Purpose of Audit

The purpose of our audit was to review internal controls over cash disbursements for the period July 1, 2013 through October 31, 2014.

Background

The Discovery Charter School is located in the Town of Greece in Monroe County and is governed by a nine-member Board of Trustees. The District operates one school with 214 students. The School’s operating expenses totaled approximately $3.1 million for the 2013–14 school year.

Key Findings

• When the third-party payroll services vendor finalizes the payroll, it directly withdraws the money from the School’s bank account for disbursement to employees, the respective taxing authorities and its own fees.
• The Business Manager enters most adjusting journal entries and no one regularly reviews them.

Key Recommendations

• Work with the vendor to arrange for payroll checks to clear against the School’s bank account and pay the payroll service fee to the vendor by check using their regular bill-paying process.
• Periodically review the journal entries completed by the Business Manager.