Professional Documents
Culture Documents
Greenwich Central School District: Claims Auditing
Greenwich Central School District: Claims Auditing
of the
N e w Y o r k S t a t e C o m p t r o ll e r
D ivision of Local Government
& School Accountability
Greenwich Central
School District
Claims Auditing
Report of Examination
Period Covered:
July 1, 2014 September 30, 2015
2016M-37
Thomas P. DiNapoli
Table of Contents
Page
AUTHORITY LETTER 1
INTRODUCTION 2
Background
2
Objective 2
Scope and Methodology
2
Comments of District Officials and Corrective Action
2
CLAIMS AUDITING
Recommendation
APPENDIX
APPENDIX
APPENDIX
APPENDIX
A
B
C
D
4
5
6
8
9
10
11
Introduction
Background
Objective
Scope and
Methodology
Comments of
District Officials and
Corrective Action
33
Claims Auditing
Education Law (Law) requires the Board to audit all claims before
they are paid, or to appoint a claims auditor to assume the Boards
powers and duties, to examine and approve or disapprove claims.
An effective claims processing system ensures that all claims are
subjected to an independent, thorough and deliberate review. Such
a review should ensure that every claim contains enough supporting
documentation to determine whether it complies with statutory
requirements and District policies and the amounts represent actual
and necessary District expenditures. In addition, it is important for
the Board to determine whether the claims are properly itemized and
supported and whether the District actually received the goods or
services described on each claim.
The Board appointed a claims auditor and adopted a claims auditing
policy to provide procedures for auditing claims. According to the
policy, the claims auditor must report directly to the Board on the
results of the audits of the claims. The claims auditor is required to
examine all claims listed on the warrant to determine whether there
is adequate evidence to support the Districts expenditure. The policy
also requires that valid claims against the District be paid by the
Treasurer only upon the approval of the claims auditor.
The clerk in the Districts business office receives invoices, date
stamps each invoice and submits them to a separate accounts payable
clerk. The accounts payable clerk prepares the claims packets, that
include support for the invoices,1 prints the warrant and provides
it and the claim packets to the claims auditor for audit. The claims
auditor initials each claim to indicate her approval and certifies the
warrant to authorize the Treasurer to pay the claims. After the claims
auditor provides the Treasurer with the claim packets and warrant,
the Treasurer then verifies the audit is complete and returns the claim
packets to the accounts payable clerk to process payments.
We found that the District needs to improve its claims auditing
process to ensure that all claims have been audited and approved by
the claims auditor before payment is made. Specifically, we found
that the claims auditor did not consistently audit all claims related
to the capital fund prior to payment. During our audit period, the
District paid 3,282 claims totaling about $40.3 million. We reviewed
151 claims totaling approximately $4.2 million (110 randomly
selected claims totaling $1.7 million and 41 judgmentally selected
The claim packets include the invoice, purchase order and packing slips (receiving
documentation).
1. The Board should ensure that the claims auditor audits all
claims prior to payment, unless they are statutorily exempt.5
These 41 claims consisted of 31 capital fund claims totaling $2.5 million and 10
general fund claims totaling $8,971. Refer to Appendix B for further information
on our sample selection.
3
31 capital fund claims and six general fund claims
4
The District contracted with this individual to complete the projects. District
officials also told us they relied on the architect and construction manager to
determine whether the capital projects had been completed according to the
contracts.
5
Claims that are statutorily exempt include those for postage and utilities.
However, exempt claims must be presented to the claims auditor after payment
for review and approval.
2
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APPENDIX A
RESPONSE FROM DISTRICT OFFICIALS
The District officials response to this audit can be found on the following page.
77
APPENDIX B
AUDIT METHODOLOGY AND STANDARDS
To achieve our audit objective and obtain valid evidence, we performed the following procedures:
We interviewed District staff and reviewed the procedures they used for processing claims.
We reviewed District policies and procedures related to claims processing.
We obtained a check disbursement list and traced the beginning and ending check numbers to
the canceled checks, and traced gaps in check numbers to the voided checks, to determine our
population for sample selection.
Using a computerized random sampling tool, we randomly selected 100 claim payments for
the period July 1, 2014 through June 30, 2015 and 10 claims paid for the period July 1, 2015
through September 30, 2015. Our testing included 76 general fund claims totaling $752,648,
seven school lunch claims totaling $14,660, three special aid fund claims totaling $8,151, two
capital fund projects totaling $505,294 and 22 trust and agency fund claims totaling $461,182.
We judgmentally selected 41 claims totaling approximately $2.5 million that were paid during
our audit period. Our judgmental sample included 31 capital fund claims totaling $2.5 million
and 10 general fund claims totaling $8,971. In our judgmental sample, we included those
claims that were paid with manually signed checks and checks that were dated prior to the
warrant date upon which they appeared.
We examined the selected claims to determine whether they contained sufficient evidence
to determine whether they were audited by the claims auditor before payment and adequate
supporting documentation. We also determined whether they were accurate and valid and
legitimate District expenditures. In addition, we examined the related canceled checks and
warrants to ensure consistency with the claims.
We conducted this performance audit in accordance with GAGAS. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions based on our audit objective. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objective.
APPENDIX C
HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT
To obtain copies of this report, write or visit our web page:
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APPENDIX D
OFFICE OF THE STATE COMPTROLLER
DIVISION OF LOCAL GOVERNMENT
AND SCHOOL ACCOUNTABILITY
Andrew A. SanFilippo, Executive Deputy Comptroller
Gabriel F. Deyo, Deputy Comptroller
Tracey Hitchen Boyd, Assistant Comptroller
10