MEMORANDUM

TO:
FROM:
SUBJECT:
DATE:

SCHOOL BOARD
NATHAN LAVERY, DIRECTOR OF FINANCE
STUDENT ACCOUNTS REVIEW
JUNE 13, 2016

Student activity accounts are agency funds for which the Burlington School District acts only as a custodian.
The FY14 and FY15 audit management letter identified a number of issues related to the understanding, use,
and control of monies in these accounts. District auditors suggested three actions in response to these findings:
1. A review of existing student activity accounts,
2. The establishment of procedures to govern these accounts, and
3. Increased Business Office oversight of these accounts.
In response to these recommendations, the Business Office invited our auditors back to the District for an indepth review of existing accounts. On May 19 and 20, staff from the Business Office and the Burlington
School Districts auditor visited Burlington High School, Burlington Technical Center, Hunt Middle School,
Edmunds Middle School, Edmunds Elementary School, and Champlain Elementary School. Administrative
assistants at each of these locations provided financial data and described their current practices related to
administration of student activity accounts.
Having completed this review, the Business Office is now turning to recommendations 2 and 3. The findings of
the review are being examined, as are student activity account policies from other districts. Additionally, the
Business Office requested and received a presentation from the vendor of our accounting software intended to
demonstrate our systems capacity to incorporate the accounting of student activity accounts into the Districts
central accounting system. This step would allow for enhanced oversight and monitoring of inflows to and
outflows from these accounts. The Business Office anticipates dissemination of updated procedures prior to the
start of the next school year, and incorporation of these funds into our accounting system at a later point during
FY17.
All of the schools evidenced practices that must be changed. All schools had incidents where documentation
was insufficient to justify an expenditure. Other common issues were a lack of separation of duties and
inadequate oversight, evidence of spending that should not occur via student activity accounts, and acceptance
of funds that belong to the District, not specific school accounts. Burlington High School evidenced the most
YAW OBENG SUPERINTENDENT
150 Colchester Avenue, Burlington, Vermont 05401
Phone: 802-865-5332
Website: www.bsdvt.org
Twitter: @BTVSchools

problems; some of these violations were driven by the sheer volume of transactions, while others seems to be
the result of practices that violate the intended uses of student activity account funds.
BHS is of particular concern because their practices circumvent procedures established to control spending by
utilizing student activity accounts to pay for substantial reimbursements to employees. This end-run around the
established procedures is compounded by the fact that thousands of dollars of reimbursements have been paid
without adequate backup documentation, calling into question the propriety of these reimbursements. The only
approver on these payments is the principal, who repeatedly failed to ensure the presence of sufficient
documentation prior to authorizing payment. In other instances, documentation that is available reflects
inappropriate spending. For example, funds generated through parking fees assessed to students were used to
purchase professional baseball tickets for staff. In other cases, payments to staff appear to meet the definition of
wages, rather than reimbursements, and therefore should have been made via payroll not a student activity
account.
In addition to clear lack of oversight on spending, the high school is also depositing substantial sums into these
accounts that ought to be deposited into the School Districts central bank account and incorporated into the
budget. Most significantly, gate receipts are being deposited into the student activity accounts. These funds are
School District revenues and need to be deposited into the General Fund. We believe that this practice has been
longstanding and maybe the result of an understanding between the principal and prior central office
administrators; however, it is not an appropriate arrangement.

YAW OBENG SUPERINTENDENT

150 Colchester Avenue, Burlington, Vermont 05401
Phone: 802-865-5332
Website: www.bsdvt.org
Twitter: @BTVSchools