Prompted by the urging of school board member Tim Walsh, a narrow majority of the Riverside-Brookfield High School District 208 Board of Education has decided to seek requests for proposals for an internal controls audit of the school’s spending.
Walsh pushed hard for an audit of internal controls, saying it was required by a board policy which states that “[t]he superintendent or designee shall annually audit the district’s financial and business operations for compliance with established internal controls and provide the results to the board. The board may from time-to-time engage a third party to audit internal controls in addition to the annual audit.”
An accounting firm audits the district’s financial operations and standing annually as required by state law, but Walsh said that an occasional additional audit of internal controls should also be done, because the state-required audit does not specifically examine internal controls.
An internal controls audit looks to see if there are any losses due to fraud, employee error or imprudent action, or misrepresentation by third parties and also checks spending procedures and processes.
A recent scandal in which the former treasurer of the Lyons Township Trustees of Schools is charged with stealing $1.5 million from that office shows why an occasional outside internal controls audit is needed, Walsh said.
“It’s a good practice, which I assume is why it’s in our policies,” Walsh said. “I think any governmental body has a duty to make sure that you know that there are good controls in place. Unfortunately, it costs money and takes time, but the hope is that they’ll say you have good controls and you don’t have to worry about them for a while.”
Walsh emphasized that he has no reason to suspect that there is any malfeasance at RBHS, but he says it is good practice to have an outside firm check internal controls every so often.
“It’s not because I think there is any fraud going on or anything,” Walsh said. “I’m not trying to be accusatory. That’s not the purpose. The purpose is to make sure we are performing our duties properly.”
Walsh said that no one who he has talked to knew when, if ever, an internal controls audit has been done in District 208.
The cost of an internal controls audit is estimated to be between $6,000 and $20,000. School board members Laura Hruska, Ed Jepson and John Keen joined Walsh in supporting sending out a request for proposals.
Keen said he didn’t know if he would support paying for an internal controls audit, but said he saw no harm is seeing what it would cost.
Opposing an internal controls audit was school board President Matt Sinde and board members Garry Gryczan and Mike Welch.
“My feeling at this point in time is that an audit of internal controls is not necessary,” Welch said. “From what I’ve seen, I’m not sure at this point in time we should rush out for an internal controls audit.”
Gryczan pointed out that even an internal controls audit wouldn’t catch everything.
Only two employees in the district, Superintendent Kevin Skinkis and Interim Chief Financial Officer Tim McGinnis have district credit cards. Welch added that Walsh so routinely scrutinizes and questions bill payments every month that it makes an internal controls audit unnecessary.