School officials confident in audit response

Penn Yan Central School Assistant Superintendent for Business Doug Tomandl says although a report from the Office of the State Comptroller (OSC) doesn’t appear to cast a favorable light on some practices at the school, the result of the audit is positive.
Tomandl and Superintendent Ann Orman met with the school district’s audit committee last week to review the district’s response to the findings from the August 2009 visit from an OSC examiner.

Tomandl said the visit, which came a little more than a month after he started his employment with the school district, happened at the right time. The visit was a follow-up to a 2006 audit by OSC staff. In 2006, the examiners found seven areas where the district needed to correct some issues, including: Board oversight of budget transfers, procurement policy oversight, management of credit card use, reporting by the claims auditor, establishing a capital asset inventory record, and compile a physical inventory, and  carry out periodic inventories.

During the August 2009 visit, although improvements had been made in some of the areas, the progress was not sufficient to be recognized as the school having implemented corrective actions.
Tomandl says that was the only surprise from the most recent visit — that although the examiner noted some areas were partially implemented, new guidelines at the OSC had raised the threshold for declaring that an issue had been corrected.

The school district has prepared a corrective action for each of the seven areas which Tomandl feels will meet the recommendations from the OSC.

In fact, he’s confident that four of the seven areas are now in complete compliance: budget transfers, procurement policies, credit card use and the claims auditor report.

“I feel that we have completely implemented all the budget transfer issues,” said Tomandl, explaining much of the work he did upon starting work at the district was dealing with negative balance issues within the budget.

He says new software is helping to manage the budget better, and some purchases have been put on hold, but he stresses there was never a time when money was not available in the general fund to make a purchase.

The problems highlighted by the auditor occurred when expenditures were charged to budget codes before the school board took action to transfer money into that code.
The new software prevents appropriations that would put an account in the negative.
“At no time was any expense not justified,” said Tomandl.

The procurement policy now includes a three point check for all expenditures. Previously, there wasn’t evidence that district staff were following the policy. Tomandl says since a new system was put into place there have been no negative account balances.
The district has also adopted a new credit card policy that requires prior authorization for expenses up to a specific amount.

In the past, the claims auditor provided a quarterly report to be distributed to the board of eduction, but did not actually make a presentation to the board of education, so the report was not noted in the meeting minutes. Now, the reports, which include more details, are presented to the board quarterly. The last report was given on Jan. 13.
The areas that are not in compliance yet, but will be soon all have to do with the district’s inventory.

Although a complete assets inventory was done in 2006, it was not properly updated. Now, with some additional business office staff on board and a new plan, Tomandl says the district will correct this area as well.

The audit committee is recommending a district-wide inventory be completed in March at a cost of about $7,000. Then the inventory of fixed assets will be maintained by the district treasurer.
Teachers and other staff will be responsible for taking inventories at the beginning and the end of each school year. The inventory will be maintained by the treasurer.

Tomandl says the three audit issues connected to the inventory should be completely resolved by the end of this school year.

Reflecting on the outcome of the audit, Tomandl said other school districts have had more serious issues. “We were not misusing taxpayer money in reserves. The board didn’t fail to do anything,” he said, adding, “I thought this was a great review. We take it very seriously to make sure that all the recommendations are implemented. That’s why I want them to come back.”
After the board of education reviews and approves the corrective action, it will be forwarded to the OSC.

Members of the board’s audit committee are President Jeff Morehouse, Anita Maroscher, Ryan Hallings, Loni Terpolilli and community member Bonnie Jaracke, who is a principal with a Rochester accounting firm.