Audit faults bookkeeping at Wellesley schools’ business office

The audit examined six of the school system’s 18 programs that collect fees or revenue, and found numerous examples of missing control procedures for dealing with checks and cash, as well as slow reporting by the business office.

No misappropriation was uncovered by the review, which was requested by the town’s Audit Committee with the support of the School Committee and conducted by independent accountants from Powers & Sullivan. However, the report found a lack of “adequate monitoring or analytical procedures being applied to the management of the various revenue cycles of the schools.’’

The audit “didn’t find money that was gone or something that was out of balance, but the system in place wouldn’t detect that if it was,’’ said Rusty Kellogg, the Audit Committee’s chairman. “The system that’s there in place processes transactions, but it doesn’t control or manage them in a way that would find out if something was egregious.’’

On Tuesday, the School Committee will hold a public meeting to discuss updates on the food service accounts, and to review the audit and the progress made in addressing the problems it found.

Superintendent Bella Wong said that she hopes also to announce plans for a more extensive review of the business office that would focus on whether more resources are needed to close gaps in record keeping and provide oversight of the office’s day-to-day operations.

“We’re working with our department heads to shorten the time for reporting, exchange of funds, and reporting back and forth from the business office to the departments,’’ said Wong. “They are working at a very high level. Can we be more responsive? We would hope that the business office would be more responsive. I don’t know that it’s the fault of the staff that are there.’’

Wong said that the issues uncovered by the audit are not serious and that correcting them is a matter of “tightening up of accounting’’ in the office, which is headed by business manager Ruth Quinn Berdell.

“There’s room for improvement,’’ Wong said. “We would acknowledge that.’’

Berdell did not respond to a request for an interview, and Wong said she was handling all news media requests.

The audit comes on the heels of the district’s discovery in March that it was owed about $169,000 in lunch money that an outdated software system had failed to bill parents correctly for, either sending out incorrect bills or no bills at all. Wong said much of the money has been collected, and a new payment system has been put in place this year.

The audit looked at accounts in the business office that deal with outside sources of funding: specifically, money coming in to the school district from families. The middle and high school athletics program, the performing arts program, the Child Lab Program, the collection of high school and middle school activity fees, and the processing of school gifts were all audited.

In all of these accounts, teachers and program directors collected payments in cash and checks for fees, ticket sales, or, in the case of the Child Lab Program, tuition payments, and turned them over to the business office, which recorded their receipt and turned them over to the town treasurer. Department heads and teachers kept their own records of payments, and payments submitted to the treasurer were entered into an accounting system called Munis.

The outside auditors said that “reporting from the Business Office back to the departments is not occurring on any regular basis,’’ and that “some departments indicated that it wasn’t happening at all.’’

In the athletic department, for instance, the last time the business office reported back to the athletic director was Feb. 12, 2009, according to the audit.

Auditors also found that cash and checks were being turned over to the business office “in a variety of formats, and many seem very informal.’’

For example, the tuition for youngsters enrolled in the Child Lab Program, a preschool run out of Wellesley High School, is $5,000, or $4,800 if a child is attending half-days on Wednesdays. The audit found that tuition collection was up to teachers, who sent payments to the business office. The audit found that these turnovers “simply consisted of a note from the teacher asking the business office to ‘deposit these checks’; no detail was provided with the checks.’’

When auditors attempted to document the revenue recorded through the Munis software program as of March from Child Lab tuition payments, which they expected to be around $90,000 as there were 18 children in the program, they were only able to find records for $48,130. They were not able to obtain any control sheet listing how many children’s families had paid for their spot in the program, though Wong said the department head keeps records of payment.

Eventually, according to the audit, Berdell informed auditors that $88,000 had been collected as of July. Wong says the discrepancy arose from the incremental system of payment by parents.

Student activity fees collected by the middle school were given to the business office in a similarly informal manner - “just a stack of checks along with a quick note indicating that these are Student Activity Fees,’’ according to the audit.

Auditors also found “no process in place to reconcile these fees to what is recorded in Munis or any reporting between the departments.’’ The auditors were unable to obtain a master list of students who had paid their fees.

In the athletic and performing arts departments, too, auditors found minimal oversight of collected payments.

Tickets for athletic events, for example, were collected almost entirely in cash at each game. The athletic director was the only person with access to ticket boxes and ticket control sheets, according to the audit.

Evan Allen can be reached at evannn524@gmail.com.