Members Present:Tom Burnell, Elissa Cascio, Paul Slayton

Audit Committee

1/5/07

12:00 PM

Members Present:Tom Burnell, Elissa Cascio, Paul Slayton

Members Absent:Jeff Weichsel

Items Discussed

• Tom reviewed status of work of Internal Auditor (Nugent and Haussler) on start of risk assessment. Nugent and Haussler representative should be available to meet with Audit Committee in late February with initial report and to establish a plan for moving forward with their Audit Plan.

• Reviewed External Auditor’s (Ray Preusser) Management Letter from 9/06, and discussed status of all recommendations to date:

1. Bank Reconciliation Procedures

Recommendation: A review of bank reconciliations should be completed to improve controls over cash. Checks received in the mail need to be restrictively endorsed when the mail is opened, and a log needs to be maintained to record all receipts. Further recommendation regarding the division of duties was made regarding bank reconciliations and cash receipts and disbursement functions.

Status: Tom now completes a review of all bank reconciliations and signs off on them and dates them. Tom’s Assistant, Donna, now opens all checks received via mail, and has created a new process of logging in all checks received and immediately restrictively endorsing them for deposit. Tom is awaiting a recommendation from Nugent and Haussler regarding a further division of duties.

2. Documentation of Invoice Processing

Recommendation: Improve reliance and accuracy of Claims Auditor function with respect to purchasing (i.e., signatures necessary to indicate actual receipt of products purchased prior to releasing checks for payment, conference approval documentation according to regulations, etc.)

Status: Claims Auditor was brought in to review findings of tests of his work, and has been working to improve accuracy. Further discussion ensued regarding our desire to invite our Claims Auditor to one of our next Audit Committee meetings so we can meet him and discuss our interest in a regular report from him directly to the Board on his work and his findings.

3. Fixed Assets

Recommendation: The District is to conduct an annual physical inspection of our asset inventory in order to strengthen the interval control over inventory and also for proper insurance coverage.

Status: This will be scheduled upon final completion of capital project. Initial estimates indicate it will cost $11K, which was not budgeted. The Board can expect a budget transfer for this project. The last physical asset inventory was completed in June 2005. Tom informed us that Michelle Raimondi does have in place a computer hardware and software inventory tracking system. He further informed us that he has been discussing with Marvin their plans to have a textbook and curriculum material physical inventory completed this summer, 2007.

4. School Lunch Fund

Recommendation: The District is urged to monitor the revenues and expenditures closely to eventually eliminate the deficit in this Fund. The District is also to establish a plan to eliminate the interfund payable to the General Fund.

Status: Tom informed us that at the end of January 2007 a complete inventory will be done of food products and an Actual Profit and Loss will be completed for this program. By mid-February, the Board will receive the P&L and Tom will discuss with us the current financial status of the School Lunch Fund. Further discussion occurred regarding the history of the District’s Lunch Program, our interest in the trends of participation, employee salaries, and other factors that impact the quality of the Program as well as the financials.

5. Fraud Policy

Recommendation: The Board needs to develop and adopt a fraud policy.

Status: The Board Policy Committee developed a fraud policy that was adopted by the Board in December 2006.

6. Salary Certification

Recommendation: Identify a responsible employee or supervisor to monthly sign a certification attesting to the salaries and wages charged to each federal grant award.

Status: Tom is working with Ray Preusser’s office to identify required documentation, and establish procedures for compliance for each of our federal grant award programs.

7. Code of Ethics

Recommendation: Post Code of Ethics in each building of the district, and distribute to all new offices and employees.

Status: Tom reported that the Code of Ethics was distributed to all employees in one of the October paychecks, and has been posted in all three school buildings. Tom further reports that he has begun work on an Employee Handbook that, when completed, will be provided to all existing employees as well as all future new hires. The Code of Ethics will be but one section of this future Handbook. Further discussion ensued about other aspects of this Employee Handbook.

• Non Board member members of the Audit Committee

Plan to discuss at our April meeting.

Initial thought is to develop a plan, present to the Board later in the Spring, and implement at the start of 07/08 school year.

• Meeting Schedule

Plan to meet at least monthly, and more often as needed with the following agenda items:

Early February (2/2/07, noon, Tom’s office) – Roles and Deliverables of Audit Committee for the remainder of this school year.

Late February (Date contingent upon availability of Internal Auditor) – Initial meeting to review preliminary report from risk assessment.

March (3/2/07, noon, Tom’s office) – Invite Tom Cincotta, Internal Claims Auditor; Discuss thoughts on our recommendation to full Board on Internal and External Auditor appointments and potential RFP process for appointments for 07/08 school year.

April (3/13/07, noon, Tom’s office) – Non Board member Audit Committee members discussion.

• Audit Committee Goals (January – June ’07)

See agenda items for February – April, and others, as necessary.

Respectfully submitted by E. Cascio