A new state legislative audit of the Carroll County school system's financial management listed 22 recommendations to tighten controls and increase oversight, calling for immediate attention and reforms to certain practices.
The audit comes just weeks after two Carroll financial secretaries were found guilty of stealing more than $220,000 from school accounts.
Released this month, the report included among more urgent areas the need for adequate, effective internal controls systemwide, as well as greater oversight and monitoring of student-activity funds, transportation services, credit-card spending and contracts.
The report marks the "first and only time" such an audit has been conducted for the school system, said Bruce Myers, legislative auditor. It was performed to comply with a state law that requires such a review of all 24 school systems over a six-year period.
"We find a lot of these issues in the different school districts, so we're not picking on Carroll County," Myers said.
Carroll school officials were in Annapolis yesterday for a review of its audit.
In making the case for more internal controls, auditors pointed to the potential for unauthorized transactions in wire transfers, to which a couple of employees have "unlimited access" for payments, according to the report. The auditors noted a "complete lack of controls" over employee credit-card use, highlighting as an example one cardholder's unexplained purchases at restaurants and grocery stores during a two-year period.
"We had several concerns with the credit cards," Myers said.
The auditors suggested a cost-benefit study of the system's transportation services, which are not county-owned. In some cases, the system could be paying bus contractors more than necessary, Myers said, mentioning the audit's estimate of a potential $4 million in excess payments.
However, the auditors praised the system's use of staggered schedules to allow for multiple school-bus runs, along with cost-saving techniques for food supplies. They noted that, among the nine state school system audits performed or in progress, Carroll was the only system to volunteer to be scheduled for its review.
In response to a draft version of the audit, Carroll school officials wrote that they had requested funds in the proposed 2007-2008 budget for two more accountants and an accounts-payable clerk to address internal-control concerns.
Also, the system plans to ask for more detailed information on contracts, develop a credit-card manual and impose limits on employee card purchases, its response said.
Some of the recommendations sprang directly from incidents involving two school financial secretaries. Wendy Sue Bowers, formerly of South Carroll High, and Linda Sprinkle, who worked at Shiloh Middle, were found guilty of felony theft in separate cases last year.
Both secretaries had been accused of siphoning funds from school-based accounts, including student fundraisers.
The system has proposed new procedures for such accounts. Financial secretaries would be asked to make more frequent deposits of money for school-based accounts, and a new intranet Web site would allow principals and account owners to monitor transactions and balances.
"It wasn't a surprise," Stephen Guthrie, assistant superintendent of administration, said of the audit's comments. "Those paralleled our own investigations."
The reforms are to go into effect next month after training for financial secretaries and club advisers, Guthrie said.
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