Audit reveals errors in bookkeeping at CH school

By NICOLE SMITH, Daily Mountain Eagle
Posted 4/20/17

A state audit of the Walker County Board of Education has revealed compliance issues with state and local laws at Carbon Hill Elementary/Jr. High School.

The report, filed on April 7 by the state Department of Examiners of Public Accounts, served …

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Audit reveals errors in bookkeeping at CH school

Posted

A state audit of the Walker County Board of Education has revealed compliance issues with state and local laws at Carbon Hill Elementary/Jr. High School.

The report, filed on April 7 by the state Department of Examiners of Public Accounts, served to examine the board’s financial statements and compliance with laws and regulations from the period of Oct. 1, 2015, through Sept. 30, 2016.

Findings in the report cited Carbon Hill Elementary’s “failure to properly expend public funds,” “failure to utilize an adequate purchase order system” and “failure to utilize proper procedures over the receipt and deposit of funds.” The report also said the school used a credit card to pay for expenses, in violation of the Code of Alabama 1975.

Public Accounts Examiner Josh Taylor presented the findings at the Walker County Board of Education meeting Tuesday evening.

One finding stated that Carbon Hill Elementary purchased trophies for the school’s volleyball team with public funds, which violated the Constitution of Alabama 1901 Section 94(b), which states expended funds for student recognition may be used only to recognize academic achievement. Taylor said the board repaid the money used to purchase the trophies, once they were made aware of the error.

Another determination in the report stated Carbon Hill Elementary used a credit card to pay for school items without getting the board’s approval. The report stated, “Neither the Code of Alabama 1975, nor any other provision of law in effect authorizes the use of credit cards in the name of the board or the local schools under the board’s control.”

The report also cited multiple instances of failure to maintain a proper purchase order system. During the period examined, many purchase orders were approved after purchases were already made, and several purchase orders were not signed. The report said lack of a signature made it impossible to determine if items ordered were actually received by the school.

In addition to purchase order errors, the report stated that money was not being properly accounted for, which resulted in overspending.

“Several activities expended more money than they had available to spend, which resulted in the activities having deficit fund balances,” the report stated. No details were given concerning the specific activities nor the total deficit amounts.

The report further detailed the inadequate mishandling of money by the school.

“An adequate system of internal controls and board policy require receipts to be written for all money received and that deposits are to be made daily. Carbon Hill Elementary School had $2,596.20 of cash money on hand. The money collected had not been receipted by teachers or by office personnel. Additionally, the money was not recorded in the school’s accounting records and was not deposited into the school’s bank account,” the report read. “Since the amount of money on hand was not receipted, it could not be determined if the amount of money on hand is correct.”

Superintendent Dr. Jason Adkins sent a letter to the state Department of Examiners of Public Accounts to indicate agreement with the report’s findings and to assure that proper action would be taken so the same mistakes are not made again.

“We agree with your recommendation. When we became aware of these problems, we notified you as well as the State Department of Education,” Adkins said in the letter.

Adkins also said the board was unaware athletic trophies couldn’t be purchased with public funds, and that trophies would not be purchased with public funds in the future.

The board of education had an independent audit conducted of Carbon Hill Elementary’s bookkeeping last year by Carr, Riggs & Ingram accounting firm, which revealed some of the same documentation errors and mishandling of money.

The new audit also detailed some positive points, such as the board’s net position increase of $190,000 during the year examined. The board closed 2016 with a net position of $2.77 million. In addition, the board’s capital outlay projects totaled $2.16 million, which included construction at Carbon Hill High, Curry Middle, Oakman Middle, Oakman High and Valley Junior High schools and a technology upgrade throughout the school system.

The full report from the state department may be viewed at www.examiners.alabama.gov.

In other business, the board:

•approved the purchase of six new school buses at a cost of $500,000. The buses will be air conditioned and financed through Regions Bank.

•approved to spend $5,000 on a football locker room at Carbon Hill High School.

•approved a number of school trips and a $500 stipend for each approved Beta Club trip.

•approved non-faculty coaches Jeff Smith and Cantrell Tyson. Smith will be a softball coach at Oakman High School, and Tyson will be a football coach at Carbon Hill High School.