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Fraud protections now in place at Kenston
Fraud protections now in place at Kenston
By SUE HOFFMAN
The performance audit of the Kenston School District released by Auditor of State Mary Taylor last week confirmed that the district has implemented changes to reduce the risk of fraud.
The audit, released Aug. 12, listed 10 changes that the district has implemented "that strengthen its internal control structure and accordingly help reduce the risk of future fraudulent acts."
Among the changes, the audit noted that the district has separately assigned cash disbursements, posting expenditures and reconciling bank accounts to three different employees. Other changes relate to procedures for the receipt of bank statements, the use and security of manual checks, bank account reconciliations, journal entries and the preparation of checks.
The audit also gave three recommendations relating to employee bonds and insurance, purchase orders and student accounting.
School Superintendent Robert A. Lee said the several-month audit was "a valuable thing to go through. There was daily dialogue about how we do things, which goes beyond this report. We're happy with the work they did." He said the auditors were professional and thorough, talking with people in all of the departments.
The Kenston School Board requested in February that the Ohio Auditor's Office perform an internal control audit of the fiscal operation. The special audit was in addition to the district's 2009 fiscal audit. The audit focused on changes the district made after discovering fraud last summer, and gave additional recommendations.
The board's audit request followed the indictment of former assistant treasurer Geraldine Kanieski in connection with the theft of nearly $135,000 from the school district. Mrs. Kanieski has since pleaded guilty to theft in office in connection with the fraudulent cashing of checks and is serving a two-year prison term. She also was ordered to pay full restitution of $137,356 and fined $2,500.
The audit's first recommendation was to "review the amounts and costs of the employee bonds and insurance." The audit recommended a higher limit than $50,000 in liability insurance for "employee dishonesty, computer fraud, forgery and money in and out."
In their letter responding to the audit, Dr. Lee, Treasurer Linda Hein and school board President Anne Randall said the school board approved in June a new liability dishonesty policy for theft that increased limits to $250,000.
The audit's second recommendation regarded the use of blanket purchase orders "to comply with fiscal officer certification requirements ... increase efficiency in the purchasing process and ensure purchase orders are issued prior to making purchases." The recommendation includes a written policy regarding the purchase of items costing under $25,000.
School officials said the school board added policy guidelines that all purchases above $6,000 and less than $25,000 must have at least three price quotations. For purchases over $25,000, board policies already exist that specify the purchasing process in accordance with Ohio Revised Code, they said.
Dr. Lee said it will take most of the school year to transition to new procedures on purchase orders, since it involves training many staff members.
The third audit recommendation was to train employees to fully use the state's student information systems software for student accounting, which would eliminate parallel bookkeeping systems.
"The treasurer has begun the process of implementing the procedures recommended by the performance audit and will complete the training and changes by the end of the 2010-2011 school year," school officials said in their response letter.
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