CHS staff and administration are working to improve financial processes and procedures after receiving a subpar 2012 internal audit from MCPS.
Some of the audit’s criticisms included incorrectly classified transactions; the purchase of a cell phone for a staff member when MCPS already provided that staff member a Blackberry; possible breach of contract with a photography vendor; the lack of records for online yearbook purchases, and staff development costs and purchases for the drama and television programs incorrectly charged to the SGA account.
CHS received a five-page audit this year, with Whitman, Springbrook and Blair also receiving equally long audits. CHS received the most suggestions for improvement, 18, compared to 15 for Whitman, 10 for Springbrook and 14 for Blair. The other 22 MCPS high schools’ audits were either shorter or not published at all. Published audits are public documents available on the MCPS website.
“Each school gets audited every year,” Principal Joan Benz said. “It is like a report card. Our audit report is conducted in June. The report is usually issued in July.”
According to the audit published Sept. 5, principals are the fiduciary agents responsible for ensuring that Independent Activity Funds (IAFs) are administered in accordance with MCPS policies, regulations and procedures. This means that the principal is ultimately responsible for ensuring that all financial matters are handled accordingly.
“The principal, business manager and financial specialist meet with the auditors to review the report,” Benz said. “That way the misinterpretations are cleared up.”
One issue the audit addressed was the commingling of funds among different clubs, groups and departments.
“The responsibility of the financial specialist is to set up separate accounts for every club and group,” Benz said. “Monies hadn’t been separated into separate accounts.”
However, according to interim School Business Administrator Angela Blade, it is the “direct responsibility of the school business administrator” to ensure that all accounts follow MCPS policy and proper accounting procedures.
The school business administrator at the time of the audit was James Shovlin, who retired in November 2012. Blade has been the acting interim business manager since November.
Additionally, the audit asserts that “the school paid monthly invoices to provide a cell phone for [the principal’s] use, when MCPS provides “Blackberry or other communication devices to all principals.”
According to Benz, the cell phone purchase had previously been issued and “authorized.” It was recommended that the use continue “until the contract ended” to avoid a large fee for early termination of the contract.
“It has been totally rectified,” Benz said.
The audit also notes that “the records submitted to the financial office by the yearbook sponsor did not include a report of online sales by the vendor, so that a reconciliation of the number of books purchased with the number sold, given free, and the remaining inventory could be completed.”
According to yearbook sponsor Naomi Ratz, detailed records for yearbook sales were kept online and in the yearbook office.
“Now that we know that the business office needs to have a copy of the records, the records will be left with them at the end of the year,” Ratz said.
According to Benz, every staff member continues to be educated about the proper financial procedures at the beginning of each school year.
“When our teachers come back in August, they are required to attend a workshop which details their financial responsibilities,” Benz said. “An outline in the CHS Staff Handbook further details requirements for staff members who collect funds for any school activities and events.”
According to second-year CHS teacher Christine Carlson, who is the Relay for Life club sponsor, the administrators mentioned the audit at the orientation.
“They mentioned things got stricter after the audit, so they need paper records for everything,” Carlson said.
According to Benz, the purpose of the audit process is to “assure all monies are accounted for according to auditing guidelines.”
According to the audit, “the computer bank reconciliation reports were not in balance for several months in the audit period, and reports for March, April, and May 2012, had not been completed when [the auditors] arrived on June 28, 2012.”
Benz’s Sept. 19 response to the audit notes that “a process has been set into place that insures internal control processes occur monthly according to MCPS procedures.”
Benz believes that the number of students, staff and activities at CHS has a profound effect on the ability of staff to strictly regulate all financial transactions and procedures, and makes it harder for money to be closely regulated.
“Because of our large student enrollment, there’s more money that comes in and out of our school than other schools,” Benz said. “We are one of the four biggest schools in MCPS in terms of extracurriculars and athletics.”
According to the 2012 CHS school profile, there were about 136 teachers working at CHS with 2,085 students. Blair had 2,834 students and 158 teachers. Clarksburg, on the other hand, which received a near perfect audit, had 100 teachers and 1,711 students.
Additionally, CHS coaches who are not full-time staff members have a preseason meeting where the business manager discusses financial responsibilities.
“It is the coaches’ responsibility to know the financial procedures to follow,” Benz said.
To ensure money is secure and accounted for, students are not allowed to handle any money. This has been emphasized and enforced by staff members.
“I’m not allowed to handle the money,” said Toby Heller, Class of 2013 SGA treasurer. “[Scott] Selman handles it because he’s the sponsor.”
According to Heller, Selman submits monies to the financial specialist for the Class of 2013’s account. He then receives a receipt that is filed into the class’s account.
“The financial specialist and business manager have all the expertise in the business aspect,” Benz said. “There is ongoing training for members of MCPS business offices.”
According to Blade, MCPS is implementing a new financial computer program that will help CHS’ business office better identify the right accounts.
According to Benz, the most common error is “when people go out and purchase something without preapproval.” In this case, the item becomes theirs because they “didn’t follow the procedure” and can’t be reimbursed by the school.
“We don’t have the budget as a school to cover mistakes,” Benz said.
The audit additionally asserts that CHS exceeded the allotted MCPS funding for staff appreciation funds through the use of student funds. The MCPS fixed budget was $45 per each full-time staff member or full-time equivalent (FTE).
According to Benz, it was a miscalculation.
“The money was all here,” Benz said. “Our expenditures were calculated on the number of staff members as opposed to FTE staff members. The school buys a shirt for each staff member because you can’t buy one shirt to share between two part-time staff members.”
According to the memorandum, the county staff development budget for fiscal year 2013 was raised from $45 to $60.
Several of these financial issues have been longstanding at CHS and within MCPS. A July 2007 Gazette article cites “bookkeeping issues” and “poor financial management” as reasons for countywide financial concerns.
“The audit’s recommendations are directive and are not punitive,” Benz said. “The auditors facilitate improvements through the audit report so we are all in compliance.”
According to MCPS chief operating officer Larry Bowers, “an extensive amount of work has been done since 2007 to improve the financial management of school funds.”
Several improvements include the publication of an MCPS financial manual, mandatory financial management training, a stricter hiring process for school financial agents, and a central office position created specifically for working with school financial administrators.
Since audits are conducted on an annual basis, school administrators and financial agents are constantly identifying issues and working to solve these problems. Though both MCPS and CHS have made increased efforts to minimize these problems, only CHS’ 2013 audit will tell whether concerns have been effectively addressed and resolved.
CHS Media Services Technician Scott Selman, Drama Teacher Linda Scionti, MCPS Spokesman Dana Tofig, Community Superintendent Donna Hollingshead and MCPS Internal Audit Supervisor Roger Pisha did not respond for comment.
