Purpose of Audit

The purpose of our audit was to examine the School’s purchasing process for the period July 1, 2011, through July 12, 2013.

Background

The King Center Charter School was established in 2000 as the first charter school to open in the City of Buffalo. The School is governed by a Board of Trustees which has 12 members, including two parent representatives. The School’s 2013-14 fiscal year budgeted operating expenses total approximately $3.7 million.

Key Findings

• We found that the School’s purchasing policy does not provide appropriate guidance as to when written or verbal price quotes should be obtained and when items must be competitively bid. The policy also does not address threshold amounts under which approval can be made by management, versus large purchases that would require Board approval.
• Although the policy requires the use of purchase orders, School officials are not routinely using them to initiate the acquisition of goods and/or services.
• School officials often did not properly document verbal or written price quotations when making purchase decisions. For example, School officials spent $11,346 on computers but did not have adequate documentation to demonstrate that the lowest price was obtained.
• We reviewed 12 disbursements associated with three capital projects that totaled approximately $1.3 million. We found that one of the three project contracts was not properly approved by the Board and there is no evidence that change orders totaling approximately $63,000 were approved by the Board.

Key Recommendations

• Adopt a more comprehensive purchasing policy to provide detailed guidance for School officials and employees.
• Ensure that School officials use purchase orders as required.
• Ensure that School officials obtain verbal or written price quotes, when applicable, before procuring goods and/or services and maintain such documentation.
• Approve all contracts including any amendments or change orders and document such action in the minutes of its proceedings.