Documents › Board of Education, 2026-04-21

report 7 pages

Also attached to this agenda item: Internal Audit Report on Revenue and Cash Management... CY25-FY26 CHUFSD Risk Assessment FINAL (228 KB)

Croton-Harmon Union Free School District Report on Revenue and Cash Management For the Period Ended December 31, 2025 CROTON-HARMON UNION FREE SCHOOL DISTRICT Report on Revenue and Cash Management For the Period Ended December 31, 2025 R.S. Abrams & Co., LLP – Accountants & Consultants for Over 75 Years TABLE OF CONTENTS Page: Executive Summary 1 Overview, Procedures Performed, Observations, and Recommendations 2 – 5 Corrective Action Plan 5 Robert S. Abrams (1926-2014) Marianne E. Van Duyne, CPA Alexandria M. Battaglia, CPA Brendan Nelson, CPA Christopher Schneider, CPA ISLANDIA: 3033 EXPRESS DRIVE NORTH, SUITE 100 • ISLANDIA, NY 11749 WHITE PLAINS: 50 MAIN STREET, SUITE 1000 • WHITE PLAINS, NY 10606 PHONE: (631) 234-4444 • FAX: (631) 234-4234 www.rsabrams.com Board of Education Croton-Harmon Union Free School District 10 Gerstein Street Croton-On-Hudson, NY 10520 We have been engaged by the Board of Education (the “Board”) to provide internal audit services to the Croton-Harmon Union Free School District (the “District”) with respect to the internal controls related to the revenue and cash management operations for the period ended December 31, 2025. The objective of this engagement was to evaluate the efficiency, effectiveness, and compliance of the District’s internal controls related to revenue and cash management with relevant policies, procedures, and regulatory requirements, where applicable. Our procedures were not designed to express an opinion on internal controls related to revenue and cash management, and as such, we do not express such an opinion. Our evaluation of the District’s revenue and cash management operations identified areas of strength as well as opportunities for improvement. By implementing the recommended improvements, the District can further enhance the efficiency and effectiveness of its revenue and cash management operations. The results of our procedures are presented on the following pages. This report is intended solely for the information and use of the Board, the Audit Committee, and the management of the District and is not intended to be and should not be used by anyone other than those specified parties. We would like to acknowledge the courtesy and assistance extended to us by personnel of the District. We are available to discuss this report with the Board or others within the District at your convenience. Our observations and recommendations are directed toward improvement of the system of internal controls and should not be considered a criticism of, or reflection on, any employee of the District. Very truly yours, R.S. Abrams & Co., LLP April 9, 2026 CROTON-HARMON UNION FREE SCHOOL DISTRICT Report on Revenue and Cash Management For the Period Ended December 31, 2025 R.S. Abrams & Co., LLP – Accountants & Consultants for Over 75 Years 2 OVERVIEW, PROCEDURES PERFORMED, OBSERVATIONS, AND RECOMMENDATIONS AREA: CASH RECEIPTS AND REVENUE Overview: The District collects revenue from various sources, including, but not limited to, property taxes, state and federal aid, tuition charges, insurance reimbursements, PILOT payments, donations, vending commissions, and student activity fees. Mail-based payments are opened and logged by the Superintendent’s Assistant, deposited by the Treasurer through Chase’s remote deposit system, and recorded in nVision by the Account Clerk. Electronic receipts such as state aid, BOCES surplus payments, and federal grant funds are monitored daily by the Treasurer. The District also collects certain fees through the ParentSquare online payment platform. Procedures Performed:  Reviewed Board of Education (the “Board”) policies and administrative procedures related to cash receipts and revenue to understand the District’s control framework.  For receipts requiring Board authorization, such as donations and grants, reviewed whether they were approved prior to being recorded.  For revenue collected through online payment platforms, reviewed whether the District retains transaction-level detail that reconciles individual payments to total deposit amounts.  Assessed segregation of duties across the receipt logging, deposit, and general ledger recording functions to confirm no single individual controls the entire cash receipt process and that appropriate reviews and approvals are provided within the process.  For receipts processed via wire transfer or ACH, reviewed whether the District retains evidence of the transfer and that entries are recorded in nVision.  Selected a sample of 15 cash receipts from the nVision cash receipt query covering the assessment period and reviewed supporting documentation for each, including check remittances, grant award letters, Board resolutions, and insurance correspondence.  For each receipt selected, reviewed whether the transaction was recorded to the proper fund and revenue account code in accordance with the NYS Uniform System of Accounts for School Districts. Recommendations: No observations or recommendations were noted. *** AREA: ACCOUNTS RECEIVABLE Overview: The District records receivable balances in nVision when earned/billed and tracks them by source. The Account Clerk monitors balances and follows up on past-due amounts. Management evaluates collectability by reviewing aging reports and historical collection trends. CROTON-HARMON UNION FREE SCHOOL DISTRICT Report on Revenue and Cash Management For the Period Ended December 31, 2025 R.S. Abrams & Co., LLP – Accountants & Consultants for Over 75 Years 3 No significant collection issues or disputed receivables were reported during the assessment period. Procedures Performed:  Inquired of management regarding the methods used to record, track, and age receivable balances in the accounting information system.  Assessed management's review of aging schedules and the procedures in place for following up on past-due balances.  Evaluated the District's assessment of collectability of receivables and the methodology used to determine whether an allowance for uncollectible amounts is necessary, including review of historical collection trends and specific account circumstances. Recommendations: No observations or recommendations were noted. *** AREA: WIRE TRANSFERS Overview: The District processes wire transfers for several expenditure types, including, but not limited to, debt service, equipment leases, benefit remittances, and investment transfers. In order to establish appropriate segregation of duties, the District’s process is set up such that the Treasurer initiates transfers through the Chase banking platform, the Assistant Superintendent for Business approves, and the Treasurer releases. This dual-control workflow is governed by Board Policy 6410, Authorized Signatures, and configured accordingly within the online banking system. Procedures Performed:  Selected a sample of 10 wire transfers processed during the assessment period and reviewed the relevant supporting documentation for each, including invoices, lease agreements, and debt service schedules.  For each transfer, reviewed whether approval was provided by an individual independent of the initiator by reviewing the Chase audit trail.  Traced all transfers to the corresponding Chase bank statements, confirming dates and amounts, and agreed each to the general ledger posting in nVision.  Assessed the completeness and accuracy of wire transfer records maintained by the District.  Reviewed the Chase banking permissions report to confirm that intiaition and approval capabilities for wire requests are limited to authorized personnel. Recommendations: No observations or recommendations were noted. *** CROTON-HARMON UNION FREE SCHOOL DISTRICT Report on Revenue and Cash Management For the Period Ended December 31, 2025 R.S. Abrams & Co., LLP – Accountants & Consultants for Over 75 Years 4 AREA: BANK RECONCILIATIONS, INVESTMENTS, AND REPORTING Overview: The District maintains 9 bank accounts at JPMorgan Chase and 11 investment accounts through NYCLASS, totaling approximately $45.3 million as of October 2025. Bank reconciliations are prepared monthly by the Treasurer and independently reviewed by supervisory personnel (Assistant Business Manager or Assistant Superintendent for Business). Approximately 69% of District funds are invested in NYCLASS accounts earning over 5% interest. Collateral adequacy is monitored monthly against the statutory requirements. Procedures Performed:  Reviewed all 20 bank reconciliations for October 2025 for evidence of timely preparation, independent supervisory review, and mathematical accuracy.  Reviewed whether all reconciliations were completed within 30 days of month-end.  Examined each reconciliation to confirm that ending bank balances reconciled to the book balance recorded in nVision after adjusting for deposits in transit, outstanding checks, and other reconciling items.  Traced ending bank balances on each reconciliation to the corresponding bank or custodial statement.  Reviewed outstanding check listings across all accounts and identified any items outstanding for more than one year.  Reviewed whether all deposits and investments are held at approved institutions per the District’s investment policy.  Reviewed the collateral reconciliation and compared pledged collateral to uninsured deposits to confirm the statutory coverage requirements are met.  Compared interest rates across all accounts to assess whether the District is actively investing in higher-yield instruments.  Assessed segregation of duties across cash management, banking, and reconciliation functions to ensure that individuals are assigned tasks that are consistent with their respective roles and responsibilities and that independent review and approval is provided, where necessary. Recommendations: No observations or recommendations were noted. *** AREA: BANKING CONTROLS AND SECURITY Overview: The District banks with JPMorgan Chase and limits platform access to six authorized users with role-based permissions. Authorized check signers are approved annually by the Board. The District reports that Positive Pay is enabled on all five check-issuing accounts, with daily exception reports sent to the Treasurer. The District Clerk serves as the Chase Security Administrator. CROTON-HARMON UNION FREE SCHOOL DISTRICT Report on Revenue and Cash Management For the Period Ended December 31, 2025 R.S. Abrams & Co., LLP – Accountants & Consultants for Over 75 Years 5 Procedures Performed:  Obtained and reviewed the Chase user permission report to identify all users with banking access and their assigned roles and responsibilities.  Assessed whether access levels are appropriate for each user’s position and whether segregation of duties exists across initiation, approval, and release functions.  Evaluated the District’s wire transfer limits to determine whether they are appropriate given the District’s bond anticipation note obligations.  Reviewed whether Positive Pay controls are enabled for all applicable checking accounts.  Reviewed whether authorized check signers are formally approved by the Board and supported by current Board resolutions.  Assessed procedures for adding, modifying, and removing banking access when personnel changes occur. Recommendations: No observations or recommendations were noted. *** CORRECTIVE ACTION PLAN The District is required to prepare a corrective action plan in response to any observations contained in the reports. As per Commissioner’s Regulation §170.12, a corrective action plan, which has been approved by the Board, must be submitted to the State Education Department within 90 days of the receipt of a final internal audit report. The District had no observations in this report and therefore, a corrective action plan is not required to be submitted.