Errors found in schools audit

By Emily Richmond (contact)

Thursday, Nov. 20, 2003 | 11:07 a.m.

An audit of the Clark County School District's finances turned up numerous calculation errors made by accounting employees in various departments -- apparently a result of failing to double-check their own work, School Board members were told Wednesday.

While overall the audit found the district did well in handling its fiscal operations, the calculation mistakes were serious enough to warrant corrections to financial statements that had already been issued, according to the report presented by the accounting firm Kafoury, Armstrong & Co.

"We understand that the district is short-staffed due to the inability to retain experienced staff and hire qualified replacements, but the quality and integrity of the district's accounting function appears to be in jeopardy," the report states.

The full cost of the human errors to the district -- either financially or in lost manpower time -- was not immediately known. The audit report cited one instance in which data was incorrectly recorded, resulting in the district overcharging a grant for services provided to grade 29,000 proficiency tests. The grant was charged $27,840 above the actual cost to the district of $278,400, the report found.

Many of the errors were in manual calculations, and those types of errors are expected to be eliminated in about 18 months when the district phases in its new integrated data management system, the audit found. Meanwhile, auditors recommended the district centralize its accounting process -- rather than have separate offices for different departments such as food services or transportation -- as a way of improving oversight.

Walt Rulffes, district deputy superintendent of operations, said given that accounting personnel are spread out at locations throughout the Las Vegas Valley, pulling them all together would not be realistic. Rulffes said the new integrated data management system -- expected to cost $27 million over the next three years -- would have the effect of consolidating the various departments electronically, making it unnecessary for people to share physical office space.

The district has experienced high turnover in key accounting positions, and has devised several new job classifications in the hopes of attracting new employees, Rulffes said.

"What it comes down to is we don't have enough people to do the work that needs to be done," Rulffes said. "It's a legitimate concern and I'm glad (the auditors) have raised these points."

The auditors did have praise for the district's implementation of recommendations from the last year's report, including the need for better oversight of finances at individual schools.

In 2002 an internal audit by district staff of 76 schools turned up problems at all but two campuses, and three instances of fraud. Most of the problems stemmed from the handling of purchasing cards, which are used to acquire goods with district funds. Purchasing records were not adequately kept and there were also numerous instances of "split transactions," when the purchase price was divided into separate transactions in order to avoid the district spending limit for any one item.

Since then, the district severely limited the number of employees that have access to the purchasing cards, require region superintendents to sign off on reimbursements and use school accounting records as part of principals' annual reviews. While this year's audit also reported a handful of incidences of split transactions, the overall percentage was much lower.

The audit found the district had also followed through on earlier recommendations related to shortcomings in information technology security, including requiring employees to change their computer codes more frequently and a strict written policy forbidding the disabling of anti-virus software.

"There has been significant improvement," Tamara Miramontes, one of the accountants who worked on the district audit, told the school board. "You are holding people accountable."

Clark County Schools Superintendent Carlos Garcia said he was pleased that the audit found the district to be in compliance overall and to be appropriately handling its finances.

"Most institutions would kill to have an audit this clean," Garcia said.

The good report will help the district when it seeks additional bond money from voters in 2006, said School Board President Sheila Moulton.

"It's certainly a boost to our credibility," Moulton said.