Businesses periodically review spending patterns for cost reductions. But, as the story below says, School District's don't seem to monitor even the easy, small stuff.
Apparently, an audit found that the School District was paying fees for Sam's Club membership cards for many people, including former students, former District employees and one parent, plus "dozens" of employees that did not need them. The District also didn't have any process to obtain the cards back from people once they left the District.
The money isn't much, about $3,000, but it is the lack of a control process that is disturbing. Someone in the HR department or Finance should be sanctioned for not having such a control proceduree to ensure only authorized District staff were using the discount cards, ESPECIALLY if the District was paying a fee for them.
It makes you wonder what other control processes are missing. However, one positive indicator was that a Principal asked for, and got an audit based upon his initial concerns.
vj
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from the local NBC TV affiliate in Columbus, Ohio:
http://www.nbc4i.com/midwest/cmh/news.apx.-content-articles-CMH-2008-06-03-0009.html
Audit Finds Unnecessary Spending In Columbus Schools
Tuesday, Jun 03, 2008 - 09:52 AM
COLUMBUS, Ohio -- According to an audit of Columbus City Schools, there were more than $3,000 in unnecessary expenditures.
The report indicated that at least 13 people, including former students and a parent were incorrectly listed on school accounts for Sam's Club and Wal-Mart. The accounts were paid for by the district and some of the users were former school employees who never returned their membership cards when they left the district.
The district began looking into its Sam's Club memberships after the principal of Windsor Alternative Elementary School asked auditors to investigate his secretary to see if she was using district money to make personal purchases at the nearby Sam's Club.
The investigation found that the secretary wasn't misusing her card, but it also found dozens of people who had memberships paid for by the district but did not need them.
"I think that there just was not an attention to detail in relation to these Sam's Club cards because in the whole scheme of things, relative to the other things the principals are doing, they're relatively minor," said Harold Saunders, internal auditor.
Schools that requested a Sam's Club membership were advised to allow two employees access.
One school, the Mifflin Welcome Center, had 25 employees with memberships.
At a cost of $35 per membership, the district paid more than $800 in excess fees for the welcome center.
Overall, Saunders said the school district spent $3,010 in excess fees.
Saunders is recommending the memberships be cancelled, but said he doesn't believe the employees should have to reimburse the district for the cost of the memberships.
"We, the district, authorized the user for that card and so therefore, I think we have to take some of that responsibility ourselves and say we're going to tighten up our policies and procedures and make sure we only have the cards out there that we require," Saunders said.
A school representative said she hasn't decided whether to cancel the memberships yet.
Saunders said the district is discussing setting up a new hotline for employees to anonymously report suspected fraud and waste.
