Internal and Contracted Audit Activity - April 11, 2024 - DCSD Board Meeting Archive

Joel B. Thibodeaux Dr. Devon Q Horton
Director of Audits & Compliance Superintendent

Office of Internal Audits & Compliance
1701 Mountain Industrial Boulevard
Stone Mountain, Georgia 30083-1027
678-676-1200

TO: DEKALB COUNTY BOARD OF EDUCATION AUDIT COMMITTEE
Mrs. Deirdre P. Pierce, Chair; Mrs. Anna Hill, Vice Chair

DATE: APRIL 11, 2024

RE: UPDATES: INTERNAL AND CONTRACTED AUDIT ACTIVITY

1. ESSER Audit – FORVIS, LLP

The scheduled period of completion of the final report remains May 2024.

Substantial submissions of requested information transmitted throughout March. Some high-
level documentation is still being sought, but transactional documents are pretty much all
accounted for. We are now in close collaboration for providing all outstanding requests and
responses to auditor questions related to deviation from documented processes. Our update
meetings are well attended, thanks to Mr. Palmer’s support as Chief of Staff.

We still expect delivery of the draft report in late April, early May. What we are finding in this
forensic exercise as well as the SPLOST project, is that our systems have greatly improved over
the past 2-3 years and in fact, our Procurement to Payment process is substantially improved to
the point that many of the issues that have been discovered and documented have already been
addressed or resolved.

2. SPLOST IV & V Audit – Plante Moran, PLLC

At this point, the report delivery date remains May 31, 2024.

Forensic Analysis is progressing through vendor analysis. Ten (10) vendors are subject to further
analysis. Change Order evaluation has identified 10 of 30 change orders to be further analyzed
by Plante Moran’s Construction team. Plante Moran is examining the change orders to
determine if they meet industry standards.

In following provisions in a submitted change order ($320,000 added to project total), an
increased number of Plante Moran contractors spent March 7-29, 2024 onsite at Sam Moss,
WBBC, and AIC for data and document location and collection. Their team reported their
progress in document collections:

 100% of checks, ACH and wires available.
Joel B. Thibodeaux Dr. Devon Q Horton
Director of Audits & Compliance Superintendent

Office of Internal Audits & Compliance
1701 Mountain Industrial Boulevard
Stone Mountain, Georgia 30083-1027
678-676-1200

o ACH transactions prior to November 16 were not available to audit as the
vendor’s service agreement at the time did not include producing or retaining
individual vendor payment detail.

 66% of Invoices and Approvals
o “M: Drive” and On-site items not located = 2,700
o Both DIIT and Fleet Services have reported that no additional support
documents are available

For the document control failures reported above, the cause of these failures and the reason
they weren't discovered until now is rooted in the siloed management structure historically
practiced in the District.

Specifically, regarding SPLOST document management prior to the implementation of Munis,
project management responsibility was spread out among the various departments assigned
SPOLST funds for capital purchases related to projects listed in the approved SPLOST budget.
Despite the fact that the SPLOST programs have consolidated budgets relating specifically to
capital purchases, there was no uniform treatment or standard procedure implemented across
divisions for SPLOST spending - leaving each separate division to process these expenditures
according to its own internal processes.

Additionally, provisions were not made to consolidate recordkeeping for either SPLOST IV or V.
This led to the increased risk that documents were stored at various locations with equally
varying levels of access, as well as in different mediums - paper, digital (both network and
peripheral storage), or within applications. The conflation of these circumstances, along with
high level turnover in all associated divisions (Operations, Finance, DIIT, HR) led to the following
"negative" conditions related to document status:

Finance:
SPLOST-related Purchase Order copies destroyed under Local Government Retention rule LG-08-
001-Accounting Records (5 years for Purchase Orders); and LG-08-015-General Ledger & Trail
Balances (7 years)

CrossPointe charge codes used for SPLOST transactions made no distinctions between Locations
(department/division), but rather fund source and program, making it difficult to locate
responsible management for many of the data and document requests.
Joel B. Thibodeaux Dr. Devon Q Horton
Director of Audits & Compliance Superintendent

Office of Internal Audits & Compliance
1701 Mountain Industrial Boulevard
Stone Mountain, Georgia 30083-1027
678-676-1200

Capital construction related purchase orders should have been retained under schedule LG-18-
005-Capital Construction Project Records (11 years after completion of project)

Division of Information & Instructional Technology:
SPLOST-related invoices were retained in hardcopy form in a secure storage area, but many
were shredded by a disgruntled former DIIT employee in an act of retaliation against IT
Management. DIIT has confirmed that the incident occurred and that no additional documents
are available.

The full extent of the document destruction was not discovered until this engagement.

Fleet Services:
Vehicle purchases were conducted under statewide contracts, so solicitation and selection
documents generally applicable for capital purchases were not produced and therefore are not
available. Copies of statewide contracts are available online and contract numbers were
provided to the Plante Moran team. This is not a non-compliant condition.

Invoices related to vehicle purchases were retained in hardcopy form in a separate storage area.
Current feedback from Fleet Services is that the invoices were retained under LG-06-001, the
same as the purchase orders in finance, and therefore may have been destroyed under the 5-
year rule. We are awaiting confirmation from Fleet Services on the further availability of
documents.

SPLOST Management/Operations:
Project management records for capital construction projects were retained in hardcopy and
digital form. Many project management documents, including project descriptions and
requirements, bid records, plan reviews, project schedules, change orders, contracts, and
budgets were retained in various forms both in storage areas and online data repositories.
Paper/hardcopy records have not been digitized.

Financial records and documents generated in other departments and divisions were not
retained by Project Management, so when Finance disposed of SPLOST purchase orders in that
division, Operations and Project Management had no backup copies.

Overall condition of SPLOST financial records:
The large volume of selection and transaction records existing in hardcopy only and not digitized
demanded a large amount of manpower to collect, document, and analyze. This caused the
District to have Plante Moran to provide additional resources to complete the effort.
Joel B. Thibodeaux Dr. Devon Q Horton
Director of Audits & Compliance Superintendent

Office of Internal Audits & Compliance
1701 Mountain Industrial Boulevard
Stone Mountain, Georgia 30083-1027
678-676-1200

The implementation of Munis has already addressed a number of these process control and
document retention issues. The system has an assigned workflow that accounts for each
division's documents and approvals. Operations Project Management has also implemented
Phase 1 of a new project management information system (Kahua), which will retain all SPLOST-
related project management and financial records to a central repository, as well as tie to Munis
funding and expenditure totals. Throughout this engagement, despite these types of negative
disclosures, we are reasonably assured that the situations detailed above are rooted in past
inadequacies in tools and practices. Most of what was uncovered has now been addressed with
upgrades to technologically and necessary process changes to strengthen controls and
accountability. Most of these reformative actions were already underway prior to these
discoveries, therefore rooted in implementing best practices and industry standards, positioning
us to effectively respond to whatever final findings this SPLOST forensic audit will yield.

3. Internal Audit Activity

a. School Audits
i. Finance has provided the Internal Audits team will full data access to Munis
Student Activity and archived SchoolBooks data – enhancing IA’s ability to
retrieve and analyze school financial activity.
ii. Audits were completed at SW DeKalb and Redan High Schools. Audit reports
were transmitted to Principals and the HS Area Office. Lakeside HS required
expanded scope. Additional analysis and reporting underway.
iii. Audits at Cedar Grove, Dunwoody, and Lithonia High Schools were initiated
during March. Full cooperation is being reported from the field

b. Fleet Services Audit
i. Delivery of the draft report is scheduled for April 30, 2024.
ii. Audit Area Updates:
1. Vehicle Purchases – Other departments purchasing vehicles: Plant
Services, Public Safety, Transportation, Superintendent’s Office
2. Departmental fleet managers interviewed regarding procurement
procedures
3. Vehicle inventory being reconciled to Munis
iii. Fuel – Purchase contract management, fuel distribution management and
access procedures
iv. Vehicle Maintenance – Completed interviews with service advisors and
currently evaluating maintenance scheduling, inspections, and repair
Joel B. Thibodeaux Dr. Devon Q Horton
Director of Audits & Compliance Superintendent

Office of Internal Audits & Compliance
1701 Mountain Industrial Boulevard
Stone Mountain, Georgia 30083-1027
678-676-1200

v. Vehicle Disposal procedures – Capital Assets Manager interviewed and engaged
for additional information, including inventory reconciliation

Agenda Item