801.7 - Internal Controls

The board expects all board members, employees, volunteers, consultants, vendors, contractors, students, and other parties maintaining any relationship with the school district to act with integrity, due diligence, and in accordance with all laws in their duties involving the school district’s resources. The board is entrusted with public dollars and no one connected with the school district should do anything to erode that trust.

Internal control is the responsibility of all employees of the school district. The superintendent, chief financial officer, business manager, and board secretary [or designee] are responsible for developing internal controls designed to prevent and detect fraud, financial impropriety, or fiscal irregularities within the school district subject to review and approval by the board. Administrators will be alert for any indication of fraud, financial impropriety, or irregularity within the administrator’s area of responsibility.

Any employee who suspects fraud, impropriety, or irregularity will report their suspicions immediately to their immediate supervisor, the superintendent, the business manager, or a member of the Finance/Audit Committee. The superintendent will have primary responsibility for any necessary investigations and will coordinate investigative efforts with the board’s legal counsel, auditing firm, and other internal or external departments and agencies including law enforcement officials as the superintendent may deem appropriate.

Employees bringing forth a legitimate concern about a potential impropriety will not be retaliated against and those who do retaliate against such an employee will be subject to disciplinary action up to and including discharge.

In the event the concern or complaint about a potential financial impropriety involves the superintendent, the concern will be brought to the attention of the board president, or vice president, who will be empowered to contact the board’s legal counsel, insurance agent, auditing firm, and any other agency to investigate the concern or complaint. As the elected leader of the board, the board president will manage the board and related actions including board meetings, analysis of information related to concerns and/or complaints, and all communication internally and externally to the district.

Upon approval of the board, the superintendent [or designee] may contact the state auditor or elect to employ the school district’s auditing firm to conduct a complete, or partial, forensic internal control SAS99 audit annually, or otherwise as often as deemed necessary.

The superintendent will ensure the state auditor is notified of any suspected embezzlement or theft pursuant to Iowa law. The superintendent is authorized to order a complete forensic audit if, in the superintendent’s judgment, such an audit would be useful and beneficial to the school district. In the event there is an investigation, records will be maintained for use in the investigation. Individuals found to have altered or destroyed records will be subject to disciplinary action up to and including termination.

Adopted: 5/09
Reviewed: 7/10; 5/15; 12/18; 1/22
Revised: 10/12; 12/13
Legal Reference (Code of Iowa): 11, 279.8
IASB Reference: 707.05; 707.05-R(1)

801.7-R - Administrative Regulations Regarding Internal Control Procedures

Fraud, financial improprieties, or irregularities include but are not limited to:

  1. Forgery or unauthorized alteration of any document or account belonging to the district;
  2. Forgery or unauthorized alteration of a check, bank draft, or any other financial document;
  3. Misappropriation of funds, securities, supplies, or other assets;
  4. Impropriety in the handling of money or reporting of financial transactions;
  5. Profiteering because of insider information of district information or activities;
  6. Disclosing confidential and/or proprietary information to outside parties;
  7. Accepting or seeking anything of material value other than items used in the normal course of advertising from contractors, vendors, or persons providing services to the district;
  8. Destroying, removing, or inappropriately using district records, furniture, fixtures, or equipment;
  9. Failing to provide financial records to authorized state or local entities;
  10. Failure to cooperate fully with any financial auditors, investigators, or law enforcement;
  11. Any other dishonest or fraudulent act involving district monies or resources;
  12. Acting for purposes of personal financial gain, rather than in the best interest of the district; and
  13. Providing false, inaccurate, or misleading financial information to district administration or the board of directors.

The superintendent [or designee] will investigate reports of fraudulent activity in a manner that protects the confidentiality of the parties and the facts. All employees involved in the investigation will be advised to keep information about the investigation confidential.

If an investigation substantiates the occurrence of a fraudulent activity the superintendent, and/or board president or board vice president if the investigation centers on the superintendent, will issue a report to the board and appropriate personnel. If final disposition of the matter and any decision to file or not file a criminal complaint, or to refer the matter to the appropriate law enforcement and/or regulatory agency for independent investigation, will be made in consultation with district legal counsel. The results of the investigation will not be disclosed to or discussed with anyone other than those individuals with a legitimate right to know until the results are made public.

Adopted: 5/09
Reviewed: 10/12; 12/13; 5/15; 12/18; 1/22
IASB Reference: 707.05; 707.05-R(1)