STATE DEPARTMENT OF EDUCATION

OFFICE OF INTERNAL AUDIT

ADVISORY MEMORANDUM
DATE: TO:

April 4, 2012 Pat Ciccone, Superintendent Connecticut Technical High School System Brian Mahoney, Chief Financial Officer Finance and Internal Operations

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FROM:

Richard LeMay, Supervising Accounts Examine

Office oflntemal Audit RE:

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Henry Abbott Technical High School - Student Trustee Account

During our recent examination of the Student Trustee Account CSTA) at Henry Abbott Technical High School, we identified certain practices that we believe should be brought to you!' attention at this time in order to afford the opportunity for corrective action in a timely manner. The details of our findings are reported below.

Background
On February 2, 2012 we met with Connecticut Technical High School System (CTHSS) Central Office staff to discuss their concerns with STA transactions at Henry Abbott Technical High School. Specifically, 1) Student Trustee Account funds being used for transactions normally funded from state operating funds and 2) the disposition of Class of 1992 funds after a recent inquiry from a Class of 1992 representative. On February 7, 2012 we performed a review of recent STA activities at Henry Abbott Technical High School that included examinations of STA purchase records and inquiries with applicable school staff.

Findings #1

Student Trustee Account Purchases

Through inquiry with the School's Principal and Business Manager and our review of transacti ns involving purchases, we revealed the following instances in which the school did not adhere to established operating procedures or policies associated with STA transactions: On November 7, 2008 the school transferred $10 ,000.00 from the Kenneth A. Michael Scholarship Account to the Miscellaneous and General Surplus account within the STA. Student council m inules indicate approval of the transfer. Based on scholarship criteria, The Kenneth A. Michael Scholarship Account is to be used for post-secondary scholarships and/or tool/equipment awards. The Principal has stated that the monies were used for gym repairs/equipment that had not been approved as paft of the school's renovation project. Documentation reviewed by OIA indicated that approximately $91,235.00 was spent via the STA on gym related repairs/equipment and approximately $8,765.00 remained in the Mi ceIJaneous and General Surplus account. The School has since transferred approximately $J5,000.00 back into the Kenneth A. Michael Scholarship Account. In addition, our review of 2010-2011 and 2011-2012 STA purchases revealed that approximately

$1,825.00 was disbursed for non-student activity related activities including newspaper advertising, open
house signs and a school sponsored dinner.

The expenditures noted above are clearly School operating expenses and should not have been paid from the STA.

We recommend the following:

1. CTHSS management work with SDE Fiscal Services to replenish the School's Student Trustee Account with CTHSS operating funds.
2. CTHSS management review Student Trustee Account procedures associated with purcha es and scholarship accounts with the School's Principal, Business Manager aDd Student Council A visor. 3. CTHSS program manager monitor all future Henry Abbott Trustee Account purchases to ensure compliance with Student Trustee Account policies and procedures.

CTHSS Response:
1. We agree with this recommendation. Operatingfunds have already been targetedfor transfer to Henry Abbott's Student Trustee Account. $85,000.00 will be transferredfrom operatingfunds to the KennethA. Michael Scholarship account to reimburse the scholarship accountfor the inappropriate transfers out and $1,825.00 will be transferredfrom operatingfimds into Henry Abbott's Student Trustee Account - General and Miscellaneous account to reimburse the accountfor newspaper advertising, open house signs, and a school sponsored dinner. 2. We agree with this recommendation. A meeting with the three identified staffwill be scheduled immediately. 3. We agree with this recommendation and have already implemented procedures to ensure all Henry Abbott's STA purchases are pre-approved by a member ofthe district's central office fiscal staff In addition, we are exploring with our student trustee account software vendor the feasibility of requiring central office review and electronic pre-approval ofall student trustee account purchases.

Findings #2

Class of 1992 Student Trustee Account Funds

Through inquiry with the School's Principal, Business Manager and CTHSS staff and our review of documentation relative to the Class of 1992 we noted the following: a) The Class of 1992 had a balance of $9,741.68 per the school's STA trial balance dated 6/30/1998. b) The Class of 1992 had a balance of $0 per the school's STA trial balance dated 7/31/1999. c) The school was unable to provide documentation of Class of 1992 fund activity between 6/30/1998 and 7/31/1999. d) Minutes instructing the use of remaining Class of 1992 funds have not been obtained from the class officers and could not be located at the school. The revised STA procedures manual dated December 6, 1990 states the following "Commencing with the class of 1989, balances in class accounts remaining after all class activities have been paid may revert to the SlUdent Council account. Funds which are in the class accounts may not be transferred to the custody of class officers. The school Director must maintain custodial obligation over these funds. If there are no specific instructions left in the class minutes regarding use of the funds and a class account has had no

activity for a year and it is cel1ain that all encumbrances have been paid, then the funds will revert to the student activity association's general fund and the account is closed." Without minutes from the Class of 1992, we cannot determ ine the disposition of Class of 1992 funds.

We recommend the following:

1. CTHSS Central Office pursue Class of 1992 minutes from class officers.

CTHSS Response:
1. We agree with this finding and will request the appropriate minutes from class officers.
Thank you for your attention to this matter and please contact me with any questions.

Attachment RUnc
cc: Ellen Camhi Nora Chapman Jim Chasse Justin Cleary Bruce Ellefsen Robin Fiumara Theresa Hopkins-Staten Charles Jaskiewicz Patricia Keavney-Maruca Ada Kercado Robert Lombardi Patricia Luke Stefan Pryor Marilyn Rosen Jerry Salese Allan Taylor Beatrice Tinty Nivea Torres Joseph Vrabely Jr. Ramona Weingart Stephen P. Wright

I-------Conn ctient Technical----------'

I-ligh School Syste

TO: Richard Lemay, Supervising Accounts Examiner Office of Internal Audit Patricia A. Ciccone, Superintendent March 26,2012 Response to Audit Review of Student Trustee Accounts - Henry Abbott THS

FROM: DATE: SUBJECT:

Detailed below is the CTHSS' response to the recently completed audit of student trustee accounts (formerly called student activity funds) at Henry Abbott THS.

Recommendations #1.1 to #1.3 - Student Trustee Account (ST A) Purchases R commendation: CTHSS management should work with SDE Fiscal Services to replenish the school's Student Trustee Account with operating funds. Response: We agree with this recommendation. Operating funds have already been targeted for transfer to Henry Abbott's Student Trustee Account. $85,000 will be transferred from operating funds to the Kenneth A. Michael Scholarship account to reimburse the scholarship account for the inappropriate transfers out and $1,825 will be transferred from operating funds into Henry Abbott's Student Trustee Account - General and Miscellaneous account to reimburse the account for newspaper advertising, open house signs, and a school sponsored dinner.

Recommendation: CTHSS management should review Student Trustee Account procedures associated with purchases and scholarship accounts with the school's principal, business manager, and student council advisor. Response: We agree with this recommendation. A meeting with the three identified staff will be scheduled immediately.

Recommendation: The CTHSS program manager should monitor all future Henry Abbott Student Trustee Account purchases to ensure compliance with STA policies and procedures. Response: We agree with this recommendation and have already implemented procedures to ensure all Henry Abbott's STA purchases are pre-approved by a member of the district's central office fiscal staff. In addition, we are exploring with our student trustee account software vendor the feasibility of requiring central office review and electronic pre-approval of all student trustee account purchases.
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Recommendations #2.1 - Class of 1992 Student Activity Funds Recommendation: The CTHSS Central Office should pursue Class of 1992 minutes from class officers. Response: We agree with this finding and will request the appropriate minutes from class officers.

On behalf of the Connecticut Technical High School System, we welcome the opportunity for our fiscal operations to undergo review and be provided recommendations for improvement. Thank: you.

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Robert Lombardi, James Chasse, Ada Kercado, Robin Fiumara, Nora Chapman, Justin Cleary