Arkport school officials respond to Comptroller's audit
Officials at Arkport Central School have already formed a plan to deal with issues brought up in a recent state audit.
According to a state Comptroller's report issued Dec. 24, auditors said the school should focus on its payroll segregation of duties and information technology.
“Payroll duties are not properly segregated and compensating controls are inadequate,” the report states. “The payroll clerk's responsibilities include adding, deleting and modifying employee information; adding and changing pay rates and salaries; entering hours worked; printing payroll checks containing the treasurer's signature; and distributing paychecks. As a result, the payroll function is at a heightened risk for fraud, abuse, or professional misconduct, and for payroll errors and irregularities to occur and go undetected.”
To correct these problems, the report recommends district managers develop written payroll procedures establishing proper segregation of duties or adequate mitigating controls, including requiring written authorization to be received by the payroll clerk prior to adding, deleting or modifying employee information in financial software; requiring the treasurer to print or oversee printing of checks containing her signature and assign duties related to payroll processing in a manner providing adequate segregation. It also suggests officials ensure personnel files contain all required forms for district employees.
In a response to the audit report, District Superintendent William Locke prepared a corrective action plan for the district, requiring all modifications of employee payroll information be in writing, with copies kept in the employees' personnel folders.
Locke said the check printer will be locked in a room with an alarm and will only be accessible to the treasurer, business manager and payroll clerk. Only the treasurer will authorize and supervise the printing of checks, and the payroll clerk under the supervision of the business manager will authorize them in the treasurer's absence.
Beginning this spring, there will be an audit of the payroll regarding all deductions by the business manager and treasurer.
“The board has not effectively addressed the safeguarding of computer data,” the audit report states. “The board has not adopted comprehensive policies and procedures to address the use of passwords for the financial software. In addition, the current financial software used by the district does not provide basic tools such as exception reports and change reports. Further, the board has not established formal policies and procedures to address disastrous events that may result in the loss of critical functions and/or data. The lack of comprehensive policies and procedures related to information technology puts the district's data, network and applications at risk for damage or loss.”
To address these concerns, the report recommends the board adopt a policy and establish procedures requiring passwords be changed regularly, updating the financial management system and adopting a formal disaster recovery plan, all of which Locke said will be done this school year.