District Officials Tweak Accounting Procedures To Track ‘Student Activity’ Funds More Closely

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Following an audit last year that unearthed some problems, district officials are changing the way they manage cash-heavy funds surrounding activities such as clubs, athletics, theater productions and yearbooks.

Most of the $422,389 opening balance in “Student Activity Accounts” (see page 66 here) for this year resides at New Canaan High School, and the largest single portion of the money runs through 100-plus extracurricular clubs, according to Dr. Jo-Ann Keating, the district’s director of finance and operations.

A 2015 audit turned up “significant deficiencies” in Student Activity funds, as well as in food services, and prompted the district to develop new accounting procedures, Keating told members of the Board of Education at their meeting Monday night.

The auditors “said that the Board of Education has no processes in place to monitor Student Activity funds,” Keating said at the meeting, held in the Wagner Room at New Canaan High School.

“Because there is not a separation of duties with cash receipts and revenue taken, the board should review the controls to make sure that proper procedures are in place so it can be monitored on a regular basis. So why do we want to do that? We want to do that, number one, to mitigate risk for loss of assets. We want to have reliable reporting for decision-making and we want to be transparent in reporting to our constituencies to the board. So it is very important to be able to segregate and separate duties to ensure that our controls over cash and other transactions are as tight as can be to allow for those things.”

With help from consultant Joseph Centofanti of Stamford-based Cohn Reznick LLP, the district put new procedures in place—such as getting more eyeballs on deposits and disbursements for individual clubs and sports, and introducing new forms—and the deficiencies found last year didn’t turn up in a recent financial audit, Keating said.

In thanking Keating and others involved in the improvements, school board Chair Dionna Carlson called their work “a herculean effort” that has brought “a lot more structure to the way we operate in the high school.”

“It has cleared up every issue from last year’s audit and we have a clean audit going forward,” Carlson said.

Board of Ed members asked Keating what was being done to increase the level of electronic versus cash payments (everything possible), what was the current breakdown of cash versus online payments (it depends on the activity—football games typically bring in 75 percent cash), whether officials looked at best practices in the area (yes), whether the finance office had created a new policy (no, just procedures) and what was being done specifically with athletics ticket sales to bring them online (without buying a new electronic system, there are better controls now in place with manual ticket sales).

Centofanti said athletics has been one area of focus because “it’s a little more difficult to set up some controls” with cash-heavy gate revenue.

“So we are looking at the flow of information from the gate receipts till it hits the finance department or it hits bank, for a set of recommendations to strengthen the controls related to the athletics department and those cash collections,” he said.

Keating said it’s been important that accountability is shared between the district’s business office and the school administration “because that is where the buck stops.”

“We need to make sure that there are good systems in place and that they are followed,” she said.

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