The Ridgefield School District was dinged by the Washington State Auditor’s Office for not having adequate cash receipting controls, according to a report from the office released Thursday.
The auditor’s office reviewed controls over cash handling and receipting at three schools in the district, as each building collects money for school lunches, field trips, class fees and after school activities.
The audit looked at the district from Sept. 1, 2013, through Aug. 31, 2016, and showed that a lack of internal controls and monitoring over transactions increased the risk that misappropriation or misuse of district resources could occur without being promptly detected, if detected at all. The district began strengthening controls during the 2015-2016 school year, and Superintendent Nathan McCann said it was an internal review from the district’s business services team that originally found some of the issues.
The district notified the auditor’s office on Jan. 4 about a potential loss of public funds, as required by state law. The auditor’s office conducted a test to determine whether a loss relating to fee revenues occurred at one of the district’s buildings, and found that a lack of supporting documentation for participation in fee-related activities and other inadequate controls complicated the testing.
According to the report, the auditor’s office developed an expectation of the maximum possible participation in fee-related activities at the school to come up with an estimate of expected revenue, and compared that to the actual amounts collected during the school years of 2015-2016, 2014-2015 and 2013-2014. The report identified variances where expected revenues exceeded collections by $1,731, $2,685 and $6,681, respectively.
The variances could be due to three possible reasons, according to the auditor’s office: misappropriation of collections, not billing students for fees or not collecting owed fees from students. The office was not able to determine the actual cause for the variances.
The report found that deposits were not made within limitations of the district’s daily deposit waiver and policy, and funds were held for up to five days past the limits of the waiver and policy at Union Ridge Elementary School and Ridgefield High School. At View Ridge Middle School, funds were not receipted in the system immediately upon collection, and it appeared the school collected funds and held them for up to a week before receipting them.
McCann said the district already started implementing some new policies to clean things up. When a district employee has to handle money, whether coming in to pay for things like a field trip or lunch, and then pass it off to another employee, both have to sign an agreement on how much is there. Money is also being locked up and deposited in a bank quicker.
“It’s not that it was some nefarious action,” McCann said. “Sometimes when collecting money, it would sit in the school if the person collecting knew more money was going to come in.”
The district now provides annual training to secretaries and those responsible for cash receipting to make sure they know about the district’s new requirements.
“It’s job one that we are transparent and 100 percent responsible and accurate with handling of all public monies,” McCann said. “We left the audit better positioned, which is what you always hope for.”
In a 2015 state auditor’s report, officials found the district didn’t have proper protocols in its financial statement preparation and its verification and reporting for a federal nutrition grant during the 2013-2014 school year.
In response, the district said additional monitoring, hiring and training had occurred and the problem was addressed.