District audit one of its best

Published May 27, 2009

By Patrick E. Litowitz
New Castle News

The New Castle Area School District is making progress.

That’s the assessment of Superintendent George Gabriel following the most recent examination of the district by the state auditor general.

Past district audits focused on deficiencies, irregularities and operational issues within the system. The auditor general’s office targeted areas such as the district’s travel policy, late financial filings and its transportation contract in a report covering the 2002-03 and 2003-04 school years.

Those problems have been addressed to the state’s satisfaction.

Although assessed with three findings and one observation, the latest review of district operations is one of its best efforts. The state released its audit, which spanned October 2005 to July 2008, to the public last week.

"In the past, we’ve seen findings much more severe in nature," Superintendent George Gabriel said. "That to me shows there has been progress made in this district.

"Audits are learning experiences for districts. When a finding is called to our attention, we respond immediately and corrective action is taken immediately."

Overall, the district received approximately $74,000 more than it was entitled. Those monies covered two findings. The third matter covered the district’s transportation provider, First Student, which was formerly known as Laidlaw.

New Castle has repaid approximately $55,000 to the state for incorrectly reporting the wages of employees paid with federal funds. The state reimburses school districts a portion of Social Security and Medicare taxes when its employees receive their pay through state grants. However, that provision does not apply to employees who earn salaries through federal programs.

In New Castle’s case, the issue involved the Individuals with Disabilities Education Act. Although it’s a federal program, the dollars are disbursed through the state’s intermediate units. Business manager Joseph Ambrosini said most special education grants are state funded.

Dollars connected with the Individuals with Disabilities Education Act were treated in the same manner.

"We run a report through payroll, and it separates federal wage employees and state wage employees," Ambrosini said. "Those IDEA people were under my state listing and not my federal listing.

"The auditors realized it was unintentional."

The problem was not unique to New Castle. State auditors cited the United School District in Indiana County for the same issue.

The second and third findings relate to transportation. The state overpaid New Castle approximately $19,000 for providing an incorrect number of students using buses. The issue involved a clerical error, which the district said it fixed when brought to its attention.

The district was also cited for not having up-to-date information on its bus drivers. At the time of its review, auditors found no records for three drivers, 13 drivers did not have valid licenses and 12 did not have current physical forms. Finally, six drivers did not receive board approval.
Each August, the board approves bus drivers for the upcoming school year.

"The breakdown came when we weren’t receiving those names (after the board met)," Gabriel said.

To correct the finding, First Student provides the district with driver information monthly.

In its lone observation, the state said a risk exists that the district’s software vendors could enter the system without permission. New Castle said it has taken steps to prevent unauthorized access.

"Our audit found that the (district) complied, in all significant respects, with applicable state laws, regulations, contracts, grant requirements and administrative procedures, except as detailed in three findings noted in this report," auditors wrote.