Review of. Freedom Shores Elementary Parent-Teacher Association's Bank Accounts

Transcription

1 Review of Freedom Shores Elementary Parent-Teacher Association's Bank Accounts December 7, 2007 Report

2 Review of Freedom Shores Elementary Parent-Teacher Association's Bank Accounts Table of Contents Page PURPOSE AND AUTHORITY 1 SCOPE AND METHODOLOGY 1 BACKGROUND 2 CONCLUSIONS 3 Support for Expenses Not Available 3 Improper Check Cards 3

3 THE SCHOOL DISTRICT OF LUNG CHIU, CPA ARTHUR C. JOHNSON, Ph.D. PALM BEACH COUNTY, FLORIDA DISTRICT AUDITOR SUPERINTENDENT OFFICE OF THE DISTRICT AUDITOR 3346 FOREST HILL BLVD., B-302 WEST PALM BEACH, FL (561) FAX: (561) M E M O R A N D U M TO: FROM: Honorable Chair and Members of the School Board Arthur C. Johnson, Superintendent of Schools Chair and Members of the Audit Committee Lung Chiu, CPA, District Auditor DATE: December 7, 2007 SUBJECT: Review of Freedom Shores Elementary Parent-Teacher Association's Bank Accounts PURPOSE AND AUTHORITY In response to the request of School Police Department, we have reviewed the financial records of Freedom Shores Elementary Parent-Teacher Association (PTA) for July 1, 2005, through June 30, The primary objective of the review was to determine if expenditures incurred by the PTA were proper. SCOPE AND METHODOLOGY The review was performed by Susan Miller, CIA, and included reviewing of: The PTA's Bylaws and correspondence. Bank statements and cancelled checks for the PTA's checking account. Receipts and invoices for expenditures. Draft findings were sent to the school for review. The final draft report was presented to the Audit Committee at its December 7, 2007, meeting. 1

4 BACKGROUND Complaint Filed by the New PTA Board. Freedom Shores Elementary PTA maintained its funds and financial records outside the school's Internal Funds. A new Board of Directors was installed during School Year On May 11, 2007, the new board filed a complaint with School Police Department that alleged the former Board's mismanagement and unauthorized use of PTA funds. On May 23, 2007, School Police completed its review and concluded that "There is no evidence to support any criminal violations, and the recovery of PTA funds from certain individuals is civil in nature and therefore should be handled civilly." Subsequently, on August 23, 2007, the new board and the school Principal jointly requested an audit of the PTA's financial records for School Year Bank Account Activities During Freedom Shores Elementary PTA had two checking accounts during School Year Based on the records provided by the PTA, as of June 30, 2006, the PTA had a net fund balance of $2, During the year, $64, in funds were deposited, $62, were withdrawn, and $ in bank fees and charges were posted. Summary of Bank Accounts Activities During School Year 2006 Beginning Balance (June 1, 2005) $1, Add Deposits: Gross Deposits $64, Deposit Adjustments (650.20) 64, Total Available Funds $65, Less Withdrawals: Check Withdrawals ($51,243.36) Outstanding Checks (98.06) Cash / ATM Withdrawals (450.00) Card Purchases (10,852.79) Total Withdrawals ($62,644.21) Bank Fees (455.88) (63,100.09) Net Fund Balance (June 30, 2006) $2,

5 CONCLUSIONS Support for Expenses Not Available. Review of the available documentation for expenditures during 2006 found that 83% ($52,831.75) of them did not have support. Consequently, we were unable to determine the appropriateness and legitimacy of these expenses. Another $9, in expenses were supported by receipts and invoices; however, we could not determine if these expenses were approved by the PTA Board since minutes of the Board meetings were not available. Improper Check Cards. Five cash withdrawals, totaling $360, were made through ATM machines, and $10, in purchases were made with check cards for the checking accounts. These check cards allowed card holders to withdraw funds from the PTA's bank account. Allowing individual to withdraw funds through a check card is contrary to Article VII, Section 5 of the PTA's Bylaws, which requires "three signatures should be filed at the bank, with two signatures required on all PTA checks." Summary of Expenditures During School Year 2006 Number of Transactions Total Amount Expenditures Without Supporting Documentation Transactions without supporting documentation 72 $44, Payments to teachers for Tutoring Program with no 78 7, documentation for hours worked Total Expenses Without Supporting Documentation 150 $52, (84%) Expenditures With Supporting Documentation/Explanations Transactions supported by receipts or invoices 75 $9, Bank Fees Total Expenses With Supporting Documentation or Explanations 105 $10, (16%) End of Report 3