1. 1 Financial Services Paraprofessional Training September 17, 2014

2. 2 Welcome Jon Graswich, CPA - Chief Financial Officer Introductions: Financial Services Staff Members

3. District Services eAlerts & Crime Stoppers – Mike Conklin eAlerts & Crime Stoppers – Mike Conklin Outdoor Learning Center – CyLynn Braswell Outdoor Learning Center – CyLynn Braswell 3

4. 4 Agenda Session I: Session I: Business Services Business Services Accounts Receivable Accounts Receivable Accounts Payable Accounts Payable Purchasing Purchasing Payroll Payroll Session II: Session II: Activity Funds Activity Funds

5. Business Services - Fraud Findings from the ACFE Report to the Nations on Occupational Fraud and Abuse Findings from the ACFE Report to the Nations on Occupational Fraud and Abuse The typical organization loses 5% of it’s revenue to fraud each year. The typical organization loses 5% of it’s revenue to fraud each year. Average fraud scheme last 18 months before detected. Average fraud scheme last 18 months before detected. Most common method of detecting fraud is through tips. Most common method of detecting fraud is through tips. Second most common method of discovery is by accident. Second most common method of discovery is by accident. The typical fraud perpetrator is a first-time offender – only 7% had prior convictions. The typical fraud perpetrator is a first-time offender – only 7% had prior convictions. 5

6. Business Services – Fraud Triangle Motive - a person needs to have a motive or need. Motivation. Financial need, challenge or revenge. An incentive or pressure. Often created by addiction. Opportunity - the person must have a tempting opportunity. Created by poor internal controls. Rationalization – Justification. Attitude or values through pressure that justifies a dishonest act. 6

7. Business Services - Fraud Headlines Pasadena ISD employee accused of stealing thousands of dollars collected by student fundraisers (collect cash, enter lesser amount in record books and pockets difference) Pasadena ISD employee accused of stealing thousands of dollars collected by student fundraisers (collect cash, enter lesser amount in record books and pockets difference) School District administrator accused of embezzling nearly $508,000 (bogus check scam) School District administrator accused of embezzling nearly $508,000 (bogus check scam) 7

8. Business Services - Fraud Headlines McKinney ISD Secretary arrested on suspicion of stealing from the school’s parking funds. McKinney ISD Secretary arrested on suspicion of stealing from the school’s parking funds. Beaumont ISD employee pleaded guilty to charge of fraud (also investigated by FBI) Beaumont ISD employee pleaded guilty to charge of fraud (also investigated by FBI) Dallas ISD police officer and a clerk accused of stealing money (cash collected from students who forgot their ID badges and had cell phone fines) Dallas ISD police officer and a clerk accused of stealing money (cash collected from students who forgot their ID badges and had cell phone fines) 8

9. Business Services - Fraud Headlines Invoices paid in amount of $291,000 to AC vendor for overcharges, replacement costs covered by warranties, etc. (vendor invoiced for more expensive units than they actually installed) Invoices paid in amount of $291,000 to AC vendor for overcharges, replacement costs covered by warranties, etc. (vendor invoiced for more expensive units than they actually installed) A milk vendor filled each 8 oz. container with only 7½ oz. milk (watered down) A milk vendor filled each 8 oz. container with only 7½ oz. milk (watered down) School Board member’s forged signature on school bank account School Board member’s forged signature on school bank account School Superintendent and his wife’s credit card purchases paid from district funds School Superintendent and his wife’s credit card purchases paid from district funds 9

10. Business Services - Fraud Headlines Longtime School District volunteer accused of stealing high school basketball ticket money Longtime School District volunteer accused of stealing high school basketball ticket money Accused of repeatedly stealing cash while collecting ticket money Accused of repeatedly stealing cash while collecting ticket money Undetermined amount Undetermined amount Discovered while administrators observing video to review altercation involving students Discovered while administrators observing video to review altercation involving students 10

11. Business Services - Fraud Headlines Quote: Quote: “These defendants knowingly and willfully abused their position of trust to steal education funds that were supposed to be used to provide services for the most innocent of victims – school children” “These defendants knowingly and willfully abused their position of trust to steal education funds that were supposed to be used to provide services for the most innocent of victims – school children” 11

12. Business Services - Coding The Texas Education Code requires a standard school district fiscal accounting system and that is the major purpose for the accounting code structure. The Texas Education Code requires a standard school district fiscal accounting system and that is the major purpose for the accounting code structure. Fund (1xx-8xx) - identify the fund group and specific fund Fund (1xx-8xx) - identify the fund group and specific fund Fiscal Year (0-9) - fiscal year of transaction Fiscal Year (0-9) - fiscal year of transaction Function (11-99) - purpose of transaction Function (11-99) - purpose of transaction Organization (001-999) - identify the organization Organization (001-999) - identify the organization Program Intent (11-99) - intent of a program provided to students Program Intent (11-99) - intent of a program provided to students Local Option (xxx) – provide special accountability at local level Local Option (xxx) – provide special accountability at local level Object (5xRevenue/6xExpenditure) – identify the nature and object of an account, a transaction or a source Object (5xRevenue/6xExpenditure) – identify the nature and object of an account, a transaction or a source Sub-Object (xx) – further describe transaction Sub-Object (xx) – further describe transaction 12

13. Business Services - Coding Requisition Description – HELP! Requisition Description – HELP! Object 6399 Supplies? Object 6399 Supplies? 13

14. Business Services - Coding Supplies Supplies Instructional or Office Instructional or Office Nurse or Counselor Nurse or Counselor Food products – classroom supplies or for consumption Food products – classroom supplies or for consumption 14

15. Business Services - Coding Staff Development Staff Development Function 13 Function 13 15

16. Business Services - Coding Identifying Incentives and Awards Identifying Incentives and Awards Object 6499 – Awards such as Merit Certificates, Trophies, Letter Jackets & Plaques Object 6499 – Awards such as Merit Certificates, Trophies, Letter Jackets & Plaques Object 6399 – Immaterial Promotional Items, Treasure Box Items such as Pencils, Stickers & etc. Object 6399 – Immaterial Promotional Items, Treasure Box Items such as Pencils, Stickers & etc. T-Shirts T-Shirts Teachers? Staff Development? Identification? Teachers? Staff Development? Identification? Students? Field Day? Program Identification? Students? Field Day? Program Identification? Given = 6399 Given = 6399 Sold = 6343 Sold = 6343 16

17. Business Services - Coding Purchase Order for: Purchase Order for: Paper Products = Object 6399 Paper Products = Object 6399 Food Items = Object 6499 Food Items = Object 6499 What Function? What Function? Classroom = function 11 Classroom = function 11 Identify further for Choir? (11.6399.15) Identify further for Choir? (11.6399.15) Identify further for Second Grade? (11.6399.02) Identify further for Second Grade? (11.6399.02) Library = function 12 Library = function 12 Staff Development = function 13 Staff Development = function 13 Teacher Lounge = function 23 Teacher Lounge = function 23 Principal Office = function 23 Principal Office = function 23 Campus Staff Meeting = function 23 Campus Staff Meeting = function 23 Counselor = function 31 Counselor = function 31 Nurse = function 33 Nurse = function 33 17

18. Business Services Northwest Education Foundation Grants Northwest Education Foundation Grants Cash/Petty Cash Cash/Petty Cash Budget Transfers/Amendments Budget Transfers/Amendments Travel Guidelines Travel Guidelines Reimbursements Reimbursements 18

19. Accounts Receivable Deposits Deposits Alternative Receipting Alternative Receipting 19

20. Accounts Payable Process Process Credit Vendors Credit Vendors Hotel Checks Hotel Checks Purchase Order with Attached List Purchase Order with Attached List 20

21. Break Time! 21

22. Purchasing Bids/Proposals for School Year 2014-2015 Bids/Proposals for School Year 2014-2015 Purchasing Cooperatives Purchasing Cooperatives Contracts from the Company or Vendor Contracts from the Company or Vendor Independent Contract Packet Independent Contract Packet 22

23. Payroll GHG Time Keeping System GHG Time Keeping System Aesop Reporting Aesop Reporting Substitutes and Temporary Workers Substitutes and Temporary Workers Extra Duty/Overtime Timesheets Extra Duty/Overtime Timesheets 23

24. 24 Questions ?

25. LUNCH Provided by: Provided by: Business Essentials Office Supply Business Essentials Office Supply Thank You!!! 25