Special Audit of. Del Prado Elementary School

Transcription

1 Special Audit of Del Prado Elementary School September 10, 2010 Report

2 MISSION STATEMENT The School Board of Palm Beach County is committed to excellence in education and preparation of all our students with the knowledge, skills, and ethics required for responsible citizenship and productive employment. Arthur C. Johnson, Ph.D.* Superintendent of Schools School Board Members Monroe Benaim, M.D., Chair Dr. Sandra Richmond, Vice Chair Frank Barbieri, Jr.*, Esq. Paulette Burdick William C. Graham Carrie Hill* Debra Robinson, M.D. Audit Committee Members Cindy Adair, CPA, Chair Richard Roberts, CPA, Vice Chair Max Davis Gregory S. Daniel Audley Porter, CPA Noah Silver, CPA David Talley Bruce Harris*, Esq. Robert Dow* *Ex-Officio Audit Committee Members

3 Special Audit of Del Prado Elementary School Table of Contents PURPOSE AND AUTHORITY 1 Page SCOPE AND METHODOLOGY 1 COMPLAINTS 2 CONCLUSIONS 1. PTA-Sponsored Afterschool Clubs 2 - Background 2 - Overlapping Hours 3 - Federal Income Tax Not Withheld Nor Paid to IRS 4 - No Lease Executed 4 - School Should Consider Organize the Afterschool Clubs 4 2. Time Reporting and Payroll for the ITSA and School Secretary 5 - Background 5 - ITSA Received Pay Without Work Duties Assigned 5 - School Secretary Entered Pay Hours for Her Son and Herself Without Documentation 6 APPENDIX Management s Response 7

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5 THE SCHOOL DISTRICT OF LUNG CHIU, CPA ARTHUR C. JOHNSON, Ph.D. PALM BEACH COUNTY, FLORIDA DISTRICT AUDITOR SUPERINTENDENT OFFICE OF THE DISTRICT AUDITOR 3318 FOREST HILL BLVD., C-306 WEST PALM BEACH, FL (561) FAX: (561) M E M O R A N D U M TO: FROM: Honorable Chair and Members of the School Board Arthur C. Johnson, Superintendent of Schools Chair and Members of the Audit Committee Lung Chiu, CPA, District Auditor DATE: September 10, 2010 SUBJECT: Special Audit of Del Prado Elementary School PURPOSE AND AUTHORITY In response to numerous complaints referred to the Human Resources Customer Relations Department and subsequently referred to our department concerning Del Prado Elementary School, we have examined the school s payroll for staff working in afterschool clubs sponsored by the school s Parent Teacher Association (PTA) during September 1, 2007, and June 30, The primary objective of the audit was to determine if the allegations in mishandling of employee wages could be substantiated and if District policy and procedures are being complied with. SCOPE AND METHODOLOGY The audit was performed in accordance with Generally Accepted Government Auditing Standards by Susan Miller, CIA, during November 2008 and August 2009; and included: Interviewing school staff and the PTA s officers. Reviewing appropriate Collective Bargaining Agreements for the Classroom Teachers Association (CTA) and the Association of Educational Secretaries and Office Professionals (AESOP). Reviewing District time and payroll records for Fiscal Years 2008 and Reviewing District budget and accounting records for Fiscal Years 2008 and Reviewing School accounting records for Fiscal Years 2008 and Draft findings were sent to the school for review and comments. Management response is included in the Appendix. We appreciate the courtesy and cooperation extended to us by District staff during the audit. The final draft report was presented to the Audit Committee at its September 10, 2010, meeting. 1

6 COMPLAINTS The complaints contained two major issues: personnel and financial. A. Personnel Related Issues 1. Questionable substitute teacher assignment and student safety. 2. Services provided to Exceptional Student Education (ESE) Students. 3. Recording of teacher leave hours. B. Financial Related Issues 1. PTA-sponsored afterschool clubs organized by the school secretary and payments received by school staff. 2. Wages and time reporting for the school secretary and the Instructional Technical Support Assistant (ITSA). Issues related to personnel were handled by the Human Resources Customer Relations Department. This audit focused on the two financial related issues and produced two major conclusions. Investigation. We completed the audit in August 2009, and management response from the school was received on November 13, On December 4, 2009, South Area Superintendent s Office referred the audit conclusions to Employee Relations Department for further review and necessary actions. Employee Relations completed its investigation and appropriate personnel actions were taken in August CONCLUSIONS 1. PTA-Sponsored Afterschool Clubs Complaint: The school secretary receives stipends for administering approximately 50 PTA-sponsored afterschool clubs. Background. For several years, the school s PTA had been sponsoring fee-based afterschool clubs between 2:15 p.m. and 3:30 p.m. Initially, the clubs were provided by outside vendors and organized by PTA volunteers. As the programs grew, difficulty in maintaining a volunteer organizer prompted the PTA to consider discontinuing the programs. Subsequently the school s secretary offered to take on the task of organizing the clubs and the offer was approved by the principal. Thereafter, all outside vendors for the afterschool clubs were replaced by school staff who provided program ideas and wished to be facilitators. The secretary received from the PTA a total stipends of $1,000 per session for organizing all the clubs during Fiscal Years 2008 and Four sessions of afterschool clubs are offered to students throughout the school year. During Fiscal Year 2008, an average of 526 students registered for each of the four sessions. For the 2

7 first two sessions of Fiscal Year 2009, an average of 501 students attended the clubs, and twothird of them were non-sacc students who were either picked up by their parents/guardians or walked home at 3:30 p.m. During 2009, afterschool clubs offered by the PTA included FCAT preparation, book clubs, sports, dances, arts, and crafts. Program fees ranged from $45 to $125 per club per session. Registrations and fees were collected by responsible teachers and placed in a lidded box in the office. Verification of fees was done by the school secretary at home and the revenues were deposited into the PTA s bank account. Club facilitators, both instructional and noninstructional staff, received directly from the PTA a $400 stipend per club for a five week session or $64 per hour. Some activities required more than one facilitator and each received a $400 stipend. The regular work-hours for a teacher are from 7:30 a.m. to 3:00 p.m. Pursuant to CTA s Collective Bargaining Agreement (page 33), teachers are allowed to handle afterschool activities at the end of students regular school day and are not required to put in any planning time. However, the regular work hours for non-instructional employees, including those who administered the afterschool clubs, are usually between 7:30 a.m. and 4:00 p.m. Overlapping Hours. During Fiscal Year 2008, five non-instructional employees were involved in facilitating the afterschool clubs during 2:15 p.m. and 3:30 p.m. and each received the $400 per session stipend from the PTA, thus overlapping the time for 75 minutes (2:15 to 3:30 p.m.) that was also compensated by the District. Although the principal indicated that these five noninstructional employees were allowed with flexible work schedule, there was no District guideline providing for that flexibility. Moreover, there were no timekeeping records for these five employees documenting their make-up hours for overlapped time. On October 13, 2008, Bulletin #P CAO/COO Flexible Work Schedule Request was issued. This Bulletin allows principals to make requests of the Chief Academic Officer to establish a flexible work schedule for specific individuals with certain criteria. The principal indicated that no requests for flexible schedule were made during Fiscal Year 2009 for any of these five non-instructional employees. Management s Response: Non-instruction staff had principal s permission to do a flexible work schedule and made up their time after the completion of clubs each day. The principal was not aware that on October 13, 2008, Bulletin #P CAO/COO flexible work schedule request form was created. In March 2009, the auditor advised the principal of this form to be used in the future. A formal flexible work schedule request will be submitted to the CAO for FY2010 clubs. A time keeping record for non-instructional staff will document the make-up hours for time owed. (Please see page 7.) 3

8 Federal Income Tax Not Withheld Nor Paid to IRS. The five non-instructional employees received from the PTA a total of $21,200 in stipends during Fiscal Year 2008, and $9,800 for the first two sessions in Fiscal Year The PTA also reimbursed staff for any materials or supplies purchased to operate the activities or pay the vendors directly. Although the PTA compensated school staff for administering the afterschool clubs, employment taxes are not paid by the PTA and IRS Form 1099-MISC have not been issued to these school staff. Management s Response: 1099 MISC Forms will be distributed by the PTA to each person that administers a club. (Please see page 7.) No Lease Executed. The school had no lease agreement with the PTA for operating the afterschool clubs. School Board Policy 2.121(8) provides that non-student initiated groups may lease the premises pursuant to School Board Policy Groups meeting pursuant to these provisions must lease the facilities from the School Board. Since the PTA maintains its funds in a bank account outside of the school s Internal Funds, it is required by School Board Policy to enter into a lease agreement for using the school facilities. Management s Response: PTA will sign a lease for each activity in which they use Del Prado s facility. (Please see page 7.) School Should Consider Organizing the Afterschool Clubs. Since the afterschool clubs are fee-based and already being organized by school employees, the school should consider operating the afterschool clubs directly and accounting for monies through the Internal Accounts. The District s payroll system has already built in the annual and seasonal staff supplements based on the CTA s Collective Bargaining Agreement for operating certain afterschool activities. These supplements are also available to non-instructional employees. During the audit, the school paid stipends to staff for Yearbook Club and SECME Club while these staff members also received PTA stipends for the same activities. Based on the CTA negotiated hourly rate of $20.44 for teacher s additional duties, total salary saving for the fee-based afterschool clubs would be $56,897.85, which included the average fringe benefits, for Fiscal Years 2008 and This could be a significant saving to the students families. Management s Response: This would be a far too great undertaking for the school to maintain. (Please see page 7.) 4

9 2. Time Reporting and Payroll for the ITSA and School Secretary Complaint: The Instructional Technical Support Assistant (ITSA), who was the school secretary s son, was paid full salary although he was leaving early and coming late, depending on his college class schedule. Background. Our examination of payroll records indicated that the school did not maintain time records for non-sacc part-time temporary workers. There are no source documents signed by an immediate supervisor to authorize the ITSA s work hours recorded in the PeopleSoft payroll system by the school secretary. All SACC employees record their work hours on a time clock. Timesheets are printed each week by the SACC director, and the work hours are entered into the payroll system by the school secretary, who is also the mother of the ITSA. Timesheets are maintained and filed by the SACC director after input into the payroll system. ITSA Received Pay Without Work Duties Assigned. For the first half of Fiscal Year 2008, the ITSA held a part-time position funded by a $12,500 PTA grant. The ITSA received $7,490 for this position from July 1 to December 31, He also received $3,742 from another parttime job as SACC counselor during Fiscal Year However, the SACC director indicated that she did not assign any job duties to the ITSA in the SACC program. Moreover, no students were assigned to the ITSA nor did he work during the 2008 Summer Camp; however, payroll records show that a total of $962.03, for work hours, in SACC wages were paid to the ITSA for the 2008 Summer Camp. Management s Response: The principal oversaw the ITSA s part time PTA funded position through December At that time the district did not have and still does not have a system for temp employees to log their hours. Effective January 2008, the employee became a permanent ITSA funded by the district. During the summers of 2007 and 2008, the employee kept a written log of hours that he worked for SACC/Summer Camp. The employee s responsibilities included maintaining all computers and computer labs that the students utilized during these programs. The auditor recommended in March 2009 that all temporary employees log their hours. From January June 2009, the employee did not work for SACC, so therefore there was no need for him to clock in or out of SACC. During the summer of 2009 he was provided with a card from the SACC Director so that he could log his hours by swiping his card in the SACC office. (Please see page 8.) 5

10 School Secretary Entered Pay Hours for Her Son and Herself Without Documentation. The school secretary, in addition to her primary job, which is a 40 hour per week position, also received additional wages as a SACC counselor. Her work hours as a SACC counselor were compensated at the time-and-a-half premium wage. However, the SACC director stated that the school secretary s assigned job duty included only one hour each morning supervising students in the morning care program. According to payroll records, the school secretary received a total of 47.5 hours (or $1, in wages) and hours (or $ in wages) in excess of all the total one-hour-per-day assignment paid at time-and-a-half in Fiscal Years 2008 and 2009, respectively. There were no timesheets for the ITSA or school secretary for their work hours as SACC counselors in Fiscal Year The SACC director stated that neither of these employees clocked in or out in the SACC office in Fiscal Year Beginning March 27, 2009, the school secretary began using the SACC time clock; however, the ITSA did not. The hours used to calculate their wages are entered into the PeopleSoft payroll system by the school secretary and subsequently approved by the principal. Because no certified SACC timesheets were maintained for the ITSA and the school secretary, we were not able to verify the work hours reported or the wages earned by them during Fiscal Year 2008 and part of Fiscal Year The school did not comply with Federal Fair Labor Standards Act, which requires retention of records on which wage computations are based. The District does not have any written policies or procedures regarding the documentation of hours used to calculate wages; and the method of recording time for part-time and temporary employees is a school based decision. Management s Response: The school secretary is not capable of entering hours for herself. The PeopleSoft system will not allow it. Her payroll backup entered her hours which the secretary logged on her calendar each day. The secretary oversees the morning care program in which many students arrive at 6:50 a.m. After being advised by the auditor in March 2009 that the director needed to provide the secretary with a swipe card, the secretary swiped her time each day beginning in March Since the district did not have written policies or procedures with regard to documenting temporary hours, both employees kept written records of their hours. (Please see page 8.) End of Report 6

11 Appendix Management s Response 7

12 Appendix Management s Response 8