Report: ‘Poor documentation’ of monies at Carbon Hill school

By NICOLE SMITH, Daily Mountain Eagle
Posted 10/20/16

A financial consulting report of Carbon Hill Elementary/Jr. High School has revealed improper bookkeeping of the school’s monies.

The independent report by Carr, Riggs & Ingram accounting firm …

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Report: ‘Poor documentation’ of monies at Carbon Hill school

Posted

A financial consulting report of Carbon Hill Elementary/Jr. High School has revealed improper bookkeeping of the school’s monies.

The independent report by Carr, Riggs & Ingram accounting firm was presented by manager Britt Campbell at the Walker County Board of Education meeting Tuesday.

According to Walker County Schools Superintendent Dr. Jason Adkins, each school is audited every two years, but Margaret Scurlock, the custodian of funds for the county board of education, found some improper documentation — or lack thereof — in the bookkeeping at Carbon Hill Elementary/Jr. High. The inadequacies prompted the board to seek an outside firm to investigate the situation further.

Aside from an in-depth look at the school’s finances, Tanya Guin, the school’s principal, was placed on paid administrative leave in August for alleged ethics violations. The school’s bookkeeper has also been placed on paid administrative leave as the matter is being investigated.

Campbell said the financial report examined accounting practices at the school in accordance with the Walker County Schools accounting operations manual approved in September 2013, and financial procedures for local schools approved in May 2012. The firm examined cash dispersement and cash receipts at the school from October 2014 to August 2016, finding multiple areas of concern.

Campbell said there was “poor documentation” of school invoices found during the time frame examined and the proper procedure was not followed in making school purchases.

“Several purchase orders were not completed before the purchase of materials, supplies and equipment. For credit card purchases, the purchase order wasn’t completed at all,” Campbell said. “Accordingly, there could have been no review or approval of the purchase orders by the principal before these purchases were made.”

He continued, “When we look at our accounting operations manual, it specifically states the principal will be responsible for approving all purchases made on behalf of the school. It also states a local school purchase order should be issued for every local school purchase for goods and services, except for recurring school expenditures.”

The firm also found that in many instances those receiving goods at the school didn’t sign for them, and as a result prevented verification that the items in question were received.

Misuse of the school’s credit card was noted numerous times during the report, and credit card purchases were not itemized to state what was being purchased with the card.

“For several of these purchases, the related invoices were not included in the school’s documentation for their credit card payment, making it impossible to determine exactly what was purchased,” Campbell said, deeming their credit card log “inadequate.”

He said the school’s credit card was also used on an employee’s personal Amazon account.

“School credit card information was saved on an employee’s personal Amazon account, and the employee’s personal account was used to initiate a credit card transaction after school without any documented prior authorization for the purchase,” he said.

Campbell added that earned credit card rewards were not accounted for.

Other improper bookkeeping methods were undercovered, including:

•purchases made for food items without stating the intended party. “Several times during our sample, purchases from a grocery store or a restaurant [had] no indication of what the purchases were for,” Campbell said.

•sales tax that was included in purchases, even though the school is exempt from paying sales tax.

•negative fund balances for activities found in the principal’s report. “We noted several classes and athletic activities had negative fund balances, indicating spending that didn’t reflect revenue,” he said.

•improper documentation for teacher receipts.

•failure of the principal to properly assign receipt books to teachers.

The report also noted improper handling and documentation of concession monies.

“In some instances, it was noted that the bookkeeper was collecting money and signing off on behalf of other employees,” Campbell said. “For instance, every morning the janitor would receive the concession monies and turn it in to the bookkeeper. Based on discussions with him, there was no documentation on how much money he collected each day.”

He continued, “That’s just a lack of segregation of duties from the top down. You want to have controls in place to make sure there’s specific people monitoring checks and balances so there’s not one person doing the whole process.”

Campbell said the firm recommends strict compliance with accounting practices put in place by the Walker County Board of Education, close monitoring of credit card accounts and proper documentation of monies.

“Really, the things that they cited, those were some of the things that I saw,” Scurlock said. “Their purchase orders were not being used properly, invoices were not readily available for all expenditures.”

Adkins said the ethics charges against Guin, given the findings of the financial consulting report, remain under investigation.

“Discrepancies were discovered concerning public monies at Carbon Hill Elementary/Jr. High School. Margaret Scurlock, our seasoned and experienced CSFO, deemed it necessary to have an outside specific investigation conducted on those accounts,” Adkins said. “Under her advisement, I agreed with that, and the results, they’ve been reported, and we’re just waiting for the process to run its course as it was initially set forth under the advisement of our legal counsel. ... Nobody is guilty or charged of anything at this point in time.”