GPS Audit – A Fifth Grader* Could Do Better Than This!

Big Fat Asterisk Up Front:  Hat tip to “Are You Smarter than a Fifth Grader?”  We wonder about some of the mistakes that were spotlighted in the 2012-2013 Audit Report, especially after we read the Gilbert Public Schools’ responses to the write-ups.

We’ve been looking at how Gilbert Public Schools is spending public money. We’re finding more of the same old, same old along with shenanigans that led to the remnants of the Good Old Boys having to explain to auditors why they did what they did.  Of course, the auditors were old pals of GPS, Heinfeld, Meech & Company. We found GPS payments of $7,490.00 and $2,246.18 to Heinfeld, Meech … plus $35.00 invoiced as “Jill Humpherys.”

We knew we were on to something when it became difficult to get a complete copy of the audit and GPS responses from the GOBs still entrenched in GPS. A friend asked for a copy, and received only a “draft” of the report without any GPS responses. It was worth the effort, though, to persist in making FOIA requests until we liberated a complete copy. As always, we’ll share.

The audit for the fiscal year that ended June 30, 2013 showed serious discrepancies in many areas. We’ll list them below. It’s important to keep in mind that GPS was misplacing hundreds of thousands of dollars in various accounts: $680,000; $343,434; and $714,714 for a total of $1,738,148, or almost TWO MILLION DOLLARS. That should be a wake-up call for anyone.

GPS replied to the auditor’s findings. In regard to the misplaced money identified above, GPS said “it was the bank’s fault,” and GPS had to make up the difference in a prior fiscal year. But GPS said they adjusted the errors and they’re sure current procedures will fix it all. See how easy that was? In a second finding, there was a recording of $414,687 that wasn’t received by year end (ooopsie!), along with failure to record the total amount of cash received in Classroom Site and Instructional Improvement funds. Plus, the General Fund had $7,678 missing in action (meaning, an unreconciled difference).

GPS also explained why cash accounts were not reconciled: “For several months we were behind in cash reconciliations due to a lack of resources.” The excuse: the person who was supposed to do those reconciliations left just before the audit. If “just before” wasn’t very long, why are reconciliations such a mess? GPS says they “restructured the process and methodology to allow a coordination of several resources to aid in this effort and stay up to date.” Clear as mud. Especially when GPS said the missing cash was in the months of posting still being caught up. Which brings up how long was “just before” once again. Bottom line: they still hadn’t cleared up where the cash was. Maybe they still haven’t cleared it all up, but the report has been issued, so let’s move on, folks.

The GPS Annual Financial Report on file with ADE showed big-figure discrepancies. “Actual revenues and expenditures were underreported on the AFR for the Other Federal Projects Fund and did not agree with the District’s accounting records by $198,712 and $213,556.” The GPS response: “We don’t have an automated system to catch this but the process has been modified.” Which means they still can’t those track revenues and expenditures.

Other responses to cash handling discrepancies and control of expenditures “will be addressed in training.” So will the numerous discrepancies in student attendance records. So why don’t you all shut up and go home?

There are problems in bidding and awarding contracts. There are problems with the payroll system. There are problems with documentation and other required files.

Here’s a goodie: GPS didn’t have a “written formal disaster recovery plan for technology.” Don’t worry about that; Tech Services “has implemented an email system” to fix the problem. We all know that Good Old Dave destroyed files and deleted email records, but somehow the Heinfeld, Meech audit gave GPS a clean report on Records Management , giving a “Yes” answer to the question about maintaining and disposing of records according to state guidelines. It pays to have a pal doing the audit, right? Wink, wink. Nudge, nudge.

Some write-ups appear below. If you click on the link to the audit, the GPS responses are there (for impatient folks). We’ll explore GPS responses and what all this means (and we’ll connect the dots) in future posts. Keep on chirping, birdies! We couldn’t do all this without you. [Have some chocolate.]

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DISCREPANCIES (everything shown below comes directly from the audit report)

Compliance Questionnaire: Accounting Records.

3. Were accounting records maintained in accordance with the USFR Chart of Accounts? Finding: NO.

8. Were the District’s records of cash balances reconciled to the County Treasurer’s records at least monthly, by either the CSS or the District? Finding: NO.

9. Were any differences that resulted from reconciliations with the CSS or County Treasurer’s records researched and resolved in a timely manner? Finding: NO.

Cash and Revenues:

11. Was cash received deposited intact daily, when significant, or at least weekly? Finding: NO.

14. Were validated treasurer’s receipts or revenue posting reports for all deposits with the County Treasurer reconciled to the District’s accounting records and to copies of deposit transmittals or treasurer’s receipts? Finding: NO.

Expenditures:

7. a. 5) Stamp sealed bids or proposals with the time and date upon receipt and store bids or proposals unopened until the time and date set for opening? Finding: NO.

7. b. For purchases made through competitive sealed bidding, did the District award contracts to the lowest responsible and responsive bidder whose bid conformed, in all material respects, to the requirements and evaluations criteria set forth in the IFB? Finding: NO.

13. b. Did the District retain the Governing Board’s written determination that there was only one source for required materials, service or construction items purchased though sole source procurement? Finding: NO.

Payroll:

3. Did the District establish a delayed payroll system so that employees were paid only the compensation they have earned? Finding: NO.

4. d. Did the District ensure that at no point during the year was an employee paid for more than actual hours worked to date? Finding: NO.

5. Did individual personnel files include appropriate supporting documentation, as listed on SUFR pages VI-H-2 through 4? Finding: NO.

Financial Reporting:

5. Did actual revenues and expenditures as reported on the AFR agree with the  District’s accounting records? Finding: NO.

Information Technology:

10. Did the District have a formal disaster recovery plan, and was it periodically tested to identify and remedy any deficiencies? Finding: NO.

Student Attendance Reporting:

4. Based upon review of (3) students’ attendance records in kindergarten programs, if the instructional time for the year was between 356 and 692 hours, were students not in attendance for at least three-quarters of the day counted as being absent or, if the instructional time for the year was 692 hours or more, were students not in attendance at least one-half of the day counted as being absent? Finding: NO.

6. Based upon review of (15) students’ attendance at elementary and junior high schools in which attendance was based on half days, were students in attendance for less than one-half the  day counted as being absent for one full day; were students in attendance for at least one-half day, but less than three-quarters of a day, counted as being absent for one-half day; and were students in attendance for at least three-quarters of a day counted in attendance for a day? Finding: NO.

8. Based upon review of (7) high school students’ attendance records whose attendance was reported in terms of absences, for all absence days reported in a 1 month period, did the District report absences in accordance with the method(s) provided in AD’s School Finance Procedures Manual? Finding: NO.

10. Based upon review of (7) high school students’ attendance records, did the District prorate the membership of the students enrolled  in less than four subjects as provided in ADE’s School Finance Procedures Manual? Finding: NO.

11. b. For school districts — Based on the review of (7) students’ attendance records for all absence days reported in a 1 month period, did the District calculate absences in accordance with the method(s) provided in AD’s School Finance Procedures Manual based on the number of District classes the student was enrolled in and attended (excluding JTED program classes)? Finding: NO.

13. c. Were all students who participated in an AOI Program residents of this state? Finding: NO.

14. Based upon review of (7) students’ attendance records (all grades) for students withdrawn for having ten consecutive unexcused absence, was the student only counted in membership through the last day of actual attendance or excused absence? Finding: NO.

16. We the withdrawal dates entered into the District’s computerized attendance system within 5 working days after the actual day of withdrawal and was documentation maintained to support the date of data entry? Finding: NO.


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