Audit Recommends Improving School’s Internal Controls

PRAIRIE GROVE — Prairie Grove School Board at its Feb. 19 meeting accepted the financial audit for fiscal year 2016-17 as prepared by Beall Barclay & Company, CPA firm.

Eric Hoyt with Beall Barclay told board members the audit was “overall clean” and that everything was in “very good order.”

The audit had one finding Hoyt said is common among smaller school districts. The one finding was that duties needed to be segregated among more than one employee to ensure proper internal controls.

The report states, “During the year ended June 30, 2017, the District did not have a process in place to ensure property segregation of duties.” It also stated, “During the year ended June 30, 2017, we noted that the District Treasurer had full system access to the accounting records and has the ability to post journal entries without oversight.”

The effect could be that under the current process a fraudulent or incorrect transaction could be recorded without being detected.

The firm’s recommendation was that record keeping, authorization and journal entry posting be segregated. The firm also suggested limiting the finance director’s accounting system access.

School Superintendent Allen Williams said the district plans to take steps to remove that finding from future audits. When the administration office moves into its new building later this year, other staff members also will move into that building. Williams said that will give the district the ability to trade off duties and provide another person to look at finances.

Other ideas, Williams said, are to cross train employees or to have a second audit company come in monthly to look at the finances.