Although a few issues were noted, a review of the Rome school district’s internal financial controls and risks shows an essentially “clean report,” says an official of the company that prepared the document.
The district has “good controls and practices....good overall system of checks and balances,” with six financial categories at “low” risk levels and three at “moderate,” James M. Buffum of EFPR Group told the Board of Education’s finance committee this week.
In addition to the overall “internal control risk assessment” document, the board next will be selecting a specific “focus area” category to undergo a more detailed study by EFPR.
The school district since the 2016-17 year has used EFPR as its internal auditor, including an annual updating of the risk assessment document, the latest report said.
Buffum referred to “no really significant changes” in the review for 2018-19. Among areas with “moderate” risk levels, the category for capital assets/projects and indebtedness was changed after previously having a “low” risk level. But Buffum said that whenever there’s a change in procedures or personnel, it “temporarily increases risk;” the school district’s capital projects are being overseen by new architectural and construction management services, plus the district has a new director of facilities.
Buffum said “we expect that to drop back down” to the prior rating after the director has had “a year to get under his belt.”
Continuing to receive a “moderate” risk rating was the category for purchasing, claims, accounts payable, and cash disbursements.
The report said the school district treasurer’s involvement and approval in issuing checks should be documented, and checks involving worker’s compensation payments should be reviewed by the internal claims auditor.
For the other category that maintained a “moderate” risk rating, involving payroll and personnel, Buffum explained the category features “so many transactions....The risk is inherently higher” and “never gets low.”
Among categories that continued to receive “low” risk ratings, the report said that for accounting, reporting and information technology the district should evaluate whether credentials for some financial accounting system user accounts need to remain active. This is “not to say...not appropriate,” said Buffum, but “too many accounts with privileges” that are not all utilized can raise potential risks.
For another continuing “low” risk category involving food service, the report called for a specific budget code to record and track vending machine revenue. This would be “for oversight,” commented Buffum, who observed there were no reports of problems with the revenue.
Categories that continued to be assessed at “low” risk with no comments or changes suggested include governance/budgeting; cash receipts and revenues; transportation; extra-classroom activity fund.
The risk assessment report is part of the “Five-Point School Financial Accountability Plan” that was developed by the state Comptroller’s Office and the state Education Department in 2005 to promote stronger internal controls. It can help the school district select specific control categories to examine in more detail, also required by the five-point plan.