Purpose of Audit

The purpose of our audit was to examine purchases from selected vendors for the period July 1, 2010, to December 31, 2012, and the student enrollment and billing processes for the period July 1, 2011, to June 30, 2012.

Background

The Syracuse Academy of Science Charter School is located in the City of Syracuse in Onondaga County. It is governed by a Board of Trustees that has five members. The School’s 2011-12 fiscal year operating budget expenses totaled approximately $7 million.

Key Findings

• School officials routinely purchased school equipment and furnishings from a limited group of four vendors that were affiliated with one another. The required number of quotes was not always obtained, quotes were sometimes dated after the purchase was made, officials did not document verbal quotes, and officials received quotes for equipment and furnishings from vendors that did not specialize in such items. As a result, we question the prudence of $383,390 in purchases which likely could have been obtained at lower prices.
• Some of the purchased items were resold to the School after an affiliated vendor purchased the items online and marked up the price. Had School officials purchased these items either directly from the original vendor or through State contract, they could have saved $5,220 on total purchases of $54,940.
• The Director of Operations does not ensure all student information is recorded accurately prior to billing their school districts, and does not verify the accuracy of the year-end reconciliation of the School’s student information system with billings, which should identify any moneys that the School owes to the resident districts (over-billings) or vice versa (under-billings).

Key Recommendations

• Ensure that, when multiple quotes are obtained, they are from companies that are not affiliated and that are primarily in the business of providing the type of goods/services that the School is purchasing. Ensure that quotes are properly documented.
• Purchase goods directly from qualified vendors rather than from one who is buying the items from another vendor and reselling them at a markup.
• Review the final billing reconciliation and compare the listings to the billing spreadsheets to determine whether all eligible students are billed and that ineligible students are not billed.