The money that students raise for school clubs, dances and other student activities is apparently in some danger of being lost or improperly collected and spent.
As school districts published their annual audit reports recently, one of the most common problems flagged by those reports is a lack of proper accounting controls for Associated Student Body, or ASB, funds.
San Diego Unified School District’s annual audit explained how multiple schools lacked proper approval for ASB spending and made late deposits. Those findings were a slice of a larger internal audit of ASB funds the school district finalized in July, in which 17 out of 24 district schools were found to have commingled staff social funds with ASB funds in the same bank account.
That’s not supposed to happen, but similar problems have repeatedly surfaced in the district’s internal audits for years.
In June 2017, an internal audit of ASB funds in 10 San Diego Unified elementary schools found $62,396 of ASB money that was not properly documented and $60,103 that was not properly spent. Three of those schools used ASB money to pay for staff meals and snacks, school maintenance and other costs that are supposed to be covered by the school.
In April 2016, another internal audit of Clark Middle School’s ASB found that $2,560 of cash collected from merchandise sales was stolen or lost over a four-month period.
Internal audits have found that ASB funds have been used to pay for maintenance of the school website, teacher training, cork boards for posting students’ schoolwork and staff socials, even though ASB funds are raised by students and are supposed to only be used for the benefit of students.
ASB money also sometimes gets rolled over year to year repeatedly without being spent, meaning students are paying money that goes to pay for activities of children in later years — instead of their own activities.
“They get rolled over into the next year and the next year,” said County Treasurer Dan McAllister, chair of San Diego Unified’s audit and finance committee. “A backlog in monies builds up over time and that, to me, is not right.”
ASB internal controls was the only area in which San Diego Unified has had problems identified by an audit for each of the past nine school years.
When schools lack internal controls, it makes it easier for funds to be misappropriated or embezzled. One of the larger ASB investigations in recent years was completed by the San Diego County Grand Jury in 2010. It found that School of Creative and Performing Arts staff took all the students’ ASB money and used it for instruction-related equipment and supplies and gifts and a party for staff.
“The essence, for the school and other schools within the district, involves the mismanagement and misuse of ASB funds and the failure to implement district mandated internal financial controls for ASB funds,” the 2010 report read.
The problems are not limited to San Diego Unified. In Sweetwater Union High’s annual audit released recently and in the district’s previous two annual audits, auditors noted schools’ issues with failing to keep inventory of student store merchandise, deposit receipts in a timely manner and obtain proper approval for disbursing ASB cash.
“Every school district has issues with ASB,” McAllister said.
Even if school districts implement training or set extensive rules for handling ASB funds, these problems end up persisting partly because of turnover of ASB officers, principals and school assistants, auditors for San Diego Unified have noted. A 2017 San Diego Unified internal audit also noted that elementary school ASB funds are especially at risk because there was a lack of ASB training and elementary school ASB accounts are not used often. The decentralized nature of having many individual school ASB organizations within a school district likely contributes to the issue.
Auditors have recommended to school districts that they hold more frequent, district-wide training and develop ASB funding reference guides for elementary schools.
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