Summary

This operational audit for the period July 1, 2004, through June 30, 2005, disclosed the following:

Finding No. 1:         Inventories – Separation of Duties

The District could enhance its internal control over the maintenance, warehouse, and transportation department inventories by adequately separating asset custody and record keeping responsibilities, and limiting access to inventory storage areas.  When such responsibilities are not adequately separated, errors or fraud could occur and not be timely detected.

Finding No. 2:        Cash Controls and Disbursements – Separation of Duties

The District could enhance its internal control over on-line wire transfers and vouchering by adequately separating incompatible duties.  When such duties are not adequately separated, inappropriate transfers and payments could be made and not be timely detected.

Finding No. 3:        Capital Assets – Subsidiary Records

The District did not maintain adequate detailed subsidiary records for its land improvements and buildings and fixed equipment categories.  Additionally, the District did not always properly record and report capital and operating expenditures.

Finding No. 4:        Payments for Accrued Vacation Leave

The District made terminal vacation leave overpayments totaling $3,057 to eight employees for accrued vacation leave in excess of the amounts allowed by Section 1012.65, Florida Statutes.

Finding No. 5:        Overtime Payments

The District’s overtime costs have increased during the last three fiscal years.  However, the District has not conducted a cost-benefit analysis to study possible alternatives to overtime payments.  In addition, the District should enhance its procedures over the monitoring of overtime payments.

Finding No. 6:        Construction Administration – Subcontractor Monitoring

The District’s administration of construction projects could be enhanced by requiring that copies of subcontractor bid tabulations be provided and maintained and that District records evidence verification of appropriate licensure of project subcontractors.

Finding No. 7:        Insurance Commissions

Insurance companies paid a consultant, for the District’s health and employee benefits, and brokers, for the District’s property and casualty insurance, based on a percent of the premium costs paid by the District to the insurance companies.  Considering that the insurance consultant’s and brokers’ fees were based on a percentage of the premium costs, the District may have limited the consultant’s and brokers’ incentive to recommend insurance services at the lowest and best price by not separately establishing a fixed-price contract with the insurance consultant and brokers.

Finding No. 8:        Information Technology – User Application Access Controls

The District needed improvements in its user application access controls.  The District lacked policies and procedures requiring a periodic review by management of the TERMS user access accounts.

Finding No. 9:        Information Technology – Security Controls

Improvements were needed in the District’s information technology security controls.  Specific details of these improvements are not disclosed in this report to avoid any possibility of compromising the District’s information technology resources.

Finding No. 10:      Information Technology – Program Change Controls

The District does not always maintain documentation of user approval for program modifications.  The absence of adequate controls over program modifications increases the risk that erroneous or unauthorized program changes will be placed into the production environment and not be timely detected.

Finding No. 11:      Information Technology – Disaster Preparedness

Improvement was needed in the District’s disaster recovery procedures in that the disaster recovery plan had not been recently tested. 

Finding No. 12:      Charter School Monitoring

Improvements could be made in the District’s monitoring of its charter schools to ensure that monthly financial statements are obtained and that the charter schools provide the required insurance coverage.

Finding No. 13:      Fingerprinting Requirements

The District did not implement the procedures recommended by the Florida Department of Education during the 2004-05 fiscal year for timely obtaining fingerprints and performing the background screenings required by Sections 1012.56(9) and 1012.465, Florida Statutes, for instructional and noninstructional personnel having direct contact with students.

Finding No. 14:      Workforce Education Postsecondary Student Fees

The District transferred from the workforce development program account to its General Fund unrestricted accounts $2,656,153 of workforce education postsecondary student fees contrary to guidance from the Florida Department of Education.

Finding No. 15:      Workforce Education Program Funds – Indirect Costs

The District transferred to its General Fund unrestricted accounts $3,033,923 more than was allowable by law from the workforce development program account for reimbursement of indirect costs.

The Superintendent’s written response to the audit findings and recommendations is included in this report, as Appendix B, on pages 12 through 16.