[read complete report – pdf]

Audit Objective

Determine whether Persistence Preparatory Academy Charter School (School) credit card charges were properly approved, adequately supported and for School purposes.

Key Findings

Credit card charges we reviewed were not properly approved or adequately supported, and nearly all the charges lacked support to show they were for a valid School purpose. When credit card charges are not reviewed in a timely manner or supported, it could result in inappropriate or fraudulent charges or unauthorized payments being unresolved.

• During the 20-month audit period, the School’s credit card transactions totaled $158,065.We reviewed transactions totaling $117,567 and determined that almost 98 percent of them lacked documentation to demonstrate the charge’s necessity or the School-related purpose of the charge. For example, charges totaling $22,276 included grocery, alcohol and restaurant purchases, and food purchases for “going away parties,” a teacher’s bridal shower and staff holiday parties.
• The Board Treasurer did not review credit card charges in a timely manner. The average amount of time between payment and review was 68 days.

Key Recommendation

•  Adopt new, or update existing, policies to address credit card use, including the appropriate documentation to retain and to develop practices for timely review.

School officials generally agreed with our recommendations and have initiated corrective action. See Appendix B for our comment on an issue raised in the School’s response.