Purpose of Audit

The purpose of our audit was to examine the School’s internal controls over credit and debit card use for the period July 1, 2011, to August 16, 2013.

Background

The Tapestry Charter School, located in the City of Buffalo, Erie County, is governed by a Board of Trustees that currently has 11 members, including two parent representatives. The School’s operating expenses for the 2012-13 fiscal year were approximately $10 million.

Key Findings

• While the School’s credit card policy adequately addresses many control procedures, certain additional controls should be considered. The policy does not define how many credit card accounts may be established, limit the number of credit cards to be issued, and address to whom the cards may be issued. The policy also does not define credit limits. We also found that the School did not ensure that all employees who were issued a credit card signed the policy to acknowledge their awareness of the procedures, as required by the policy. We found that, of the 12 employees issued credit cards, only seven had signed a copy of the policy. In addition, School officials did not ensure that credit card accounts were established in a manner that complied with the policy provision prohibiting cash advances.
• The School has a debit card policy, which provides appropriate guidance regarding proper usage and pre-approval requirements.

Key Recommendations

• Amend the credit card policy to address the number of credit card accounts and cards to be maintained, issuance criteria, and applicable credit limits. Ensure that all employees issued credit cards sign the policy to acknowledge their responsibilities with respect to card use. Ensure that credit card accounts do not allow cash advances.
• Give strong consideration to ending the use of debit cards. If using debit cards is to continue, impose appropriate restrictions and notification controls to provide greater assurance that School funds are not exposed to substantial loss.