Review of Student Activity Funds 2009 Tuition Summer School Program June 1, 2009 through August 11, 2009

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1 Memorandum Internal Audit Services DATE: December 8, 2009 TO: School Board Members City of Richmond, Virginia Yvonne Brandon, Ed.D. Superintendent FROM: Debora R. Johns, CGAP Chief of Internal Audit SUBJECT: Review of Student Activity Funds 2009 Tuition Summer School Program June 1, 2009 through August 11, 2009 The management report on the review of the 2009 Tuition Summer School Program is attached. The report includes our findings, recommendations and management response. If you have any questions or comments, please call me at c: Victoria Oakley Chief Academic Officer

2 School Board of the City of Richmond, Virginia Richmond Public Schools Internal Audit Services 2009 Tuition Summer School Program June 1, 2009 August 11, 2009 Audit Assignment No.: A December 8, 2009

3 Memorandum Internal Audit Services T O : FROM: D r. Y v o n n e B r a n d o n S u p e r i n t e n d e n t Debora R. Johns, CGAP Chief of Internal Audit Services DATE: December 7, 2009 SUBJECT: 2009 Tuition Summer School Programs Assignment No. A As a part of our approved Fiscal Year 2009 audit plan, Internal Audit Services completed the review of the summer school program registration process. Our review was performed in accordance with the International Standards for the Professional Practice of Internal Auditing. The review covered the period of June 1, 2009 through August 11, The purpose of our review was, but was not limited to, the following objectives: to review the pre-registration, registration and post registration process to ensure that all established procedures were followed; to verify and reconcile all collected funds; and to recommend appropriate corrective action if needed. Background The 2009 Tuition Summer School Program was offered at the high school level. Students had the opportunity to earn one (1) unit of credit towards a course for promotion or for graduation. The courses offered included mathematics, english, algebra, earth science, history, computer programming, etc. The tuition rate for high school tuition was $ for city residents and $ for non-resident students. The high school tuition programs were located at Armstrong High School and Huguenot High School. Administration submitted a budget for the tuition programs to the School Board, which was approved. The tuition high school budget was $70, The majority of tuition revenue was cash collections. The total tuition revenue collected for summer school during registration was $53,020 of which 81% was cash and 19% were money orders/certified checks. We observed the collection of funds and verified the reconciliation of receipts to the bank deposits. We reviewed whether receipts were deposited in the amount received and in a timely manner. In addition, we reviewed internal controls to ensure that an adequate system was in place to safeguard collections. We also tested compliance with established administrative procedures.

4 Audit Conclusions: Registration T h e D i r e c t o r o f I n s t r u c t i o n c o n d u c t e d s u m m e r s c h o o l r e g i s t r a t i o n o n J u n e 1 s t a n d 1 5 t h a t t h e A r t h u r A s h e C e n t e r. T h e i n i t i a l r e g i s t r a t i o n p r o c e s s, a s a w h o l e w a s s m o o t h w i t h n o m a j o r d i s r u p t i o n s. I n a p r e -r e g i s t r a t i o n m e e t i n g, t h e D i r e c t o r o f I n s t r u c t i o n d i d a n e x c e l l e n t j o b o f i n f o r m i n g s t a f f o f s u m m e r s c h o o l r e g i s t r a t i o n p r o c e d u r e s. T h e s t a f f w a s f u r n i s h e d s u m m e r s c h o o l i n f o r m a t i o n p a c k e t s w i t h d e t a i l e d i n f o r m a t i o n. T h i s r e g i s t r a t i o n p r o c e s s w a s u s e d f o r t h e f i r s t t w o d a y s. A d d i t i o n a l r e g i s t r a t i o n f o r t u i t i o n h i g h w a s h e l d o n J u n e 2 2 n d a n d J u n e 2 3 r d a t A r m s t r o n g a n d H u g u e n o t H i g h S c h o o l s w i t h o n l y 2 p e r s o n s h a n d l i n g a l l a s p e c t s o f t h e r e g i s t r a t i o n p r o c e s s. A f e w s t u d e n t s r e g i s t e r e d f o r s u m m e r s c h o o l a f t e r t h e i n i t i a l f i r s t t w o d a y s o f s c h o o l b y g o i n g d i r e c t l y t o t h e D e p a r t m e n t o f I n s t r u c t i o n. R e v e n u e T h e t o t a l a c t u a l r e v e n u e f o r y e a r i s a s f o l l o w s : D e p o s i t s f r o m R e g i s t r a t i o n $ 5 3, T u i t i o n P a i d t o D e p a r t m e n t o f F i n a n c e $ T o t a l T u i t i o n R e v e n u e $ 5 3, L e s s : R e f u n d s ($ 1, ) N e t R e v e n u e $ 5 2, A d d : W a i v e r s D u e $ 9, A d d : A c c o u n t s R e c e i v a b l e s D u e $ T o t a l R e v e n u e $ 6 1, Waivers Each year agencies agree to be responsible for the summer school tuition of selected students. A pre-coded copy of a departmental invoice or a letter from the agency must accompany students when they are registering for summer school. The Department of Finance issues bills to all agencies for the outstanding tuition. As of August 11, 2009, Richmond Public Schools is still due $250

5 from the Department of Social Services, $250 from Home Again, and $8,750 from Project Graduation. Recommendation: The Director of Instruction should submit to the Department of Finance any invoices or letters for waivers received. The Department of Finance must continue to bill all agencies for waivers as well as be responsible for contacting the agencies to determine the status of any outstanding payments. Management s Response: Project Graduation is a reimbursement based grant from the Virginia Department of Education (VDOE) funded from Lottery Proceeds. Payments for the 2009 Project Graduation Summer Academy Grants will not begin until January 16, 2010 following the Lottery deposit in December. Accounts Receivable The Director of Instruction approved partial payments from parents. As of August 11, 2009, Armstrong High School has $ of accounts receivable that is outstanding. Recommendation: The Director of Instruction has been provided the name of students that still owe for tuition and should collect the balances due. Management s Response: I concur. Budget Development The Director of Instruction is responsible for developing the summer school budget each year. We commend the Director of Instruction on analyzing the budget each year and making adjustments based on the number of students enrolled in order to reach the projected budget amount. The fund balance for the program is shown below: Adopted Budget Actual Tuition High-Revenue $70, $61, Contra Revenue (Expense Refund) ($3,000.00) $0.00 General Fund Transfer* $46, $0.00* Total Revenue $113, $61, Expenses $113, $110, Fund Balance $0.00 ($48,438.63)* *Pending General Fund Transfer: The general fund transfer of $46, has not been posted to the summer school account. However, an additional $2, is needed to balance the budget.

6 Recommendation: The Director of Instruction should continue to perform an analysis of the summer school budget and take into consideration remedial programs that have an impact on revenue received. Management s Response: I concur. cc: Mrs. Victoria Oakley, Chief Academic Officer