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STATE OF GEORGIA 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
 
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RANDOLPH COUNTY BOARD OF EDUCATION 
CUTHBERT, GEORGIA MANAGEMENT LETTER 
AUGUST 6, 2003 
Russell W. Hinton State Auditor 
 
 ROSSELL W. HINTON 
STATE AUDITOR 
1404) 656-2174 
 
DEPARTMENT OF AUDITS AND ACCOUNTS 
EDUCATION AUDIT DIVISION 
254 Washington Street, S.W. Suite 214 Atlanta, Georgia 30334-8400 
August 6, 2003 
 
RONALD E. WATSON 
DIRECTOR 
(404) 656-2180 
 
The Honorable Henry Cook, Chairman 1208 Andrew Street Randolph County Board of Education Cuthbert, Georgia 31 740 
 
Dear Sir: 
We have completed our examination of the financial statements of the Randolph County Board of Education for the year ended June 30, 2002, and have issued our report thereon dated July 8, 2003. That report should be read in conjunction with the comments in this letter. The purpose ofthis letter is to communicate to you items we encountered during this audit that we felt should be brought to your attention. A discussion of our observations and recommendations for improvement are as follows: 
 School District policy requires users of the School District's buses and/or equipment to provide $10,000.00 of insurance coverage for the period of usage. There was no documentation available of community users providing insurance as required by School District policy. We recommend that procedures be implemented to ensure compliance with School District policy. 
 A review of student activity accounts maintained at the Randolph County High School revealed that donations were being collected for a charitable golftournament sponsored by a vendor who conducts business with the School District. The collected donations are turned over to the vendor. The School District has a fiduciary responsibility to ensure the accountability of funds collected in the School District's name. We recommend that procedures be implemented to request and review documentation for collections from all sources and review disbursements in connection with the golftournament to ensure that the funds collected in the School Districts name are properly accounted for and used for the intended purpose of the donors. 
 A review of documentation supporting after school program equipment purchases, for the Teen Center, revealed an expenditure of $869.95 for a sofa and love seat to be used in a school play. Our procedures further revealed the sofa and love seat were returned, after being used in the school play, for credit from the vendor. To date, the School District has utilized all but $35.41 of the credit. The School District's accounting records revealed no activity reflecting return of the items purchased or the subsequent issuance and usage ofthe 
 
 vendor credit. We recommend that the School District implement policies and procedures to ensure vendor credits received for returned purchases are properly recorded as receivables and reductions of expenditures in the formal accounting system, and we further recommend that activity pertaining to usage of credits be properly recorded in the formal accounting system. 
 Our review of School District policies did not identify a Board policy for competitive bids as a prerequisite for purchases. The School District does obtain competitive bids primarily in relation to major construction projects. Current practice of the School District is for the Superintendent and at least one other employee to be present for these bid openings. In the case of construction bids, the architect is also expected to be present. We recommend that a written policy on competitive bidding be established and approved by the Board, indicating the dollar level above which competitive bids must be obtained. 
In addition to the above matters pertaining to the year ended June 30, 2002, we noted certain matters involving internal control and other operational matters subsequent to June 30, 2002, that are presented for your consideration. These matters are considered reportable conditions that, unless corrected by the School District, will be reported as findings in our audit of the Board's financial statements for the year ending June 30, 2003. Matters pertaining to period ending June 30, 2003 are as follows: 
 During our discussions with after school program personnel, we discovered a previously unidentified petty cash fund in the custody ofthe After School Program's Director at the Teen Center. A count ofthis petty cash fund revealed $152.45 ofcash on hand which had not been recorded in the School District's accounting records. The After School Program's Director stated that these funds were collected from food sales generated during the July 4, 2003 holiday celebration, sponsored by the School District. Adequate documentation was not available to determine the actual amount of funds collected during this event. This is a serious weakness in the system of internal controls and this opens the way for the possibility ofnot only unapproved but fraudulent use of funds. We strongly recommend that procedures be established to ensure all funds collected are properly documented, deposited in School District bank accounts, recorded in the formal accounting records and used only for approved purposes. 
 A review of activity subsequent to June 30, 2002, disclosed a "salary enhancement" of $10,000.00 given to an employee for the purpose ofpurchasing employment years, to enable the employee's early retirement, from the Teacher Retirement System of Georgia. This appears to be gratuitous, as no additional work was required to be performed, and the only considerations noted as given by the employee pertains to the release from any future legal action against the School District and the foregoing of various employment issues. The School District should consult legal council to determine if reimbursement of these funds should be requested from the individual for deposit to the School District's general operating account. 
 
  A review of amounts charged for architectural work performed during fiscal year 2003 appeared to be excessive in relation to the type of services provided. Based on an amended architectural agreement, signed on September 10, 2002, the architect was to receive approximately $34,000.00 for support and consultation services in connection with on site assessments ofexisting buildings and grounds owned by the School District. In addition, the architect is also scheduled to receive 20% or approximately $110,529.00 for contract administration services on contracts totaling $552,645.00. These contracts include $207,442.00 for furniture and accessories, $109,754.00 for a security system, $137,449.00 for an intercom system and $98,000.00 for various repairs and improvements. A 20% contract administration fee for the above work appears to be excessive for the type of services provided. We recommend that the School District contact the architect and inquire about obtaining a reduced rate on these fees. 
We believe that the implementation of these recommendations will provide the Randolph County Board of Education with a stronger system of internal accounting control while also making its financial operations more economical and efficient. We will be happy to discuss the details ofthese recommendations with you. This report is intended solely for the information and use of the members of the School District, management, and others within the School District and is not intended to be and should not be used by anyone other than those specified parties. 
Randal L. San ers, CPA, CFE, CGFM Deputy Director