This week the Audit firm of Rosner Brown Touchstone & Keller released their report of the operations of the Maintenance Department of the Sweetwater Union High School District that reflected a lack of control over the monies being spent by this Department.
The Audit was called for after it was reported that a certain employee in the Maintenance Department and a Maintenance vendor, American Asphalt and Concrete, Inc., may have been in collusion to defraud the District by overcharging for goods and services.
The Audit firm was not called in to determine whether or not fraud, or guilt, was committed in this instance but to take a look at the district’s system of internal controls for the procurement of goods and services was sufficient to reduce to a relatively low level the instances of fraud, and to look for other instances of fraud or other illegal acts. The scope of the audit was limited to the Maintenance Department and to the years ending June 30, 2004 and 2005.
The 12 page Audit report went on to report a multitude of findings and problems from simple stuff such as; the necessity of a time clock in the work place, open purchase orders where supplies were initially issued at $5,000 and later adjusted past $50,000 without review, and the purchase of experimental financial software from a company that went out of business two years later. The Audit Firm concluded that the District’s system of internal controls were not adequate enough to deter, to a relatively low level, the risk that fraud may occur.
The Auditing Firm provided recommendations to fix many of the problems presented and to the credit of the District many of the fixes had already been implemented and/or in the process of implementation. The District concurred with most of the conclusion found in the Audit report, which concurred with the District’s own internal report, with the exception of two instances.
The bottom line is that the Auditing Firm found many instances of unsound business practices that could make it easy for those who would be prone to take advantage of them. Now that this has been brought to light this only adds further fuel to the argument, that La Prensa San Diego suggested a couple of months ago: That the whole District be audited! An audit would bring to light business practices and internal controls that need to be changed in order for the District to be in firm control of their finances. Instances of fraud must be uncovered and then perpetrators who are exposed removed from their positions. In the past year alone, several instances of fraud and theft have been brought to light which exposed the District of significant lapses in internal controls, checks and balances.
With the District Board contemplating yet another multi-million dollar bond to be placed on the ballot, to complete the building and renovations that Prop. BB has come up short on with questionable expenses; the District needs to assure the Community that their financial house is in order before the voters give the District more money to squander.