Posted on Tue, Jul. 22, 2008
The state investigator charged with seeking out waste, mismanagement and fraud is reviewing the operation of the Cherry Hill schools, according to the district.
The review by the Office of the Inspector General follows an external audit, released in April, that found "significant internal control weaknesses."
The audit found, among other concerns, possibly questionable payments to school employees, instances of large raises and overtime costs, and a lack of standard operating procedures in payroll and human resources. KPMG, the auditor hired by the district, also found that some staff members were underqualified for their jobs and did not receive necessary training.
"The Office of the Inspector General with the encouragement and at the invitation of the Board of Education is conducting a review of district operations and business procedures," said a statement on the district's Web site.
The statement said the inquiry resulted from the findings of the KPMG audit, which was requested and paid for by the school board.
The district is cooperating with the review, according to the statement.
"We'll welcome whatever findings they bring forward," district spokeswoman Susan Bastnagel said.
A spokesman from the Inspector General's Office declined to elaborate on the review.
The original $197,000 audit found that "the district does not have effective internal controls over financial reporting" and added that the administrative problems are created, in part, because records are not adequately maintained and data "cannot be relied on for completeness or accuracy."
Among the problems:
1,569 employee records with missing information.
Hundreds of employees who received more than the standard 26 paychecks per year.
1,070 purchases where the invoice exceeded the order, by a combined $1.97 million.
16 employees whose district termination dates came after they had died.
Cherry Hill has a roughly $170 million general-fund budget.
KPMG reviewed district spending between July 1, 2005, and June 30, 2007. The audit, which began in October, was sent to the district in March.
Bastnagel said the audit was prompted by the significant turnover in district leadership, including a new superintendent in 2006 and a new business administrator who started last summer and has since left, creating another change.
The audit recommended buying updated software to help manage the district and hiring additional administrative staff, along with developing "standard operating procedures" that would deliver consistency and help control risks.
The audit noted that all the improvements would require "a significant amount of financial resources."
Bastnagel said the district has tightened internal controls, in line with the audit recommendations, and has made acquiring new software a "top priority."
The district also is adding staff, as recommended, Bastnagel said.
Contact staff writer Jonathan Tamari at 609-989-9016 or jtamari@phillynews.com.
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