SEP 2 " ChiefExecutlveOffi'" rk, September 8, 2009 SuperiorDCAouVrtIDofHCA. YCAouMnm~' K~i Clllf<i By-d-aldycki

R1

Superintendent Trustees should review and be knowledgeable of Education Code 35168 for Deborah L.Blow, Ed.D. K12 Response Recommendation l--This recommendation will be implemented. A copy of Education Code 35168 will be added to the next regular communication with the Board of Trustees. It bears noting that the California Education Code 35168 was first enacted in 1976 and revised last in 1984. The amount of $500 has not been changed since 1984 and is out-of-date. of6

R2

All Santa Clara County school board trustees and superintendents should be required to review and understand Education Code 35168 and BAM requirements for inventory control. Response Recommendation 2a - This recommendation will be implemented. The Board of Trustees will be given a copy of Education 35168 before the next board meeting. For K-12 districts, the COE should take the lead inproviding comprehensive training on inventory control, in conjunction with the release of the new inventory tracking module within Quintessential Software Systems spearheaded by the COE. Response Recommendation 2b -- The district will take part in comprehensive training on inventory control provided by the Santa Clara County Office of Education. The board members and superintendent will receive a report regarding any inventory control requirement training.

R3

All Boards of Trustees should require a presentation on the results of their districts' biennial inventory, including total value, variances resulting from reconciliation between past and current inventories and aproposed plan to resolve discrepancies. 3- Response Recommendation This recommendation will be implemented. We are in the process of improving our existing inventory control system. This process includes annual financial reports that contain the value of our inventory. Current fiscal challenges may impact the district's ability to commit funds, personnel, or contractor funds required to perform this work. We have had fairly low exposure to loss of inventory.

R4

All K-12 school districts should reconcile the most current, full inventory with prior inventories, to identify missing items and potential losses/thefts. The results will enable the districts to implement safeguards to prevent future losses. 4- Response Recommendation Please see response to recommendation 3.

R5

A) The boards of Trustees for the district listed in Finding SA should conduct a full inventory or improve their existing inventory listing. Response Recommendation 5A- Working with the Santa Clara Office of Education, we will improve our current inventory control system. B) Board Policies/Administrative Regulations should be implemented by the Board of Trustees in all district listed in Finding 5B, assigning inventory control responsibilities and training to the superintendent, business manager, or appropriate designee. All districts should ensure that their policies remain current and in compliance. CSBA provides a food template for Board Policies inthe area of inventory control conforming to Education Code 35168. These districts should provide for staff responsible for inventory. Not Applicable C) The following districts are not tracking all items valued above $500 as required by Education Code 35168 Response Recommendation 5C- Working with the Santa Clara Office of Education, we will improve our current inventory control system which will include technology equipment and musical instruments valued above $500 asper administrative regulation 3440.1 D) The following districts do not conduct inventory on a biennial basis as required by Education Code Response Recommendation 5D- Working with the Santa Clara Office of Education, our current inventory system will improved and continue to be conducted on an annual basis.

R7

To strengthen internal controls and ensure fiscal accountability, purchases made by the K-8 superintendents should be approved by the board of trustees prior to purchase. In the event an immediate purchase is required, post-approval by the board would ensure no conflicts of interest or abuses occur. Expenditures should be presented separately from the board's consent calendar to ensure prior scrutiny. Credit card statements and a listing of disbursements should be provided to the board for approval. of6 Response Recommendation 7-This recommendation will be partially implemented. Cambrian School District has excellent internal controls in place. The business department is charged with ensuring that all expenditures including payroll, benefits, supplies, travel, services, equipment and construction, etc. follow stringent internal controls. Rigorous oversight is performed by the controller and CFO. On a yearly basis, external auditors test all areas of controls, examine in detail selected expenditures and review the credit card expenditures. The auditors report directly to the board on the financial condition of the district and on any concerns they have with business procedures. The board approves the credit card payments on the warrant list each month. Additionally the board president will review the superintendent's credit card statement on a monthly basis. Sincerely, ~()CQ}-- Gary Chronert Deborah Blow, Ed.D. Board President Superintendent Cambrian School District Cambrian School District