Purpose of Audit

The purpose of our audit was to assess the District’s financial condition and mobile device environment for the period July 1, 2010 through August 22, 2013.

Background

The Frontier Central School District is located in the Towns of Hamburg and Eden in Erie County. The District is governed by an elected seven-member Board of Education. The District’s budgeted appropriations for the 2013-14 fiscal year are $73.2 million.

Key Findings

• The District reported $195,355 of unexpended surplus fund balance remaining as of June 30, 2013. Given the size of the District’s operations this is a dangerously low level.
• Approximately $5.3 million in workers’ compensation reserve funds were inappropriately used to fund other unrelated general fund operating costs.
• The District’s last multiyear financial plan was prepared in June 2012, which included information on past financial trends and projections for revenues and expenditures. The financial plan also included a history of fund balance, which has substantially dwindled over the past six fiscal years.
• District officials did not establish adequate safeguards over mobile devices, and that District employees did not use mobile devices in accordance with the District’s acceptable-use policy. For example, on 23 of the District’s 40 mobile devices we found indications of personal use.
• We found that 25 devices had minimal to no discernible use for District purposes and were used predominantly for personal use, or not at all.

Key Recommendations

• Reduce reliance on fund balance as a financing source in the current fiscal year and evaluate and modify estimated revenue sources and budgeted appropriations, where necessary.
• Use the workers’ compensation reserve in accordance with statute.
• Develop and implement a multiyear financial plan.
• Establish comprehensive policies and procedures for mobile devices. Implement safeguards over mobile devices including passwords, and limiting administrative access. Monitor compliance with and enforce the District’s acceptable-use policy.
• Establish policies for assigning mobile devices to ensure they are being deployed in the most cost effective manner.