Purpose of Audit

The purpose of our audit was to determine the adequacy of District controls over the collection of retiree health insurance contributions for the period July 1, 2014 through February 29, 2016.

Background

The South Kortright Central School District is located in the Towns of Bovina, Delhi, Harpersfield, Kortright, Meredith and Stamford in Delaware County. The District, which operates one school with approximately 395 students, is governed by an elected five-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $9 million.

Key Findings

• District officials did not segregate duties or implement compensating controls.
• The Business Manager told us he has not prepared a reconciliation of the estimated premiums to the actual amounts so that the estimated billings can be adjusted.

Key Recommendations

• Segregate duties or implement compensating controls such as having someone independent of the billing and collection process verify that the proper amounts are billed.
• Design a reconciliation process to accurately adjust the initial retiree billings based on the estimated bills for the actual premium amounts charged.