Internal Audit TO:

Members of the CPS Board of Education and Audit Committee

CC:

Mary Ronan, Superintendent Diana Whitt, Treasurer/CFO

FROM: Chandra L. Brown, CIA Internal Auditor DATE:

September 18, 2014

RE:

SCPA Fact Finding Internal Audit Report – Executive Summary

__________________________________________________________________________________________

The presentation delivered on September 8, 2014 reported mainly on the issues identified during the Financial Analysis Fact Finding that was performed by the SCPA LSDMC Finance Chair, Monya Wyatt. This high-level executive summary is meant to detail the recommendations to address the identified issues. There are systemic issues that stem from the District structure and culture as well as lack of operational oversight. I recommend the immediate creation of an Oversight Committee that oversees the transition occurring at SCPA with the ultimate goal being to create a sustainable foundation based on integrity and with the interests of the students being the main priority. I recommend the first meeting be held in October with the key agenda items being the new Artistic Budget, the best means to report to the Anonymous Donor good stewardship of the funds they provided in anticipation of receiving the second portion of the grant and laying the ground work for the long-range vision of SCPA. Grants I recommend that the Anonymous Donor funds be immediately moved to Fund 19. All Grants coming into the District should go through the Grant Director to ensure proper recording and that usage of the funds are in compliance with the intended purpose(s). I recommend a written arrangement with the Friends that details when and how those funds will be directed to CPS on behalf of SCPA. I recommend the creation of investment procedures, for support organizations, that provide prudent guidelines to be followed and serve as a basis for all investment decisions. Box Office With the dissolution of the Friends, the Box Office function and all other financial-focused duties are now the responsibility of the Cincinnati Public School (CPS) District. I recommend that an Interim Budget Manager and Box Office position be hired and report to the Internal Auditor to ensure that they function independent of the current school administration. All resumes for the Box Office Manager position should be directed to the Internal Auditor to lead the evaluation and selection process in conjunction with the Oversight Committee. It is recommended that the Interim Budget Manager along with the Internal Auditor obtain District laptops. I recommend that the banking relationship with USBank be explored to determine if there is an option through them as the District’s banking partner. If not, I recommend pursuing Dr. 2651 Burnet Avenue Cincinnati, OH 45219 * office: (513) 363-0442 * mobile: (513) 203-8103 * e-mail: [email protected]

Rudnick’s request by having The Grant Director contact the current vendor and provide them with the CPS account number where all ticket sale proceeds should be deposited. Show Underwriters I recommend that the Interim Budget Manager create procedures that include how and when Show Underwriters are contacted. Schedule E Recommend that the Artistic Director clearly document the purpose of each Schedule E funded personnel and time commitment to fulfill their role. Rental Revenue Recommend enforcement of Board Policy 7510 – Use of District Facilities and Property, along with the rental application process detailed in the Facilities section of the CPS website and Staffnet. Also, recommend that the Interim Budget Manager establish a committee for facility rental. Review the FY15 Master Facilities Usage Calendar and existing requested rental contracts to assess where modifications are warranted. Recommend that the Board reevaluate the building engineer requirement at SCPA, as well as District-wide, because it can be cost prohibitive for the community. Parent Donations At the SCPA Community Wide meeting that the LSDMC is coordinating with School Administrators to be held on October 2 explicitly state that any donations that have been directed to The Friends in the past be redirected to CPS for the benefit of SCPA. Recommend that the Treasurer’s Office establish an account where these specific amounts can be housed. Student Activity Funds Prior to any future reorganizations occurring, I recommend that the Treasurer’s Office Management submit a written plan to the Board that clearly outlines what will be done, why it’s being done, along with the shortterm and long-term impact. I recommend that the Treasurer/CFO has responsibility for the individuals in the school offices that collect, record and deposit the public funds entrusted to the District and institute cash collection under dual control along with proper segregation of duties. CPS $45K Emergency Loan Recommend identifying the best financial channel to use to repay the loan. Establish a written repayment plan that includes terms and conditions, particularly about the purpose of the loan, how it will be repaid and when. The Interim Budget Manager will run a report that provides the details of what has been spent to date. SCPA Enrichment Fees Recommend that the Superintendent make a determination on whether the SCPA Enrichment Fee should be waived for students that receive free lunch just like the District Instructional Fees are waived for those students. Have the Interim Budget Manager create a tracking mechanism to identify students that have and have not paid. Create a written procedure that includes what actions are taken when a child has not paid and is not eligible to attend a fieldtrip. Promote the use of Payforit.net for the payment of fees. District Instructional Fees Recommend having the Payforit.net link more prominently placed on the CPS website and add a link to Payforit.net to the PowerSchool Fee page for more efficient flow – once a fee has been viewed on PowerSchool the Payforit.net link can be clicked to pay the fee. Also, recommend greater promotion of 2651 Burnet Avenue Cincinnati, OH 45219 * office: (513) 363-0442 * mobile: (513) 203-8103 * e-mail: [email protected]

Payforit.net as a means to collect fees by check and credit card to further reduce the amount of cash in the school buildings. General Fund and Artistic Budget Recommend implementing a more thorough Budget Review process. Recommend that the Budget Expenditures be approved by the LSDMC that is responsible for a particular school to ensure that the expenditures are reasonable and align with school initiatives such as The One Plan. Out-of-State School Tuition Recommend that the necessary setup be completed and any outstanding tuition be collected. Private Lesson Scholarships I recommend that the Interim Budget Manager create written procedures that detail the selection and award process. The Oversight Committee will assess how a larger portion of the student body can benefit from the need and merit-based scholarships. Staffing: Administrative and Private Supplemental The Artistic Director and Interim Budget Manager will identify the staff that is required for FY15 and document their purpose and time requirements. Create a written process to handle supplemental staffing hiring and contracts where applicable. Productions Recommend that the Artistic Director, along with his staff, document what is needed for any show that is performed. Then assess the feasibility of repurposing costumes and/or having students involved in their creation. Generate a written list of all production inventory held by the school. Put the show together in a manner that the production costs will be covered by the Box Office receipts. It is recommended that admission be charged for elementary productions to at least break-even. Supplies and Equipment The Interim Budget Manager will develop written procedures that detail in which circumstances the PNC Card and the $45K Emergency Loan should be used for a purchase instead of the CPS requisition process which requires lead time. Establish a clear decision-tree that specifies when to use the PNC card and when to use the CPS requisition process. Recommend that the instructors plan, to the best of their ability, what items are needed for the show. Marketing and Promotions Recommend that Public Affairs partner with the Artistic Director to identify the appropriate content and strategic plan for revamping the SCPA website. Recommend identifying best practices and apply those in creating an informative, interactive and comprehensive website. Assess how students can play an integral role in the design and other aspects. Conduct a gap analysis of what information is currently included on the website vs. what is desired, then generate a strategic plan to address the needs of all stakeholders. Maintenance Recommend that, as with each line item, compare the actual expenditures for piano tuning with the budgeted amount, quantify and understand the variance, then make appropriate adjustments for FY16.

2651 Burnet Avenue Cincinnati, OH 45219 * office: (513) 363-0442 * mobile: (513) 203-8103 * e-mail: [email protected]

Discretionary Recommend that the Principal and Artistic Director maintain a documented account of how the budgeted discretionary funds are used and whether the CPS requisition process was used or the PNC card. Spirit Shop The Interim Budget Manager will create written procedures related to inventory, cash handling, and ordering. Identify hours of operation and who would monitor the operations. Explore the option of using a fulfillment center to purchase Spirit Wear through the school website. Summer Camps: Summer Dance Intensive and Technical Theater Recommend charging an appropriate fee for for-profit summer camps that includes SCPA and non-SCPA students in accordance with Board Policy 7510 – Use of District Facilities and Property. Capital Assets The Finance Director will create written procedures for the proper handling of capital assets. Generate an inventory list for the off-site trailer, determine whether those items can be stored in the school building. Assess insurance coverage. Determine whether there are rental agreements for the SCPA owned instruments that are rented to students. Suzuki Program Confirm the current process and how the donations from First Student are being used as it relates to the Suzuki Program. Holding Two District Jobs at a Premium Recommend that the Artistic Director and his staff clearly document the purpose of each activity required and the time commitment to fulfill the role. This information will help to assess whether these activities are required and the best means to achieve the needed results as strategically as possible. Recommend exploring the option of retaining a Facility Manager to perform the duties currently performed by Technical Theatre staff at a premium. Obtain the Master Calendars of performances, rehearsals and rentals to determine how the building is scheduled and if it is determined to be excessive, identify what needs to be modified. The Friends of SCPA Recommend that the General Counsel notify the Friends in writing to vacate the SCPA building by September 23 so that the Interim Budget Manager and Box Office Manager can use that space by October 1. Create a written plan to secure all outstanding accounts payables and donations by September 22. Alumni and Community Partners The Interim Budget Manager will meet with Alumni representatives to capture the initial thoughts on involvement and share those with the Oversight Committee for inclusion into the overall long-range vision. The Oversight Committee will generate a listing of community partners that would be beneficial to contact. Preliminary Academic Items Recommend creating an internal and external communication strategy that is effective and timely. Career Tech Recommend a standing meeting between Gabe Lofton, Assistant Superintendent; Dr. Pat White; Kelly Broscheid, Career Tech Manager; an ILT representative; a Board member; and the Internal Auditor to 2651 Burnet Avenue Cincinnati, OH 45219 * office: (513) 363-0442 * mobile: (513) 203-8103 * e-mail: [email protected]

discuss how to be strategic in maximizing Career Tech opportunities and funding at SCPA and other schools as well. Explore the possibilities of focusing on, expanding and marketing Arts Administration and many other career paths. Seek out opportunities to use flex credit which can be used even with a non-Career Tech certified instructor. Reframe the show mindset to focus on increased quality of the shows performed instead of the quantity, which would allow greater focus for teachers and students. Determine expected quantifiable outcomes from each show such as what experience is this providing the student and does each production involve all pathways? Strategically recruit students to maximize every pathway based on Ohio Department of Education (ODE) requirements. Ensure that audition criteria is clearly communicated and consistently applied. Increase student involvement in all areas of the artistic programs as well. Meeting with SCPA Counselor Recommend incorporating information about the Counselor and plans for the school year prominently on the SCPA website page. Determine how Naviance is being maximized for the students. Evaluate the AP offerings, which teachers are selected to teach which courses, and how students are recommended for certain AP courses. A History of SCPA’s Evolution from Staff Conversations Recommend strengthening the enrollment and auditions processes as well as providing better exit support when applicable. Recommend that the Board reconsider the 3rd to 4th grade and 8th to 9th grade mandatory continuation, as well as the sibling policy. Consider using Walnut Hills High School as a model in that being a sibling is not a criteria for admittance there and would promote a consistent approach to do the same at SCPA. Increasing the space at SCPA would allow for additional programming and the expansion of successful programs. AdvancED AdvancED will be conducting a school accreditation review this year since the accreditation period is five years and the expiration date for SCPA’s accreditation is 6/30/15. Here is an excerpt from AdvancED website (www.advanc-ed.org) “AdvancED is the largest community of education professionals in the world. They are a non-profit, non-partisan organization that conducts rigorous, on-site external reviews of PreK-12 schools and school systems to ensure all learners realize their full potential. AdvancED is far from a typical accrediting agency. Our goal isn’t to certify that schools are good enough. Rather, our commitment is to help schools improve. AdvancED was created through a 2006 merger of the PreK-12 divisions of the North Central Association (NCA) and the Southern Association of Colleges and Schools (SACS) – and expanded through the 2011 acquisition of the Northwest Accreditation Commission (NWAC).” The AdvancED Accreditation Policies and Procedures have been downloaded and are being reviewed in anticipation of the upcoming review.

2651 Burnet Avenue Cincinnati, OH 45219 * office: (513) 363-0442 * mobile: (513) 203-8103 * e-mail: [email protected]

Arts School Network The Arts School Network is an Accrediting Commission for Community and Precollegiate Arts Schools. An excerpt from A Guide to Assessing Your Arts School (The Guide) states the following: “Arts Schools Network is a community of schools and institutions dedicated to education in and through the arts. Its mission is to provide the leadership necessary to inspire and maintain excellence in arts education by supporting and serving leaders of specialized arts schools across the country. The Accrediting Commission for Community and Precollegiate Arts Schools (ACCPAS) was established in 2001 by the Council of Arts Accrediting Associations to assess and accredit schools such as those that belong to the Arts Schools Network. The Guide is meant to assist arts schools in assessing their mission, operations, and programs.” The Guide is being reviewed by the Internal Auditor and the Oversight Committee to determine how the assessment can be applied in preparation for an internal assessment prior to an accreditation review being performed. Recommend that an accreditation review be completed before the end of the school year. Phase Rx5 – Readiness for College and Career Recommend improved early intervention for the students in order to adequately prepare them for both academic and career success. I also recommend that School Administration create a formidable relationship with the Guidance Counselor and Academic Parent Volunteers to obtain additional assistance when and where warranted for the Academic Staff. Leverage the use of Junior and Senior students to serve as mentors and positive examples for the younger students. Academic Parent Volunteers Academic Parent Volunteer Co-Chair is meeting with the SCPA Principal on 9/15 to discuss: Naviance, School Supplies, Guidance Counselor relationship, how the group can best serve and obtain time to interact at the September Staff Meeting. College Resource Center The LSDMC Finance Chair is meeting with the WHHS College Counselor to discuss how to establish a College Resource Center run by volunteers within SCPA. WHHS is considering extending an invitation to SCPA families for some of their College Readiness seminars. Other Items/Recommendations • Hold a student assembly and create a means of capturing student feedback, then share actions taken with the students. • Obtain and analyze data on suspensions and expulsions as well as identify the strategy to address these issues long term. • Review the School Resource Officer (SRO) process and A.L.I.C.E. training for students.

2651 Burnet Avenue Cincinnati, OH 45219 * office: (513) 363-0442 * mobile: (513) 203-8103 * e-mail: [email protected]