Purpose of Audit

The purpose of our audit was to evaluate the District’s payroll procedures for the period July 1, 2014 through November 30, 2015.

Background

The Long Lake Central School District is located in the Towns of Arietta and Long Lake in Hamilton County. The District, which operates one school with approximately 60 students, is governed by an elected five-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year total approximately $3.9 million.

Key Findings

• The School Business Official’s duties were not adequately segregated because she was responsible for collecting employees’ time records; recording the hours worked or salaries to be paid; making changes to employees’ pay rates, withholdings and deductions; performing transfers between the District’s bank accounts for payroll purposes and preparing and executing the employees’ direct deposits.
• The Superintendent’s reviews of the payroll process were not adequate because he did not compare payroll registers to payroll source documents (i.e., time records) to ensure that payments were based on the actual hours or days worked and Board-authorized hourly rates or annual salaries.

Key Recommendations

• District officials should implement compensating controls to address the lack of segregation of duties within the payroll process. Such controls include increasing management reviews of work performed by the School Business Official.
• The Superintendent should compare payroll registers to payroll source documents when certifying payrolls to ensure that payments are based on the actual hours or days worked and Board-authorized hourly rates or annual salaries.