Purpose of Audit

The purpose of our audit was to examine the claims auditing process for the period July 1, 2012 through August 31, 2013.

Background

The Hampton Bays Union Free School District is located in the Town of Southampton, Suffolk County. The District is governed by the Board of Education which comprises five elected members. Appropriations budgeted for the 2013-14 fiscal year were approximately $47 million.

Key Finding

• During our audit period, the District paid general fund claims totaling $17,972,830. District officials have established adequate controls over the claims processing function that ensure claims are audited in a timely manner and are properly supported. Even though the claims auditor appeared to be properly auditing claims, the purchasing agent did not always formally approve all purchases prior to ordering goods and services. We selected and reviewed 25 claims, totaling $154,909 to determine if purchase orders were issued prior to the ordering of the goods and services, and if claims were for legitimate District purposes and audited prior to payment. Despite minor deficiencies that were discussed with District officials, the claims we tested did appear to be for proper District purposes and audited prior to payment. However, purchase orders for 10 of the 25 claims totaling $50,859 were confirming purchase orders which were prepared after the invoice was received from the vendor. For example, the District paid a vendor $17,960 on September 7, 2012, for special education services; the vendor’s invoice was dated July 28, 2012 and the purchase order was dated September 5, 2012.

Key Recommendation

• Ensure that purchase orders are prepared and approved in advance of any purchase and limit the use of confirming orders to emergency situations.