Purpose of Audit

The purpose of our audit was to examine the School’s financial operations for the period July 1, 2011 through January 31, 2013.

Background

The Roosevelt Charter School is located in Nassau County. Oversight of School operations is provided by the Board of Trustees which includes six members including the Board Chairman. The School’s 2011-12 fiscal year operating expenses were approximately $8.2 million.

Key Findings

• The Board did not adopt realistic budgets or routinely monitor financial operations. School officials created an expenditure code entitled “building fund” and budgeted $4.8 million in the 2010-11 fiscal year, $5.2 million in 2011-12, and $2.6 million in 2012-13 even though School officials had no expectation of any outflow of cash for such expenses.
• The Board is not monitoring the annual budget and has not established a Budget and Finance Committee as required by School by-laws.
• The School also paid for Board member expenditures that were not authorized by the School by-laws or policy. Of $31,630 in Board expenditures, $26,444 was not authorized.
• The School paid four vendors a total of $521,197 for significant public work and purchase contracts without fair competition, did not seek competitive price quotes when procuring goods and services totaling $16,028, and engaged six professional service providers, paid a total of $478,264, without soliciting competition. The School paid an information technology consultant $118,182 more than the agreement provided, and did not have an applicable agreement for paying $25,713 for security services.

Key Recommendations

• Ensure that appropriations are incorporated in the budget only when there is an anticipated outflow of cash for goods or services. Request interim financial reports from the Director of Finance for use in monitoring the School’s financial operations and developing realistic budgets.
• Establish a Budget and Finance Committee as required by the School by-laws.
• Comply with the School by-laws and policies regarding reimbursement of expenditures incurred by the Board members to attend special meetings.
• Consider amending the procurement policy to require that competition is sought when procuring goods and services, including professional services.
• Enter into written agreements with all professional service providers and School officials should adhere to the Board-authorized agreements