This chapter reviews the financial management and purchasing functions of the Venus Independent School District (VISD) in the following sections:
- Organization and Management
- Planning and Budgeting
- Accounting and Payroll
- Tax Collections
- Purchasing Operations
- Contract Management
C. ACCOUNTING AND PAYROLL
Financial accounting and reporting provides information to determine whether current-year revenues were sufficient to pay for current-year services. Financial accounting and reporting demonstrates whether an organization obtained and used its resources in accordance with the entity’s legally adopted budget. It also demonstrates compliance with other finance-related legal or contractual requirements. Financial reporting provides information to assist users in assessing the service efforts, costs and accomplishments of a governmental entity.
VISD’s Business Office coordinates the accounting and reporting functions. The district’s RSCCC software provides a general ledger, subsidiary ledgers and comparative audited financial reports for both the current period and the year to date. In addition, the financial software includes a requisition and encumbrance module.
RSCCC software produces the information VISD needs to fulfill TEA’s financial reporting requirements, including the reporting of financial information for PEIMS as required by TEC §42.006. The system also accounts for revenues and expenditures based on FASRG’s fund, function, object, cost center and program intent codes.
Payroll must be accurate, as it represents the district’s largest budgeted expenditure. Many guidelines and laws govern payment to employees. VISD prepares one payroll for 252 employees plus substitutes on a monthly basis. The superintendent’s secretary handles the payroll processing and reporting function. According to the organization chart the board approved in March 2003, the payroll function will move under the supervision of the business manager. The district uses RSCCC to process payroll and related reports. The system was written specifically for school districts; therefore, it can generate pay and Teacher Retirement System (TRS) reports. It also generates account distribution reports and automatically interfaces to the accounting system.
The district does not segregate certain duties and functions. The superintendent’s secretary enters employee information in both the personnel and payroll modules of the software system. This creates an internal control weakness because the same individual who establishes an employee in the system can also approve payments to that employee.
Proper internal controls dictate a separation of duties to prevent potential abuse of district policies, even in a small district. Appropriate internal controls prevent problems, such as payments to nonexistent or terminated employees. The separation of duties not only protects the district from abuse, it also protects the employees involved. The PEIMS coordinator currently assists the coordinator of Curriculum and Special Programs with personnel duties. The district does not have a Human Resources Department or administrator.
Reassign personnel duties to the PEIMS coordinator to provide for proper separation of duties.
The district should reassign personnel duties that include establishing employees in the system and making changes to their pay or their pay status (such as active or terminated) to the PEIMS coordinator. The superintendent’s secretary should continue to handle payroll processing. This will provide the necessary separation of duties.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The business manager, the superintendent and the director of Operations, Maintenance and Transportation determine the duties they will reassign to provide for proper separation of duties. September 2003 2. The superintendent’s secretary trains the PEIMS coordinator on data entry in the personnel system. October 2003 3. The business manager develops written procedures covering the new duties, including backup, cross training, forms and approvals necessary to enter a new employee or changes into the personnel system. October 2003 4. The business manager transfers selected duties to the PEIMS coordinator. October 2003
This recommendation can be implemented with existing resources.
The district does not follow board policy when granting local leave to employees and paying employees for unused local leave each year.
The employee handbook and the district’s practice of paying for unused leave both conflict with board policy. The superintendent’s secretary reported that the district grants employees five days of leave each school year in addition to the days granted by the state. VISD refers to this leave as local leave. The district pays employees with unused days for the days at year-end. Board Policy DEC (Local) states, “All employees shall earn one workday of local sick leave per school year.”
The board voted to increase personal local leave from one day to five days on July 20, 2000. The increase in days did not include a provision to pay employees for the unused days at the end of August. The district, however, continues to pay employees for unused local leave at year-end. In addition, the district’s employee handbook states that employees earn five days of local leave annually and describes the practice of paying the employees.
Follow board policy regarding personal leave.
VISD should grant employees five days of local leave, but should not compensate them for unused local leave days. The district also should update the employee handbook to reflect board policy.
IMPLEMENTATION STRATEGIES AND TIMELINE
1. The superintendent and business manager notify employees that the district will follow Board Policy DEC (Local) by granting five local leave days each year and discontinuing payments for unused local leave. September 2003 2. The superintendent directs the correction of the district employee handbook to comply with Board Policy DEC (Local). October 2003 3. The business manager trains the superintendent’s secretary on the leave policy and ensures that it is followed. October 2003
In 2001-02, the district paid employees $11,355 for unused local leave. VISD can expect savings of $11,355 annually from this recommendation.
Recommendation 2003-04 2004-05 2005-06 2006-07 2007-08 Follow board policy regarding personal leave. $11,355 $11,355 $11,355 $11,355 $11,355