YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

 

August 15, 2001

Report No. 2001-62

The following problems were discovered as a result of an audit conducted by our office of the Department of Elementary and Secondary Education, Missouri School for the Blind.

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As a part of our audit of the Missouri School for the Blind, we reviewed certain records of the �It Is The Soul That Sees Foundation, Inc.� (Foundation), a not for profit corporation which supplements the financial needs of the school.� Our review of these records found that from January 1998 through February 2001 at least $1.7 million of collections intended for the Missouri School for the Blind were deposited in the accounts of the Foundation rather than the Missouri School for the Blind Trust Fund. 

• Some of the donation and bequest checks received were made payable to the Missouri School for the Blind, but were endorsed �It is the Soul that Sees Foundation� and deposited to the Foundation account.

• In other cases, trustees and estate attorneys indicate that the school superintendent told them to make their checks payable to the Foundation.� They indicate this was done to ensure the school and students got the money, and not the general fund of the state.� They indicate they were told this was the way to make donations and contributions to the school.

• In one instance, it appears the checks paid from an estate were altered to show the Foundation as the payee and the checks were then deposited to the Foundation.

• In another case, the trustee was asked to reissue the check to the �It is the Soul that Sees Foundation�.� The original check received was payable to the Missouri School for the Blind, and two prior checks from this trust had been made payable to the school and deposited to the Trust Fund.

The Missouri School for the Blind has not complied with policies established by the State Board of Education and the Department of Elementary and Secondary Education, nor has the department provided adequate oversight of the school�s operations to ensure compliance with department policies.

• A donation of $10,000 received by the school was deposited into the school�s Student Fund without the board�s approval.� Policy requires grants, gifts, devises, bequests, or donations of more than $3,000 be referred to the State Board of Education for inclusion in the appropriate trust fund.

• Department policy requires the school�s Activity Fund monies to be used only for �institutional expenses and student benefits such as, but not limited to, tours, mobility training, concerts, speakers, indigent student expenses, proctor expenses, and fund expenditures.�� We noted numerous expenditures from the Activity Fund for employee activities which did not appear to comply with department policy.� These expenditures included loans to employees, food for employee meetings, and employee recognition gifts and other activities.� These types of expenditures do not appear to be consistent with the stated purpose of the Student Activity Fund or a prudent use of public funds.

• During fiscal years 2000 and 1999, the school spent more than $11,500 for food purchases associated� with employee recognition activities which did not appear to comply with the department�s policy.� The department�s policy specifically lists situations where food purchases will be allowed for employee activities and often limits the types of food which may be purchased.

The Missouri School for the Blind does not have adequate procedures to ensure unused cash and vendor receipts documenting disbursements of student activity funds are returned to the business office in a timely manner.� We noted several instances where these monies were not fully accounted for, or for which there was no accounting for the cash provided to employees.� For example, in December 2000 a staff member was given $600 cash for an activity, and as of April 19, 2001, no documentation supporting how the money was spent, or any unused money, had been returned to the business office.� We also noted one check for $5,045 made payable to cash for which the school could not locate any supporting documentation.� We could not determine whether the documentation had been misplaced by the school or had never been submitted to the business office as required.� In addition, we noted instances where hand written receipts were submitted as supporting documentation for some of these cash expenditures. 

On July 2, 1999, the school purchased a residence for the Superintendent at a cost of more than $376,000.� The Department of Elementary and Secondary Education and the Office of Administration approved the contract for the purchase of the house.� At the time of the purchase, the school and the department were aware that the house required significant improvements; however, no listing or plan of improvements needed were developed or approved.� During the period from July 13, 1999 through March 20, 2001, approximately $60,000 was paid for repairs and improvements on the Superintendent�s house, not including a significant amount of labor cost incurred by the school�s maintenance department performing some of the improvements. 

We also had findings related to accounting for student funds, contracts for professional services, federal grant management, and fixed assets.

Complete Audit Report

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Missouri State Auditor's Office
moaudit@mail.auditor.state.mo.us
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