turned in to the school office daily” (1.009 (2)). The manual further states that, “direct collections should be receipted by someone other than the financial secretary” (1.122(3)).

The State of Florida Department of Education Redbook Chapter Eight Section III-1.4(c) states that “funds collected must be deposited within five (5) working days after receipt.”

• This was an error on the part of the financial secretary. The incorrect date was posted.

• This will be corrected for all future monies collected forms.

• This was an error on the part of the financial secretary. This was the end of the school year. It will be corrected.

9/9/13

Dan Lunn

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: CLEVELAND COURT ELEMENTARY – CONTINUED

Moderate 2 Purchasing Card

The purchasing card log for October 2012 did not include the card users’ signatures.

Each card user must sign the purchasing card log to document their custody over the card and responsibility for its proper use.

The Purchasing Card Procedures state that:

“When authorizing others to use the Purchasing Card, a log shall be maintained by the Cardholder to serve as a permanent record of all card users’ activity. This document shall include the current date, card users name, merchants name, date card is issued and returned, need for card and signature of card user” (Section 9.2).

We recommend that each time the card is given to a card user an entry is made on the log that will include all required information, including both card user name and signature.

Response: This has been corrected. All users will now sign when they use the card.

Estimated Completion Date:

9/9/2013

Principal Responsible:

Dan Lunn

Low 3 Pre-Numbered Documents

Report of Monies Collected Form 702185 could not be located or was voided, and not all copies were submitted to Internal Accounts. The School provided an explanation of the missing documentation.

Internal Accounts Manual guidelines as follows: “If it should be necessary to void a Report of Monies Collected for any reason, all copies of the voided report should be

Response: The financial secretary moved offices. During the move, this form was lost. She has taken responsibility for this. Since no more moves will take place, this problem should not occur in the future.

Estimated Completion Date:

9/9/2013

Dan Lunn

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: DUNDEE ELEMENTARY

(2011)

Deposit 101513666:

• The Deposit Report was not submitted at least weekly to the district. The Deposit Report was prepared by the school on 8/31/2012; however, it was not received by the district until 10/12/2012.

• Cash or check was not listed for all amounts collected on the attached Report of Monies Collected forms or Official Receipts. We were therefore unable to verify the accuracy of the cash amount listed on the deposit slip.

• The total funds collected listed on Report of Monies Collected Form 668196 was $75 higher than the total deposit amount on the deposit slip and bank statement.

Deposit 101518584:

at least weekly to the district. The Deposit Report was prepared by the school on 10/6/2012; however, it was not received by the district until 11/7/2012.

• Funds collected on 10/7/2012 were not deposited at the bank until 10/16/2012 (Official Receipt 245689).

• Report of Monies Collected form 728505 had a teacher/sponsor monies received date of 10/5/2012 and a

10/7/2012.

The Internal Accounts Manual states that “Deposit Reports must, as a minimum, be submitted on a weekly basis” (1.125(3)).

The Internal Accounts Manual also states that the Report of Monies Collected form “provides for a listing of the students’ names, the purpose for which the money is being collected, the account to be credited, the amount collected and the indication of cash or check” (1.121).

The Internal Accounts Manual states that “all deposits must equal the total amount of money taken in and recorded on receipts for the period covered by the deposit” (1.009(4)). Additionally, we recommend that the financial secretary verify that all monies received per the Report of Monies Collected Forms are accurately listed on the deposit slip.

The State of Florida Department of Education Redbook Chapter Eight Section III-1.4(c) states that “funds collected must be deposited within five (5) working days after receipt.”

Response: 2011 was the financial secretaries 1st year as financial secretary, and the then Principal Mrs. Jones had retired and for the entire summer the school was without a Principal. With our school not having an administrator during the summer of 2011, the financial secretary was unable to attend training.

Therefore, she relied on the information the previous secretary left her; which, she learned was outdated.

She has since attended training and spoken with the Internal Accounts department at length and is now aware of the responsibilities and requirements of dealing with the collection and distribution of funds within Polk County Schools.

Because of the lack of training during the time of transition to a new Principal the financial secretary erroneously used cash when refunding a parent. She has since been trained appropriately and understands that refunds must be made by check.

Estimated Completion Date:

Immediately

Principal Responsible: Kim VanHook

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: DUNDEE ELEMENTARY - CONTINUED

High 1 Deposits - continued

Failure to remit Deposit Report to the district weekly could result in untimely entries and postings. Without a complete listing of amounts collected by individual and an indication of cash or check for each amount collected, it cannot be verified whether monies collected are being deposited intact.

Inaccuracy of monies collected could result in misappropriation of funds. Deposits not made within 5 business days result in delays in recordkeeping and increased risk of misappropriated funds. Failure to remit funds collected to the financial secretary on a daily basis for review and deposit could result in untimely deposits and/or misappropriation of funds due to theft or loss.

The Internal Accounts Manual states that, “insofar as is practicable, all money should be collected in the school office. Collections made outside of the school office, must be

High 2 Contracts

The yearbook contract was not signed by a school representative. This contract should have been authorized by the principal.

Purchase commitments that do not have proper approval prior to the purchase could result in overspending of the budget or misappropriations of funds.

The Internal Accounts Manual states that authority shall be delegated only to school principals to enter into certain contractual agreements, including school pictures, printing newsletters, yearbooks, etc. (1.013)

Response: The contract for the yearbook was a revolving contract and Lifetouch used the signature on file instead of a “wet” signature. I have spoken with Lifetouch and they are aware, as are the staff in the office that all contracts need a live signature on them.

Estimated Completion Date:

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: DUNDEE ELEMENTARY - CONTINUED

Low 3 Sales Tax noted that two purchases made by purchasing card in June 2013 inappropriately included sales tax (DARN Grills and Wal-Mart purchases).

payment of sales tax is that all expenditures from Internal Accounts are exempt from sales tax which are made for customary instructional activities and which do not represent expenditures for items for resale to individuals, including the general public.”

Response: Both companies have been contacted about refunding the taxes paid.

In the future, we will ensure that the tax-exempt forms/cards are taken to each vendor.

Estimated Completion Date:

Low 4 Pre-Numbered Documents

(2011)

Report of Monies Collected Form 728541 could not be located or was voided, and not all copies were submitted to Internal Accounts. The School identified this missing form on their Annual Form Inventory and provided an explanation of the missing documentation.

Internal Accounts Manual guidelines as follows: “If it should be necessary to void a Report of Monies Collected for any reason, all copies of the voided report should be

Response: Teachers were given forms to collect field trip monies, a new teacher made incorrect entries on her form and threw it away. I have since trained the teachers as to how to complete and handle these forms.

Estimated Completion Date:

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: EASTSIDE ELEMENTARY

Deposit 101536250:

• Cash or check was not listed for all amounts collected on the attached Report of Monies Collected forms or Official Receipts. We were therefore unable to verify the accuracy of the cash amount listed on the deposit slip.

Deposit 101535465:

681307 had a teacher/sponsor monies received date of 11/14/2012 and a

2/14/2013.

Without a complete listing of amounts collected by individual and an indication of cash or check for each amount collected, it cannot be verified whether monies collected are being deposited intact. Failure to remit funds collected to the financial secretary on a daily basis for review and deposit could result in untimely deposits and/or misappropriation of funds due to theft or loss.

The Internal Accounts Manual states that the Report of Monies Collected form “provides for a listing of the students’ names, the purpose for which the money is being collected, the account to be credited, the amount collected and the indication of cash or check” (1.121).

The Internal Accounts Manual also states that, “insofar as is practicable, all money should be collected in the school office.

Collections made outside of the school office, must be turned in to the school office daily” (1.009 (2)).

Due to use of old Monies Collected form (No: 681339) there was no delineation between cash or checks. By using the new Monies Collected form we will delineate cash or checks collected.

A plastic bag was hidden under envelopes in the safe with checks, cash & a Report of Monies collected form. It was immediately deposited once found on 02/14/13. We will check the safe thoroughly.

Estimated Completion Date:

10/11/13

Johna Jozwiak

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: EASTSIDE ELEMENTARY - CONTINUED

High 2 Fund Raising Activity

The Fund Raising Activity Approval Form (Form 828) was not approved prior to the start of the tag art fund raiser. Also, the form was not fully completed and was lacking the amount of projected income.

The Financial Report for Fund Raising Activity (Form 829) was submitted prior to the close of the tag art fund raiser. The fund raiser was held from August 2012 through 10/5/2012 and the report was approved by the principal on 10/4/2012.

Also, the form was not fully completed and did not contain the financial results of the fund raiser or comparison of results to projection figures.

Without the proper controls surrounding

We recommend that the Fund Raising Activity Approval Form (Form 828) be completed prior to each fund raiser to document approval of the fund raising activity, as required by Internal Accounts Manual Appendix D, Section B (3).

We also recommend that the Financial Report for Fund Raising Activity (Form 829) be fully completed and filed with the principal’s office within 10 days after the close of each fund raising activity, as required by Internal Accounts Manual

• I understand now that Tag Art needs approved before the event and will complete the paperwork before approval.

• The projected donations and actual donations have been written on the Financial Report and all paperwork will be completed and filled out accordingly.

10/11/13

Principal Responsible:

Purchasing Card Report (November):

The purchase report was not timely submitted to the District Internal Accounts office. The purchase report was not prepared until 1/16/2013, which is outside the required timeframe for submission to the district.

Delays in the reporting process could be the purchasing card purchase report and all attachments should be forwarded to the Accounting department within two working days after receipt (Section 10.3.3). We

• Adherence to all purchasing card procedures and timelines will be followed.

10/11/13

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: FROSTPROOF ELEMENTARY

Moderate 1 Fund Raising Activity

(2012)

Activity (Form 829) was not submitted within ten days of the close of the computers for education fund raiser, as required by policy.

The fund raiser was held from 9/10/2012 through 9/21/2012 and the report was approved by the principal on 12/5/2012.

Without the proper controls surrounding with the principal’s office within 10 days after the close of each fund raising activity, Response: The fund raiser ran from 9/10/12-9/21/2012 and the check from Computers in Education was delayed causing the financial report to not be completed until 12/5/12. We will continue to monitor all fundraising activities to ensure the financial report is completed within 10 days after the close of the fundraising activity.

Estimated Completion Date:

10/10/13

Dart Meyers

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: GARNER ELEMENTARY

Moderate 1 Deposits

Deposit 101537411:

amounts collected on the attached Report of Monies Collected forms or Official Receipts. We were therefore

Deposit 101554487:

amounts collected on the attached Report of Monies Collected forms or Official Receipts. We were therefore

Without a listing of cash or check for each amount collected, it cannot be verified whether monies collected are being deposited intact.

The Internal Accounts Manual states that the Report of Monies Collected form “provides for a listing of the students’ names, the purpose for which the money is being collected, the account to be credited, Response: Deposit 101537411 In the past, the secretary listed the amount of currency was cash and the itemized list of checks and their amounts on the deposit slip. Also, copies of checks were submitted with the report. We have met about the new procedures require us to write “cash” or “check” on the Official Receipt and not make copies.

Deposit 101554487 In the past, the media specialist had been informed for Book Fair to write the total amount collected for the day and itemize collection on deposit slip.

The media specialist and I have met about the proper procedure for completing the Total Amount Collected sheet for Book Fair.

Estimated Completion Date:

10/08/13

Thaddeus L. Davis

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: GARNER ELEMENTARY - CONTINUED

The purchasing card log for January 2013

Each card user must sign the purchasing card log to document their custody over the card and responsibility for its proper use.

The Purchasing Card Procedures state that:

“When authorizing others to use the Purchasing Card, a log shall be maintained by the Cardholder to serve as a permanent record of all card users’ activity. This document shall include the current date, card users name, merchants name, date card is issued and returned, need for card and signature of card user” (Section 9.2).

We recommend that each time the card is given to a card user an entry is made on the log that will include all required information, Response: The teacher who checked out the P-card signature was not legible.

The secretary wrote that teacher’s name on the Report form. The secretary has been advised not to write persons’ names on the Report form even if the signature is illegible.

Estimated Completion Date:

10/08/13

Thaddeus L. Davis

THE SCHOOL BOARD OF POLK COUNTY INTERNAL ACCOUNTS

SCHOOL: GIBBONS STREET ELEMENTARY

Deposit 101507539:

721735 had a teacher/sponsor monies received date of 8/31/2012 and a

9/10/2012.

review and deposit could result in untimely deposits and/or misappropriation of funds due to theft or loss.

The Internal Accounts Manual states that, “insofar as is practicable, all money should be collected in the school office. Collections made outside of the school office, must be

Response: In response to the Report of Monies Collected form #721735, the form and monies were submitted to the front office on 8/31/12; however, a second party did not sign the form due to the financial secretary being out sick from 8/31/12-9/07/12.