Santa Clara County Grand Jury • 2008-2009

Fremont Union High School District Cupertino, Fremont, Homestead, Lynbrook, Monta Vista High Schools and

Published: September 03, 2009 4 pages

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Findings and Recommendations 4 findings

No trustees or superintendents/chancellors have been trained in inventory control. Inventory control training for board members and superintendents is not mandated by the State, resulting in a lack offamiliarity and inconsistent application of inventory requirements by many districts . • All K-8, K-12 and community college districts Response: FUHSD agrees, training on inventory control is not mandated by the state for superintendents/chancellors or board members. It is important, however, that staff be well trained in inventory control.

Related Recommendations (1)

All Santa Clara County school board trustees, superintendents/chancellors should be required to review and understand Education Code 35168 and 81600 and BAM (Community College Budget and Accounting Manual) requirements for inventory control. Response: The recommendation has been implemented. The Board of Trustees/Superintendent has reviewed and is knowledgeable of Education Code 35168 and is aware of their obligations under the law. 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: SCCOE plans to implement the inventory tracking/fixed asset module of the Quintessential Software Systems in Fiscal Year 2009-10 and will offer training for interested districts. FUHSD will send staff to these trainings when they are offered.

All district superintendents, chancellors and district staff report incomplete inventory information to their boards. This results in lack of knowledge about the value and size of their inventory. Response: FUHSD disagrees with this finding due to the fact that the annual financial reports contain fixed asset information.

Related Recommendations (1)

All Boards of Trustees should require apresentation on the results of their districts' biennial inventory, including total value, variances resulting from the reconciliation between past and current inventories and aproposed plan to resolve discrepancies. Response: This recommendation will be partially implemented. The annual financial reports contain the value of inventory and are presented to the Board each year. With the current fiscal outlook it is doubtful that there are funds to commit personnel or contractor funds required to perform all of this work. This is not ahigh priority item, as we have had fairly low exposure to loss of inventory. Additionally, this level of full inventory is not mandated by Education Code. The California State Accounting Manual states that the California Department recommends an annual inventory, but goes on to quote the Federal Register that: Aphysical inventory of equipment shall be taken and the results reconciled with theproperty records at least once every 2 years to verify the existence, current utilization, and continued needfor the equipment. A statistical samplinz basis is acceptable .... (CSAM Procedure 410) Over the summer FUHSD conducted a complete physical inventory and is planning to use a "statistical sampling basis" next year.

With the exception of Santa Clara Unified and Los Gatos Unified School Districts, all K-12 districts fail to understand the need to reconcile inventories from previous fiscal years to the latest inventory update. Without reconciliation, the opportunity to: identify lost, missing or stolen items, takepreventative measures, and obtain timely reimbursement may be lost. Response: FUHSD disagrees with this finding. FUHSD understands that inventory reconciliation can be helpful in identifying lost and stolen items and taking preventative measures and obtaining timely reimbursement.

Related Recommendations (1)

All K-12 school districts should reconcile the most current, full inventory with prior inventories, to identify missing items andpotential losses/thefts. The results will enable the districts to implement safeguards toprevent future losses. Response: Please see responses to recommendations 1and 3.

("D" onlv) Many K-12 Districts are notfollowing requirements for inventory control as stated inEducation Code 35168, and/or their ownpolicies andprocedures. D) Thefollowing districts do not conduct Inventory on a biennial basis as required by Education Code (Note: A rolling inventory is not considered aphysical inventory as defined by code) Response: Please see responses to recommendations 1and 3.

No recommendations for this finding

Additional Recommendations 2

These recommendations are not explicitly linked to specific findings.

R1

Trustees should review and be knowledgeable of Education Code 35168for K-12 and Education Code 81600for Community Colleges. Response: The recommendation has been implemented. The Board of Trustees has reviewed and is knowledgeable of Education Code 35168 and is aware of their obligations under the law. It bears noting that the California Education Code 35168 was first enacted in 1976 and revised in 1984. The amount of$500 has not been changed since 1984 and is out of date. BOARDOFTRUSTEES:Nancy A.Newton, Barbara F.Nunes, Homer H.e. Tong, Hung Wei, Bill Wilson 589 West Fremont Avenue (408) 522-2200 Post Office Box F FAX (408) 245-5325 Sunnyvale, CA 94087 AN EQUAL OPPORTUNITY EMPLOYER http://www.fuhsd.org/
R7

To strengthen internal controls and ensure fiscal accountability, purchases made by the K-8 and K-12 Superintendents should be approved by the Boards of Trustees prior topurchase. In the event an immediate purchase is required, post-approval by the Board would ensure no conflicts of interest or abuses occur. Expenditures should bepresented separately from the Board's consent calendar to ensure proper scrutiny. Credit card statements and a listing of disbursements should beprovided to the Board for approval . • All K-8 and K-12 District Boards of Trustees Response: The recommendation has been partially implemented. Purchase orders issued by the Superintendent are presented to the Board for approval. In the event an immediate purchase is required, the purchase order is presented to the Board for post-approval. Purchase orders issued by the Superintendent are approved by the Board of Trustees on the consent calendar. If aBoard member wishes to discuss an item on the consent calendar, it can be pulled and scrutinized. Credit card statements and a listing of disbursements are approved by the Board President. If you require additional information please feel free to call me. Sincerely, Christine Mallery Chief Business Officer/Associate Superintendent crn/nrn

No Responses Found 1

Government entities assigned to respond to this report. No response documents have been linked in our database.

Fremont Union High School District School District