State audit: Elwood school district lacked financial oversight but has fixed problem

The Elwood school district failed to adequately control its electronic money transfers but has since fixed the problem, according to a 13-month audit by state Comptroller Thomas DiNapoli.

Results of the audit were released in a July report.

It found that Elwood, which is already projecting severe budget issues for the 2015-2016 school year, lacked basic written policies to ensure secure money transfers, including a requirement that more than one person approve the accounts.

None of the transfers contained improprieties but "the failure to maintain adequate documentation of electronic transfers and ensure that each transaction is processed by at least two people . . . increases the risk of unauthorized or inappropriate transactions," according to DiNapoli's report.

Transfers are used to move funds between investment accounts and for payroll.

The district has taken corrective action, according to the audit of July 1, 2012, to Aug. 31, 2013.

District officials declined to comment Monday. But in a response accompanying the audit report, officials said they agreed with the findings and had established "comprehensive written policies and procedures for electronic transfers."

More than one person now initiates and approves transfers, according to the audit. District officials said they will also receive all legally required bank notifications. The audit had found nearly half lacked the notifications.

During the audit period, the district processed 442 electronic transfers totaling more than $188.2 million. None of the 98 transfers evaluated in the sample had evidence of at least two people involved in processing transactions.