EIDE BAILLY INTERNAL CONTROLS EXAMINATION REPORT

Internal Controls Examination Report Date: August 2, 2019 CLARK COUNTY SCHOOL DISTRICT

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ...... 8 METHODOLOGY ...... 9 FRAUD CONTROL ACTIVITIES ...... 10 PREVENTATIVE CONTROLS ...... 10 PROPER SEGREGATION OF DUTIES ...... 10 PROPER AUTHORIZATION ...... 10 PHYSICAL SAFEGUARDS ...... 11 DETECTIVE CONTROLS...... 11 INDEPENDENT CHECKS...... 11 ADEQUATE DOCUMENTATION & RECORDS ...... 11 CENTRALIZED PROCEDURES ...... 12 BUDGETING PROCESS ...... 12 STRATEGIC BUDGETS (SCHOOLS) ...... 12 BUDGET TRANSFER PROCESS ...... 13 PURCHASING ...... 14 PURCHASING CARDS (P-CARDS) ...... 14 PAYROLL ...... 15 INTERNAL CONTROLS SURVEY ...... 16 DO YOU HAVE CONCERNS OF FRAUD WITHIN THE SCHOOL DISTRICT? ...... 16 DO YOU FEEL INTERNAL CONTROLS ARE IN PLACE TO PREVENT FRAUD WITHIN THE SCHOOL DISTRICT? ...... 17 ARE YOU AWARE IF THE SCHOOL DISTRICT HAS A WRITTEN POLICY IN PLACE EXPLAINING WHAT CONSTITUTES FRAUD AND THE RELATED CONSEQUENCES? ...... 18 IS THERE A REPORTING SYSTEM IN PLACE FOR YOU TO REPORT SUSPECTED FRAUD CONCERNS?...... 19 INTERNAL CONTROLS RECOMMENDATIONS ...... 20 GENERAL SCHOOL DISTRICT RECOMMENDATIONS ...... 21 GENERAL OBSERVATIONS – SCHOOL LEVEL ...... 22 INTERNAL CONTROL STRENGTHS...... 22 RECOMMENDATIONS ...... 23 ACCOUNTS PAYABLE ...... 24 INTERNAL CONTROL STRENGTHS...... 24 RECOMMENDATIONS ...... 24 ADMINISTRATIVE SERVICES ...... 25

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INTERNAL CONTROL STRENGTHS...... 25 RECOMMENDATIONS ...... 25 BUDGET...... 26 INTERNAL CONTROL STRENGTHS...... 26 RECOMMENDATIONS ...... 26 BUILDING DEPARTMENT...... 27 INTERNAL CONTROL STRENGTHS...... 27 RECOMMENDATIONS ...... 27 BUSINESS AND FINANCE ...... 28 INTERNAL CONTROL STRENGTHS...... 28 RECOMMENDATIONS ...... 28 CENTRAL INFORMATION SERVICES ...... 29 INTERNAL CONTROL STRENGTHS...... 29 RECOMMENDATIONS ...... 29 COLLEGE CAREER AND EQUITY ...... 30 INTERNAL CONTROL STRENGTHS...... 30 RECOMMENDATIONS ...... 30 COMPLIANCE AND BUILDING OPERATIONS ...... 31 INTERNAL CONTROL STRENGTHS...... 31 RECOMMENDATIONS ...... 31 CONSTRUCTION/CONSTRUCTION MANAGEMENT ...... 32 INTERNAL CONTROL STRENGTHS...... 32 RECOMMENDATIONS ...... 32 CONTRACTS AND SERVICES ...... 33 INTERNAL CONTROL STRENGTHS...... 33 RECOMMENDATIONS ...... 33 CONTRACTS, PROCUREMENT, AND COMPLIANCE ...... 34 INTERNAL CONTROL STRENGTHS...... 34 RECOMMENDATIONS ...... 34 CUSTODIAL OPERATIONS, LANDSCAPING, AND GROUNDS ...... 35 INTERNAL CONTROL STRENGTHS...... 35 RECOMMENDATIONS ...... 35 DATA PERFORMANCE MANAGEMENT AND PROJECT FACILITATION...... 36 INTERNAL CONTROL STRENGTHS...... 36 RECOMMENDATIONS ...... 36

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DEMOGRAPHICS, ZONING, AND GIS INFORMATION ...... 37 INTERNAL CONTROL STRENGTHS...... 37 RECOMMENDATIONS ...... 37 DISTRICT FORMS ...... 38 INTERNAL CONTROL STRENGTHS...... 38 RECOMMENDATIONS ...... 38 EMPLOYEE BENEFITS...... 39 INTERNAL CONTROL STRENGTHS...... 39 RECOMMENDATIONS ...... 39 EMPLOYEE BUSINESS TRAINING ...... 40 INTERNAL CONTROL STRENGTHS...... 40 RECOMMENDATIONS ...... 40 EMPLOYEE CONTRACTS AND COMPENSATION ...... 41 INTERNAL CONTROL STRENGTHS...... 41 RECOMMENDATIONS ...... 41 EMPLOYEE ONBOARDING AND DEVELOPMENT ...... 42 INTERNAL CONTROL STRENGTHS...... 42 RECOMMENDATIONS ...... 42 ENVIRONMENTAL SERVICES ...... 43 INTERNAL CONTROL STRENGTHS...... 43 RECOMMENDATIONS ...... 43 EQUIPMENT AND INSTRUCTIONAL ...... 44 INTERNAL CONTROL STRENGTHS...... 44 RECOMMENDATIONS ...... 44 FACILITIES AND BOND FUND FINANCIAL MANAGEMENT ...... 45 INTERNAL CONTROL STRENGTHS...... 45 RECOMMENDATIONS ...... 45 FIELD SERVICES ...... 46 INTERNAL CONTROL STRENGTHS...... 46 RECOMMENDATIONS ...... 46 FOOD SERVICE/FOOD SERVICE PURCHASING TEAM ...... 47 INTERNAL CONTROL STRENGTHS...... 47 RECOMMENDATIONS ...... 47 GENERAL/SCHOOL ACCOUNTING ...... 48 INTERNAL CONTROL STRENGTHS...... 48

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RECOMMENDATIONS ...... 48 GRANTS FISCAL SERVICES ...... 49 INTERNAL CONTROL STRENGTHS...... 49 RECOMMENDATIONS ...... 49 GRAPHICS ARTS CENTER ...... 50 INTERNAL CONTROL STRENGTHS...... 50 RECOMMENDATIONS ...... 50 HCM PROJECT ...... 51 INTERNAL CONTROL STRENGTHS...... 51 RECOMMENDATIONS ...... 51 HUMAN CAPITAL MANAGEMENT ...... 52 INTERNAL CONTROL STRENGTHS...... 52 RECOMMENDATIONS ...... 52 HUMAN RESOURCES ...... 53 INTERNAL CONTROL STRENGTHS...... 53 RECOMMENDATIONS ...... 53 IDENTITY MANAGEMENT AND APPLICATION SECURITY TEAM ...... 54 INTERNAL CONTROL STRENGTHS...... 54 RECOMMENDATIONS ...... 54 INTERNET OPERATIONS...... 55 INTERNAL CONTROL STRENGTHS...... 55 RECOMMENDATIONS ...... 55 MAIL SERVICES ...... 56 INTERNAL CONTROL STRENGTHS...... 56 RECOMMENDATIONS ...... 56 MAINTENANCE/ZONE MAINTENANCE/MAINTENANCE PURCHASING TEAM ...... 57 INTERNAL CONTROL STRENGTHS...... 57 RECOMMENDATIONS ...... 57 NETWORKING SERVICES ...... 59 INTERNAL CONTROL STRENGTHS...... 59 RECOMMENDATIONS ...... 59 OFFICE OF THE DEPUTY SUPERINTENDENT ...... 60 INTERNAL CONTROL STRENGTHS...... 60 RECOMMENDATIONS ...... 60 OPERATIONAL RISK SERVICES – INSURANCE/PROPERTY AND LIABILITY CLAIMS ...... 61

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INTERNAL CONTROL STRENGTHS...... 61 RECOMMENDATIONS ...... 61 OPERATIONAL SERVICES ...... 62 INTERNAL CONTROL STRENGTHS...... 62 RECOMMENDATIONS ...... 62 PAYROLL ...... 63 INTERNAL CONTROL STRENGTHS...... 63 RECOMMENDATIONS ...... 63 PURCHASING/PURCHASING BUSINESS SYSTEMS SUPPORT/PURCHASING, WAREHOUSING, MAIL SERVICE, AND GRAPHIC ARTS ...... 64 INTERNAL CONTROL STRENGTHS...... 64 RECOMMENDATIONS ...... 64 REAL PROPERTY MANAGEMENT ...... 65 INTERNAL CONTROL STRENGTHS...... 65 RECOMMENDATIONS ...... 65 RESOURCE MANAGEMENT ...... 66 INTERNAL CONTROL STRENGTHS...... 66 RECOMMENDATIONS ...... 66 RISK AND ENVIRONMENTAL SERVICES ...... 67 INTERNAL CONTROL STRENGTHS...... 67 RECOMMENDATIONS ...... 67 SAFETY AND RISK SERVICES ...... 68 INTERNAL CONTROL STRENGTHS...... 68 RECOMMENDATIONS ...... 68 SAP BASIS TEAM/SAP DEVELOPMENT TEAM ...... 69 INTERNAL CONTROL STRENGTHS...... 69 RECOMMENDATIONS ...... 69 SCHOOL AND DEPARTMENT HUMAN CAPITAL MANAGEMENT SUPPORT/ SCHOOL AND DEPARTMENT RECRUITMENT LICENSED/SUPPORT STAFF .... 70 INTERNAL CONTROL STRENGTHS...... 70 RECOMMENDATIONS ...... 70 SCHOOL BASED TECHNICIAN SUPPORT ...... 71 INTERNAL CONTROL STRENGTHS...... 71 RECOMMENDATIONS ...... 71 SERVER UNIT...... 72 INTERNAL CONTROL STRENGTHS...... 72 RECOMMENDATIONS ...... 72

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STRATEGIC BUDGET RESOURCES ...... 73 INTERNAL CONTROL STRENGTHS...... 73 RECOMMENDATIONS ...... 73 SUBSTITUTE HIRING AND SUBSTITUTE APPLICATIONS ...... 74 INTERNAL CONTROL STRENGTHS...... 74 RECOMMENDATIONS ...... 74 SYSTEM ADMINISTRATION TEAM ...... 75 INTERNAL CONTROL STRENGTHS...... 75 RECOMMENDATIONS ...... 75 TECHNICAL RESOURCES ...... 76 INTERNAL CONTROL STRENGTHS...... 76 RECOMMENDATIONS ...... 76 TECHNOLOGY/TECHNOLOGY AND INFORMATION SYSTEMS SERVICES ...... 77 INTERNAL CONTROL STRENGTHS...... 77 RECOMMENDATIONS ...... 77 TELECOMMUNICATION SERVICES ...... 78 INTERNAL CONTROL STRENGTHS...... 78 RECOMMENDATIONS ...... 78 TRANSPORTATION ...... 79 INTERNAL CONTROL STRENGTHS...... 79 RECOMMENDATIONS ...... 79 TREASURY ...... 80 INTERNAL CONTROL STRENGTHS...... 80 RECOMMENDATIONS ...... 80 USER SUPPORT SERVICES ...... 81 INTERNAL CONTROL STRENGTHS...... 81 RECOMMENDATIONS ...... 81 VEGAS PBS ...... 82 INTERNAL CONTROL STRENGTHS...... 82 RECOMMENDATIONS ...... 82 WAREHOUSE ...... 83 INTERNAL CONTROL STRENGTHS...... 83 RECOMMENDATIONS ...... 83 CONCLUSION ...... 84

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EXECUTIVE SUMMARY

Eide Bailly LLP (hereinafter referred to as “we,” “our,” or “us”) conducted an internal controls examination of Clark County School District (the “School District”) located in Clark County, Nevada. Specifically, we examined internal controls within the business and finance unit, and operational services unit. These units are comprised of 127 departments and sub-departments. Interviews were also conducted with 28 school principals and school bankers within the teaching and learning unit.

A total of 409 employee interviews were conducted within these units focused on identifying strengths and weaknesses within the controls over their respective positions including, but not limited to, budgeting approval and transfer processes, cash receipts, cash disbursements, cash/treasury management, payroll and inventory. In addition, a survey was sent to district employees within these departments to obtain a general understanding of employee concerns over internal controls.

We have provided 13 recommendations within this report for areas perceived to have low risk internal control weaknesses over the School District’s assets. These recommendations are designed to strengthen current controls as well as increase employee perception of detection, which is an effective measure in reducing an organization’s fraud risk. We were not engaged to opine on the School District’s internal controls over its finances. However, based on our examination, the School District has implemented key controls within the units identified to mitigate its fraud risk. Key controls are actions performed by personnel to detect errors or fraud in its transactions.

The services provided in this matter adhere to the applicable American Institute of Certified Public Accountants’ Statement on Standards for Consulting Services and the applicable Certified Fraud Examiner Code of Professional Standards established by the Association of Certified Fraud Examiners.

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METHODOLOGY

We examined the School District’s organizational structure as of November 2018 to determine which departments would be examined. Based on our professional judgement and conversations with School District executive staff, we determined the departments within the operational services unit, business and finance unit, and the schools themselves (learning and education unit) managed most of assets within the School District. Our scope of engagement was designed to understand the internal controls within these departments.

To determine which individuals would be interviewed, we examined the staff directory and chose individuals based on the following factors: • Department name • Job title • Number of employees within the department

Generally, our scope included at least one director, coordinator, supervisor/manager, and an assistant/secretary within each department. Larger departments required more interviewees whereas smaller departments required less. Of the 539 interviewees identified, 130 were unable to be interviewed for one or more of the following reasons: • Employee was no longer with the School District; • Employee did not arrive at scheduled interview time; • Attempts to contact employee for an interview were unsuccessful; • Employee’s job title or position changed; • Employee was on medical leave; or • After several interviews within a department, we determined the employee no longer needed to be interviewed.

A total of 409 interviews were completed, of which 204 were conducted in person. The remaining 205 were conducted by telephone. Workpaper 1 provides a listing of all employee interviewed.

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FRAUD CONTROL ACTIVITIES

Job responsibilities were analyzed and evaluated for recommendations that could be made to improve the control activities against fraud, including preventative controls and detective controls. PREVENTATIVE CONTROLS

Preventative controls or “before the fact” controls attempt to deter or prevent unauthorized transactions from occurring. Preventative controls include segregation of duties, proper authorization and physical safeguards.

PROPER SEGREGATION OF DUTIES When 1 person controls multiple phases of accounting transactions, the opportunity for fraud in the workplace significantly increases. By involving at least 1 other person in the transaction, the risk of fraud can be greatly reduced. Even with duties being segregated, employees could still work together to override the current controls in place to commit fraud. Fraud research indicates that nearly two-thirds of all frauds are committed by 1 perpetrator acting alone, whereas only one-third involve collusion by 2 or more parties.

The accounting and reporting processes are divided into 4 separate phases: authorization, execution, custody, and recording. The authorization phase requires 1 employee to direct another employee to initiate and execute a transaction. The execution phase requires a person with authority to initiate a transaction. Custody is the actual possession of the asset, such as cash or checks. Recording involves adjusting accounts to reflect the effects of the transaction within the accounting records.

Employees whose responsibilities encompass 2 or more phases of a transaction may have the opportunity to divert company assets for personal gain, which increases the level of fraud risk.

PROPER AUTHORIZATION Proper authorization reduces the opportunity for fraudulent transactions to occur because approval from an authorized individual is necessary to complete various stages of a financial transaction. Authorization can come in the form of signatures, initials and electronic approvals.

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Pre-determined levels of authority for employees to approve transactions should be clearly documented within an organization.

Individuals with authorization authority should review supporting documentation to verify the validity of transactions before approving them. Requiring proper authorization prevents unapproved transactions from taking place while also creating an audit trail. This audit trail will indicate who approved each transaction or if the authorization requirement was overridden, which can be helpful if further review of a transaction is necessary.

PHYSICAL SAFEGUARDS The use of physical safeguards helps to ensure the security of assets and records by only allowing authorized individuals to have access to these assets. Physical safeguards also help to prevent the theft of company assets. Companies should implement physical safeguards such as locks, keys, safes, fences, and passwords to prohibit unauthorized access to assets and records. DETECTIVE CONTROLS

Detective controls or “after the fact” controls attempt to identify unauthorized transactions after the occurrence. Detective controls include independent checks and adequate documentation and records. For these controls to be effective they must be continually performed and often take on preventative characteristics. For example, surprise cash counts if used as a detective control, would increase the perception of detection and thus “prevent” some unauthorized acts.

INDEPENDENT CHECKS Independent checks should be conducted to ensure transactions have proper authority and are recorded accurately. Independent checks include rotating job duties among employees, requiring mandatory vacations, surprise audits, engaging in yearly audits, etc.

ADEQUATE DOCUMENTATION & RECORDS Adequate documentation and records refers to maintaining proper documentation and records for each transaction, either in paper or electronic form. Procedures to ensure documentation and records are properly maintained should be in place to help guarantee supporting documentation is maintained and can be located and referenced at any time if certain transactions or discrepancies are subject to further review.

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CENTRALIZED PROCEDURES

Certain functions within the School District are performed centrally for nearly all departments to standardize processes and procedures. Based on our interviews with staff, these functions have numerous independent checks, segregations of duties, and proper approvals in place to mitigate fraud risk. The following information provides summary narratives as to the current internal controls in place within each function.

BUDGETING PROCESS

The Budget department compiles a detailed budget to present to the School Board prior to the beginning of the fiscal year. Once a final budget is approved by the School Board the Budget department is responsible for providing fiscal year budgets to each department within the School District and monitoring the budgets throughout the year. Each department reviews their budget and adjusts as needed without increasing the total budgeted amount. If a department needs additional funds, the department head can complete a budget requisition form. The request is reviewed by the Budget department and approved by the appropriate administrator.

On a monthly basis, the Budget department prepares a master budget report for the School Board that details year-to-date budget versus actual spending including all approved budget transfers between departments.

STRATEGIC BUDGETS (SCHOOLS) Each school is provided with a general strategic budget plan prior to the beginning of the school year based on projected student enrollment for the Spring and actual student enrollment for the Fall. Principals can adjust their strategic budget plan line items as needed and submit to the School Associate Superintendent for approval if the total budget amount is not affected. Budget Assistants and Human Resources both review and verify that all adjustments, payroll, and employee items fall within allowable guidelines.

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Any purchase made against the strategic budget requires a request form be sent from the School to the Budget department via Google Drive. Budget assistants will review to make sure it falls within the School's strategic budget plan. If the funds are needed for new employment, the request is reviewed by human resources as well. Any purchases for the strategic budget plan are submitted through the School’s centralized enterprise resource planning software, SAP. Once in SAP, the purchase requests are reviewed/approved by the Grants Fiscal Services department. If a school makes a purchase that is outside of the strategic budget, an email request must be sent by the principal to the Strategic Budget department. The request is reviewed, and a form is created, and sent back to principal to sign along with the assistant superintendent. The form is scanned to the Budget department who creates a budget request number allowing the purchase to be made.

BUDGET TRANSFER PROCESS Throughout the school year, departments within the school district may identify certain budgeted line items that may be close to the spending limit while others are significantly under budget. In these instances, departments may submit requests to transfer budgeted funds between line items within the department if the total budget amount does not change (e.g., transfer a portion budgeted funds for travel expense to supplies expense).

If the department’s budget is comprised of monies from the general fund, a formal written request form is submitted to the Budget department through the SAP system. The Budget department will review for appropriateness. Once approved, the Budget department will make the adjustment to the department’s budget in SAP.

If the requesting department’s budget is comprised of grant funds, the department will submit a request via email to the grant writer to transfer funds between line items within the budget. The grant writer sends a formal amendment request to the Resource Management department who reviews for appropriateness. Once reviewed, the amendment is sent back to the grant writer who sends the request to the grant payor/source, typically the Nevada Department of Education.

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Once the payor has approved, the Resource Management department uploads the new budget to the SAP system.

Transfers between program or function classifications must be approved by the School Board.

PURCHASING

Although the request to make a purchase can come from multiple individuals within a department, typically only one or two individuals have access to input the request into the School District’s SAP system for the department. The appropriate budget administrator must electronically approve each request, in the SAP system. If the purchase is over $25,000, at least two bids must be submitted or caused to be submitted. Purchases over $50,000 generally require competition via formal bid or request for proposal as well as approval by the Board of School Trustees.

Once the request is submitted into SAP via a “shopping cart”, all required competition is completed, and Board approval obtained as necessary, the Purchasing department will review and create a purchase order. The purchase order is sent to the vendor to place the order. Once the goods are received, the packing list or other proof of delivery is sent to the Purchasing Department to complete a goods receipt. The vendor sends an invoice to the Accounts Payable department who compares the information to the purchase order. Once verified, the Accounts Payable department will issue payment.

PURCHASING CARDS (P-CARDS) Generally, each department has an individual who maintains custody of the department credit card (a/k/a purchasing card or “p-card”) in a secure location, such as a locked desk drawer or safe. Each department’s card is limited in both daily purchases, category of purchase (e.g., fuel and food), and total credit limit. Employees within the department can request to use the credit card to make necessary department purchases. Employees must fill out a form indicating the purpose, price, and date of purchase before the card is released. Once the request is approved by a supervisor, the card is released and can be used by the employee.

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After a purchase is made, the employee must return the card with an itemized receipt. The employee will sign the original paperwork with a return date. The individual who maintains custody of the card will maintain a log book of the transaction and scan and upload the receipt to PaymentNet®. PaymentNet® is a transaction database through JP Morgan Chase. A supervisor or director will review and approve the charges in PaymentNet® every month. These charges are also reviewed by the Purchasing department for appropriateness and proper documentation.

PAYROLL

The School District maintains an exception-based payroll system. This means employees will be paid their contract amount each pay period unless there is an exception, such as overtime or sick leave. Certified staff are generally paid their contract salary with few exceptions. Support staff are paid hourly and typically have more exceptions.

When extra pay is requested, such as overtime, the employee must fill out a form CCF-5 and submit the completed form to their supervisor. Both the supervisor and department head sign the form, which is sent to pay data services who review for accuracy in hours and coding. The CCF-5 forms are then sent to the Central Information Services department who enters the data into the School District payroll system. The Payroll department then compares the CCF-5 forms to the data entered by central information services.

For employee absences, the employee must fill out a form CCF-101. Once complete, the same process is used as with form CCF-5 described above.

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INTERNAL CONTROLS SURVEY

We created a survey for the purpose of obtaining information from School District employees regarding their concerns, if any, related to internal controls over the School District’s assets and various accounting functions. The survey was administered through the School District to certain employees within the business and finance, operational, and teaching and learning units. We received 2,805 responses to the survey. The following graphs provide visuals on the responses received for certain questions:

DO YOU HAVE CONCERNS OF FRAUD WITHIN THE SCHOOL DISTRICT?

Figure 1

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DO YOU FEEL INTERNAL CONTROLS ARE IN PLACE TO PREVENT FRAUD WITHIN THE SCHOOL DISTRICT?

Figure 2

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ARE YOU AWARE IF THE SCHOOL DISTRICT HAS A WRITTEN POLICY IN PLACE EXPLAINING WHAT CONSTITUTES FRAUD AND THE RELATED CONSEQUENCES?

Figure 3

According to the Association of Certified Fraud Examiners’ (“ACFE”) 2018 Report to the Nations1, the presence of a specific anti-fraud policy resulted in a 47% reduction in the median fraud loss amount.

1 https://www.acfe.com/report-to-the-nations/2018/

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IS THERE A REPORTING SYSTEM IN PLACE FOR YOU TO REPORT SUSPECTED FRAUD CONCERNS?

Figure 4

According to the ACFE’s 2018 Report to the Nations2, tips are by far the most common initial detection method of fraud schemes.

2 https://www.acfe.com/report-to-the-nations/2018/

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INTERNAL CONTROLS RECOMMENDATIONS

To obtain an understanding of the internal controls currently in place, we conducted interviews with 409 employees within the School District’s business and finance, operational, and teaching and learning units. The observations made by us are provided to make the School District aware of its potential fraud-related risks. We provided 13 recommendations for areas deemed by us to have internal control weaknesses. Our observations were not physically observed but observed through our information gathering interviews. We have separated our observations by department. Workpaper 2 provides a list of departments where no fraud-related internal control concerns were identified. Workpaper 3 provides a summary of the 13 recommendations made within this report.

The School District should review the following observations and corresponding recommendations to determine if the benefit of changing the current processes in place to reduce fraud risk exceeds the associated costs.

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GENERAL SCHOOL DISTRICT RECOMMENDATIONS

1. Observation The School District’s policies and regulations manual do not discuss what employee fraud is and its consequences.

Potential Risk

Employees may not know what constitutes fraud. Lack of fraud awareness can inherently increase fraud risk within an organization.

Recommendation A fraud awareness section should be included in the employee handbook. This section should address what constitutes fraud in the workplace and what the consequences of committing fraud would be. Management should communicate this policy to its employees on a periodic basis to increase the perception of detection among employees. A sample fraud policy created by the ACFE has been provided in Workpaper 4.

2. Observation A confidential hotline is not available for employees to report suspicious activity.

Potential Risk If a hotline is not available for employees to report suspicious activity, employee theft or known instances of fraud may go unreported. This can result in delayed detection of a fraud scheme and increased losses.

Recommendation A third-party anonymous reporting system for employees to report fraud should be implemented. The reporting system should be composed of both an external hotline number that employees can call to report any fraud and abuse along with an online submission form. The ability of employees to report fraud anonymously to a third-party is important to reduce an employee’s fear of retaliation.

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GENERAL OBSERVATIONS – SCHOOL LEVEL

We conducted interviews with principals and school bankers at the following locations: • Arbor View High School • Coronado High School • Desert Oasis High School • East Career and Tech Academy • Foothill High School • Las Vegas Academy • Las Vegas High School • Moapa High School • Palo Verde High School • Rancho High School • Shadow Ridge High School • Silverado High School • Southeast Career and Tech Academy • West Career and Tech Academy

INTERNAL CONTROL STRENGTHS Although each school has some autonomy in how they prefer to operate, the internal control strengths and weaknesses are generally consistent between locations. The following internal control strengths at the school level were identified during our examination: • School bank office is secure with only authorized personnel able to gain access. • Cash deposits are stored in a secure location, such as a locked drawer or safe. • Bank deposits are picked up by armored vehicle. • The duties of printing and signing checks are segregated. • Credit card and budget purchases are monitored by the School District. • Vendors are verified prior to payments being issued. • Principals and bankers review accounts payable disbursements at least once per month. • School organizations need approval by the principal prior to initiating fundraising activities, which includes estimated funds to be raised.

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RECOMMENDATIONS 1. Observation The same person handling cash receipts for activities/fundraising may also be performing the bank reconciliations for the School bank account(s).

Potential Risk Allowing the same individual to handle cash receipts and perform the bank reconciliations increases the risk of cash theft being concealed making it more difficult to detect.

Recommendation An individual separate of handling cash receipts and check disbursements should perform the monthly bank reconciliations. This will help increase the detection of cash theft within the school.

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ACCOUNTS PAYABLE INTERNAL CONTROL STRENGTHS The following internal control strengths within the Accounts Payable department were identified during our examination: • Accounts payable ties purchase order to invoice to receiving slip. • Accounts payable is unable to print checks without a purchase order. Purchase orders are created by the Purchasing department, segregated from accounts payable. • Treasury department maintains check stock and only provides accounts payable with the specific number of checks needed to complete an approved check run. • Printed checks are compared to the total number of checks released by the Treasury department by staff independent of requesting and creating check payments. • Positive pay is utilized which would alert the Treasury department of any payee and amount changes made after checks were printed. • Multi-level authorizations are required by Accounts Payable, Purchasing, and department heads to disburse funds.

RECOMMENDATIONS 1. Observation The accounts payable system can allow a payment to be made even if the payment amount does not match the purchase order amount in SAP.

Potential Risk The School District can inadvertently overpay for products ordered causing budgeting issues or potentially allowing for kickback schemes/theft of overpayments with vendors.

Recommendation The accounts payable system should deny payment unless the amount matches the purchase order amount. This will prevent paying vendors more than authorized by the department initiating the purchase.

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ADMINISTRATIVE SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Administrative Services department were identified during our examination: • Almost no handling of assets or cash. • On rare occasions, cashier’s checks are received from teachers coming out of retirement to repay early retirement payout. These payments are received by administrative services and forwarded to accounting for deposit.

RECOMMENDATIONS 1. Observation Cashier’s checks are not stamped “for deposit only” when received.

Potential Risk When cashier’s checks are not stamped “for deposit only” upon initial receipt, there is an increased chance the check can be cashed or misappropriated.

Recommendation All payments received should be endorse stamped “for deposit only” to a School District bank account. This will reduce the risk of misappropriation of cashier’s checks received.

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BUDGET INTERNAL CONTROL STRENGTHS The following internal control strengths within the Budget department were identified during our examination: • No handling or actual disbursement of funds. • SAP system is designed to prevent purchases from being made if it causes a budget overage. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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BUILDING DEPARTMENT INTERNAL CONTROL STRENGTHS The following internal control strengths within the Building department were identified during our examination: • Overtime must be pre-approved by supervisors. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section). • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which require mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department.

RECOMMENDATIONS 1. Observation Field staff can take School District vehicles home without maintaining a log of their daily travel.

Potential Risk Field staff can potentially utilize School District vehicles for personal use in addition to what is allowable.

Recommendation Field staff who can take their School District vehicles home should maintain a daily log indicating where they drove and total mileage. Although procedures are in place to review total mileage and fuel costs, unauthorized personal use of the vehicles may be easier to detect if daily logs and fuel/mileage totals are inconsistent.

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BUSINESS AND FINANCE INTERNAL CONTROL STRENGTHS The following internal control strengths within the Business and Finance department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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CENTRAL INFORMATION SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Central Information Service department were identified during our examination: • No handling of cash or assets. • Server room is secure with only authorized employees able to gain access. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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COLLEGE CAREER AND EQUITY INTERNAL CONTROL STRENGTHS The following internal control strengths within the College, Career, and Equity department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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COMPLIANCE AND BUILDING OPERATIONS INTERNAL CONTROL STRENGTHS The following internal control strengths within the Compliance and Building Operations department were identified during our examination: • No handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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CONSTRUCTION/CONSTRUCTION MANAGEMENT INTERNAL CONTROL STRENGTHS The following internal control strengths within the Construction and Construction Management departments were identified during our examination: • No handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section). • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which requires mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department.

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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CONTRACTS AND SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Contracts and Services department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section). • Conflict of interest policy is in place.

RECOMMENDATIONS 1. Observation Non-itemized receipts are occasionally accepted for p-card purchases.

Potential Risk Non-itemized receipts increase the risk of personal charges being made on School District p-cards.

Recommendation Itemized receipts should be required for all purchases. If no itemized receipt can be provided, a form should be completed by the listing the items purchased. This form should be signed by the purchaser, a supervisor, and submitted to the Purchasing department with the non-itemized receipt.

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CONTRACTS, PROCUREMENT, AND COMPLIANCE INTERNAL CONTROL STRENGTHS The following internal control strengths within the Contracts, Procurement, and Compliance department were identified during our examination: • The eBuilder bidding system locks bids until bids are closed to prevent reviewing bids early. • Two passwords are required to open bids by two separate individuals.

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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CUSTODIAL OPERATIONS, LANDSCAPING, AND GROUNDS INTERNAL CONTROL STRENGTHS The following internal control strengths within the Custodial Operations, Landscaping, and Grounds department were identified during our examination: • No handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section). • Parts and supplies inventory is located in a secure location and monitored using an inventory control system. • Vehicles are assigned to the same employees with tools assigned to vehicles. • Supplies inventory is maintained by one individual and stored in a secure cage within the warehouse. • Security cameras are utilized within the warehouse. • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which requires mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department.

RECOMMENDATIONS 1. Observation Average labor time for projects is not tracked and compared.

Potential Risk Misuse of employee time can go undetected.

Recommendation Labor time and other related costs should be tracked and compared on a periodic basis. This will help identify anomalies that can be further investigated to determine the cause. This will also increase perception of detection reducing the risk of time theft by employees.

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DATA PERFORMANCE MANAGEMENT AND PROJECT FACILITATION INTERNAL CONTROL STRENGTHS The following internal control strengths within the Data Performance Management and Project Facilitation department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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DEMOGRAPHICS, ZONING, AND GIS INFORMATION INTERNAL CONTROL STRENGTHS The following internal control strengths within the Demographics, Zoning, and GIS Information department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section). • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which requires mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department.

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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DISTRICT FORMS INTERNAL CONTROL STRENGTHS The following internal control strengths within the District Forms department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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EMPLOYEE BENEFITS INTERNAL CONTROL STRENGTHS The following internal control strengths within the Employee Benefits department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section). • Several review processes are in place to prevent unauthorized benefits. • Most benefit vendors are paid via ACH transfer automatically from employee payroll deductions.

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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EMPLOYEE BUSINESS TRAINING INTERNAL CONTROL STRENGTHS The following internal control strengths within the Employee Business Training department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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EMPLOYEE CONTRACTS AND COMPENSATION INTERNAL CONTROL STRENGTHS The following internal control strengths within the Employee Contracts and Compensation department were identified during our examination: • No handling of cash or assets. • The department acts as an intermediary between School District departments and payroll. • Numerous review processes in place to prevent inaccurate or unauthorized pay data entered into Mainframe software. • Payroll performs review of changes made to certified employees. • Signatures and proper approvals are required for pay information and changes to be processed. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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EMPLOYEE ONBOARDING AND DEVELOPMENT INTERNAL CONTROL STRENGTHS The following internal control strengths within the Employee Onboarding and Development department were identified during our examination: • No handling of cash or assets. Any payments received for the Alternative Routes to Licensure program are paid online by credit card. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS 1. Observation Donations by companies for gift baskets are given to the same employee who coordinates receipt of the donations.

Potential Risk Donations, such as gift cards, could be appropriated without detection if the same employee requesting and coordinating donations is also receiving the donations.

Recommendation A separate employee should handle and record all donations received. The staff training supervisor can then reconcile donations received to what was expected. This will reduce the risk of potential theft of donations received.

According to the School District, the Employee Onboarding and Development department is in the process of creating a link to a Google form where donors will be required to electronically submit donation information. Should this control be implemented, it will mitigate the potential risks identified by making several individuals within the department aware of what donations they should be expecting.

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ENVIRONMENTAL SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Environmental Services department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section). • Inventory is held in a secure location where only authorized individuals have access. • Inventory counts are performed regularly. • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which requires mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department.

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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EQUIPMENT AND INSTRUCTIONAL INTERNAL CONTROL STRENGTHS The following internal control strengths within the Equipment and Instructional department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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FACILITIES AND BOND FUND FINANCIAL MANAGEMENT INTERNAL CONTROL STRENGTHS The following internal control strengths within the Facilities and Bond Fund Financial Management departments were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section). • Internal Audit department is consistently reviewing project costs for capital projects.

RECOMMENDATIONS 1. Observation There is currently no quality control in place to verify if parts purchased for repairs are installed by technicians.

Potential Risk Parts could be purchased for personal use or resold by technicians.

Recommendation An individual separate of purchasing and technicians should perform periodic checks to verify items ordered were installed and used for intended purposes.

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FIELD SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Field Services department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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FOOD SERVICE/FOOD SERVICE PURCHASING TEAM INTERNAL CONTROL STRENGTHS The following internal control strengths within the Food Service and Food Service Purchasing Team departments were identified during our examination: • Facilities are fenced with restricted keypad access. • Security cameras are located both outside of facilities and inside warehouse. • Food inventory shrinkage/spoilage is monitored to maintain between 3% to 5% of total food costs. • A food service manager is located at each school site to help control and monitor food inventory. • Food service vehicle use and mileage are reviewed by both Transportation and the Food Service department. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Occasionally refund checks are issued for student accounts. Two signatures are required with bank accounts reconciled by food service accountants on a monthly basis. • Cash received at schools are counted and reconciled by two individuals. A verifier also reviews the cash count with a manager. • Food service accountants perform a reconciliation of bank deposits to the point-of-sale systems within the schools on a monthly basis.

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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GENERAL/SCHOOL ACCOUNTING INTERNAL CONTROL STRENGTHS The following internal control strengths within the General Accounting and School Accounting departments were identified during our examination: • Accounting duties are segregated so no one individual is able to handle all aspects of a transaction. • All vendors are formally verified with proper paperwork before payment can be issued. • Accounting system will flag any information submitted by the vendor that does not match original paperwork received. • Principals do not have authority to print or create checks. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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GRANTS FISCAL SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Grants Fiscal Services department were identified during our examination: • No handling of cash or assets. • Multi-level review processes in place for grant expenditures (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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GRAPHICS ARTS CENTER INTERNAL CONTROL STRENGTHS The following internal control strengths within the Graphics Arts Center department were identified during our examination: • Checks received are immediately stamped “for deposit only”. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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HCM PROJECT INTERNAL CONTROL STRENGTHS The following internal control strengths within the HCM Project department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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HUMAN CAPITAL MANAGEMENT INTERNAL CONTROL STRENGTHS The following internal control strengths within the Human Capital Management department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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HUMAN RESOURCES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Human Resources department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Vending revenue purchases for employees must have detailed receipts submitted to the School District for reimbursement. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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IDENTITY MANAGEMENT AND APPLICATION SECURITY TEAM INTERNAL CONTROL STRENGTHS The following internal control strengths within the Identity Management and Application Security Team department were identified during our examination: • No handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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INTERNET OPERATIONS INTERNAL CONTROL STRENGTHS The following internal control strengths within the Internet Operations department were identified during our examination: • No handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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MAIL SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Mail Services department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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MAINTENANCE/ZONE MAINTENANCE/MAINTENANCE PURCHASING TEAM INTERNAL CONTROL STRENGTHS The following internal control strengths within the Maintenance and Maintenance Purchasing Team departments were identified during our examination: • Stock and supply inventory is stored in a secure location. • Security cameras are utilized in warehouses. • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which requires mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department. • Overtime must be pre-authorized by supervisors. • A checklist is maintained for items to be returned when employees leave the School District. • Specialty tools must be formally checked in and out of the tool cage. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS 1. Observation Not all inventory items are accounted for by the Maintenance department.

Potential Risk Employee theft of inventory items may occur and go undetected.

Recommendation All inventory items should be tracked by maintenance. Smaller items can be weighed and larger items counted. Conducting periodic counts of inventory will also help increase the perception of detection and deter employees from stealing.

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2. Observation Average labor time for projects is not tracked and compared on a periodic basis.

Potential Risk Misuse of employee time can go undetected.

Recommendation Labor time and other related costs should be tracked and compared on a periodic basis. This will help identify anomalies that can be further investigated to determine the cause. This will also increase perception of detection reducing the risk of time theft by employees.

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NETWORKING SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Networking Services department were identified during our examination: • No handling of cash or assets. • Equipment that is retired is accounted for and reported to accounting. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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OFFICE OF THE DEPUTY SUPERINTENDENT INTERNAL CONTROL STRENGTHS The following internal control strengths within the Office of the Deputy Superintendent department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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OPERATIONAL RISK SERVICES – INSURANCE/PROPERTY AND LIABILITY CLAIMS INTERNAL CONTROL STRENGTHS The following internal control strengths within the Operational Risk Services-Insurance and Operational Risk Services-Property and Liability Claims departments were identified during our examination: • Repayments from damages by students are paid directly to the court who issues a monthly payment to the operational risk services department. The accounting coordinator receives the check payments and prepares the deposit. A copy of the check is sent to the claims examiner to record the payments for the incident/claim. • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which requires mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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OPERATIONAL SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Operational Services department were identified during our examination: • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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PAYROLL INTERNAL CONTROL STRENGTHS The following internal control strengths within the Payroll department were identified during our examination: • Custody, recording, and approval duties for payroll are segregated (see “Centralized Procedures” section). • Several reconciliation methods are utilized to verify payroll is performed accurately. • Access to check stock is limited and located in a secure location. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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PURCHASING/PURCHASING BUSINESS SYSTEMS SUPPORT/PURCHASING, WAREHOUSING, MAIL SERVICE, AND GRAPHIC ARTS INTERNAL CONTROL STRENGTHS The following internal control strengths within the Purchasing, Purchasing Business Systems Support, and Warehousing, Mail Service, and Graphic Arts departments were identified during our examination: • No actual handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Employees in purchasing have no access to the purchased goods. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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REAL PROPERTY MANAGEMENT INTERNAL CONTROL STRENGTHS The following internal control strengths within the Real Property Management department were identified during our examination: • No handling of cash. • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which requires mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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RESOURCE MANAGEMENT INTERNAL CONTROL STRENGTHS The following internal control strengths within the Resource Management department were identified during our examination: • No handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Crystal reports are pulled from SAP data by Coordinators to perform budget analytics verifying budgets are in compliance. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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RISK AND ENVIRONMENTAL SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Risk and Environmental Services department were identified during our examination: • No handling of cash. • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which requires mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS 1. Observation Vehicles are not parked in a secure location overnight.

Potential Risk Vehicles may be at an increased risk for vandalism, damage, or syphoned fuel.

Recommendation School District vehicles should be stored in a secure area overnight, such as a fenced in parking lot. This will reduce the risk of vandalism, damage, or theft.

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SAFETY AND RISK SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Safety and Risk Services department were identified during our examination: • No handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Vehicle key fob with unique identifier is needed to gain access to fuel stations, which requires mileage to be entered. • Mileage reports are provided to the department for review each month by the Transportation department. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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SAP BASIS TEAM/SAP DEVELOPMENT TEAM INTERNAL CONTROL STRENGTHS The following internal control strengths within the SAP Basis team and SAP Development team departments were identified during our examination: • No actual handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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SCHOOL AND DEPARTMENT HUMAN CAPITAL MANAGEMENT SUPPORT/ SCHOOL AND DEPARTMENT RECRUITMENT LICENSED/SUPPORT STAFF INTERNAL CONTROL STRENGTHS The following internal control strengths within the School and Department Human Capital Management Support, School and Department Recruitment Licensed, and School and Department Recruitment Support Staff departments were identified during our examination: • No actual handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Employees in purchasing have no access to the purchased goods. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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SCHOOL BASED TECHNICIAN SUPPORT INTERNAL CONTROL STRENGTHS The following internal control strengths within the School Based Technician Support department were identified during our examination: • No actual handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • New equipment is inventoried through the SAP system. • Access to server room is limited to authorized individuals. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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SERVER UNIT INTERNAL CONTROL STRENGTHS The following internal control strengths within the Server Unit department were identified during our examination: • No actual handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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STRATEGIC BUDGET RESOURCES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Strategic Budget Resources department were identified during our examination: • No actual handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Strategic Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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SUBSTITUTE HIRING AND SUBSTITUTE APPLICATIONS INTERNAL CONTROL STRENGTHS The following internal control strengths within the Substitute Hiring and Substitute Applications department were identified during our examination: • No handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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SYSTEM ADMINISTRATION TEAM INTERNAL CONTROL STRENGTHS The following internal control strengths within the System Administration Team department were identified during our examination: • No actual handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • New equipment is inventoried through the SAP system. • Access to server room is limited to authorized individuals. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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TECHNICAL RESOURCES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Technical Resources department were identified during our examination: • No actual handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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TECHNOLOGY/TECHNOLOGY AND INFORMATION SYSTEMS SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the technology and technology and information Systems Services departments were identified during our examination: • No actual handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • New equipment is inventoried through the SAP system. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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TELECOMMUNICATION SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the Telecommunication Services department were identified during our examination: • No actual handling of cash. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • New equipment is inventoried through the SAP system. • Access to server room is limited to authorized individuals. • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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TRANSPORTATION INTERNAL CONTROL STRENGTHS The following internal control strengths within the Transportation department were identified during our examination: • No actual handling of cash. • Parts are located in secure cages with only certain authorized employees given access. • The transportation system in place tracks all vehicle maintenance and fuel usage. • The transportation system alerts the department if fuel is pumped too frequently with the same vehicle. • Fuel pumps limit the amount of fuel disbursed to the tank size of each vehicle. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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TREASURY INTERNAL CONTROL STRENGTHS The following internal control strengths within the Treasury department were identified during our examination: • Duties are segregated so all deposits are verified prior to pick up by armored vehicle. • Check receipts are scanned into SAP prior to bank deposit for an additional layer of verification. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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USER SUPPORT SERVICES INTERNAL CONTROL STRENGTHS The following internal control strengths within the User Support Services department were identified during our examination: • No actual handling of cash or assets. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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VEGAS PBS INTERNAL CONTROL STRENGTHS The following internal control strengths within the Vegas PBS department were identified during our examination: • Vegas PBS adheres to School District policies and procedures. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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WAREHOUSE INTERNAL CONTROL STRENGTHS The following internal control strengths within the Warehouse department were identified during our examination: • Warehouses are secured with only authorized employees able to gain access. • Security cameras are utilized in warehouses. • Specialty tools and parts must be formally checked in and out of secure cage through warehouse employee. • Purchases and p-card use require multi-level reviews (see “Centralized Procedures” section). • Budget process is centralized (see “Centralized Procedures” section).

RECOMMENDATIONS Due to the internal controls currently in place within the department, no recommendations were identified to further reduce the risk of employee theft/fraud.

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CONCLUSION

We conducted 409 interviews of School District employees focused on identifying key internal controls within the various departments examined. We have provided 13 general and department specific internal control recommendations within this report based on these interviews. As with any organization, fraud is possible within the School District. However, the risk can be reduced through the implementation of the aforementioned recommendations in addition to the internal controls that are currently in place. Overall, the School District’s internal control structure appears adequate and suitable for its environment.

Our observations, identified risks, and recommendations were determined solely by interviews with School District employees. We reserve the right to amend, modify, and or supplement this report if deemed necessary due to new information or clarification provided with respect to the processes and procedures in place.

Eide Bailly LLP

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Clark County School District Interviewee List

Name Unit Department Title

Juanita Abeyta Business & Finance Accounts Payable A/P Tech Judy Dumlao-Raval Business & Finance Accounts Payable A/P Tech Patti Smith Business & Finance Accounts Payable A/P Tech Jan Hodges Business & Finance Accounts Payable A/P Tech (Travel/Mileage) Jennifer Phillips Business & Finance Accounts Payable A/P Tech (Travel/Mileage) Kimber Watson Business & Finance Accounts Payable Accounts Payable Supervisor Sandra Christiansen Business & Finance Accounts Payable Assistant Accountant Margot Coronado Business & Finance Accounts Payable Coordinator III, Accounts Payable Manager Dillon Kay Business & Finance Budget Assistant Director Maria Gueder Business & Finance Budget Budget Assistant Sharena Lamping Business & Finance Budget Budget Assistant Rodney Foutz Business & Finance Budget Coordinator III Steve Maiello Business & Finance Budget Coordinator III Steven Osburn Business & Finance Budget Director II Jolene Markwith Business & Finance Business & Finance Administrative Secretary III Colleen Buescher Business & Finance Employee Benefits Accountant April Martin Business & Finance Employee Benefits Benefits Technician Nancy Santiago Business & Finance Employee Benefits Benefits Technician Robert Mead Business & Finance Employee Benefits Coordinator III, Benefits Supervisor Carla Nobles Business & Finance Finance Administrative Secretary III Diane Bartholomew Business & Finance Finance Deputy Chief Financial Officer Carrie Hasler Business & Finance General Accounting Accountant Amy Pursell Business & Finance General Accounting Administrative Secretary I Roberta Becker Business & Finance General Accounting Assistant Director Nancy Allen Business & Finance General Accounting Coordinator I Shellon Skeete Business & Finance General Accounting Coordinator III (Purchasing Card) Shelly Hughes Business & Finance General Accounting Director II Odette Striegel Business & Finance General Accounting Junior Accountant (Purchasing Card) Malissa McClain Business & Finance Grants Fiscal Services (Formerly FADA) Administrative Clerk Karen Ballew Business & Finance Grants Fiscal Services (Formerly FADA) Assistant Accountant Lucia Rosati Business & Finance Grants Fiscal Services (Formerly FADA) Assistant Accountant Lynn Beggs Business & Finance Grants Fiscal Services (Formerly FADA) Assistant Accountant Pam Fugate Business & Finance Grants Fiscal Services (Formerly FADA) Assistant Accountant Evette Chaission Business & Finance Grants Fiscal Services (Formerly FADA) Budget Assistant Garfield Skeete Business & Finance Grants Fiscal Services (Formerly FADA) Budget Assistant Jamie Jaeger Business & Finance Grants Fiscal Services (Formerly FADA) Budget Assistant Judy Jackson Business & Finance Grants Fiscal Services (Formerly FADA) Budget Assistant Tonia Dankers Business & Finance Grants Fiscal Services (Formerly FADA) Coordinator II Darla Sommermeyer Business & Finance Grants Fiscal Services (Formerly FADA) Coordinator III Eric D. Christensen Business & Finance Grants Fiscal Services (Formerly FADA) Director II

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Name Unit Department Title

Marissa Ocampo Business & Finance Grants Fiscal Services/Title I Assistant Accountant Sandra Martinez-Gonzalez Business & Finance Grants Fiscal Services/Title I Assistant Accountant Sally Myers Business & Finance Grants Fiscal Services/Title I Budget Manager Jackie Tate Business & Finance Payroll Administrative Clerk Patricia McKeegan Business & Finance Payroll Coordinator IV Denise Farleigh Business & Finance Payroll Director III Mary Chavez Business & Finance Resource Management Budget Assistant Wendy Valvo Business & Finance Resource Management Budget Assistant James Hartzell Business & Finance Resource Management Coordinator III Donna Wright Business & Finance School Accounting Accountant Jim (Kelley) Colbert Business & Finance School Accounting Adm. Computer Serv. Specialist (School Banking) Amanda Popp Business & Finance School Accounting Assistant Accountant (Facility Usage) Joy Alvarado Business & Finance School Accounting Business Service Specialist (School Banking) Kristen Rowles Business & Finance School Accounting Coordinator I (Facility Usage & Admin Claiming) Ann M. Walters Business & Finance School Accounting Coordinator III Jeff Halsell Business & Finance Strategic Budget Resources Asistant Superintendent Lourdes Guerra Business & Finance Strategic Budget Resources Budget Assistant Tammi Rademaker Business & Finance Strategic Budget Resources Budget Assistant Darren Boyett Business & Finance Treasury Coordinator I Janz Pena Business & Finance Treasury Coordinator III, Cash & Investment Manager Denise Zimmardi Business & Finance Treasury Junior Accountant Christine Weiss Operational Services College, Career & Equity Unit Administrative Sectretary III Dr. Mike Barton Operational Services College, Career & Equity Unit Chief College, Career and Equity Officer Rosanne Richards Operational Services College, Career & Equity Unit Director III Dr. Diane V. Gullett Operational Services Office of the Deputy Superintendent Deputy Superintendent Kellie Ballard Operational Services Office of the Deputy Superintendent Director TJ Abbington Operational Services Office of the Deputy Superintendent Secretary III Tracy Szumilo Operational Services Administrative Services Class-Compensation Analyst Jean King Operational Services Administrative Services Coordinator III, Specialized HR Support Joseph Uy Operational Services Administrative Services Director II, Administrative Services Sabrina Boldwin Operational Services Administrative Services Personnel Analyst Shakinda Spaight Operational Services Administrative Services Personnel Analyst Shirley Young Operational Services Administrative Services Personnel Analyst Teresa Weaver Operational Services Administrative Services Secretary III Timothy Lighthart Operational Services Applications Administration Team Application Administrator I Debbie Miklich Operational Services Building Department Construction Documents Clerk Deb Levasseur Operational Services Building Department Office Supervisor Carl Jones Operational Services Central Desktop management Technical Support Manager Greg Halopoff Operational Services Central HR & Payroll Information Services Director Mary Shumate Operational Services Central Information Business & Finance Services Accountant Betty Perez Operational Services Central Information Business & Finance Services Administrative Secretary I Loren Dale Operational Services Central Information Business & Finance Services Director

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Name Unit Department Title

Tracy Viscosi Operational Services Central Information Services, Student Information Systems Director, Instruct. Bus. Process Expert Ron Mader Operational Services Compliance and Building Operations Director I, Compliance & Bldg. Operations Xochilt (Lucy) Romero Operational Services Compliance and Building Operations Personnel Analyst (Backgrounds & Facilities) Jennifer Morejon Operational Services Compliance and Building Operations Personnel Clerk (Photo Station & CPR) Leanne Brown Operational Services Compliance and Building Operations - FMLA/LOA Team Personnel Analyst (E-K) Maria Lopez Operational Services Compliance and Building Operations - FMLA/LOA Team Personnel Analyst (P-Z) Patrick Coll Operational Services Construction Management Construction Analyst/Contract Specialist Alan Imperial Operational Services Construction Management Coordinator III Frank Needham Operational Services Construction Management Coordinator III Justin Lam Operational Services Construction Management Coordinator IV Jeff Wagner Operational Services Construction Management Director IV Jesus Ibarra Operational Services Construction Management Drafting Records Manager Sharon Erlandson Operational Services Construction Management Senior Projet Scheduler Sandra Streeter-Pettack Operational Services Contracts and Services Buyer I Bryan Carey Operational Services Contracts and Services Buyer II Adele Prusa Operational Services Contracts and Services Buyer III Kristin Blake Operational Services Contracts and Services Coordinator IV Tom Nacos Operational Services Contracts and Services Director I Thomas Grossman Operational Services Contracts and Services Purchasing Analyst Michelle Brase Operational Services Contracts, Procurement, and Compliance Construction Documents Clerk Luci Davis Operational Services Contracts, Procurement, and Compliance Construction Documents Manager Sandra Worthen Operational Services Contracts, Procurement, and Compliance Office Specialist II Anthony Maietta Operational Services Custodial Operations, Landscaping, and Grounds Assistant Custodial Supervisor Jose J. Loeza Operational Services Custodial Operations, Landscaping, and Grounds Custodial Floaters/Subs Shawn Weis Operational Services Custodial Operations, Landscaping, and Grounds Custodial Supervisor Jamie Jauregui Operational Services Custodial Operations, Landscaping, and Grounds Mow Shop Ed Gaston Operational Services Custodial Operations, Landscaping, and Grounds Northeast Zone Oren Applequist Operational Services Custodial Operations, Landscaping, and Grounds Northwest Zone Vanessa Gonzales Operational Services Custodial Operations, Landscaping, and Grounds Office Specialist II Patricia D. Martinez Operational Services Custodial Operations, Landscaping, and Grounds Office Supervisor Jaclyn Canaday Operational Services Custodial Operations, Landscaping, and Grounds Operations Manager Margarita Morales Operational Services Custodial Operations, Landscaping, and Grounds Secretary III Lawrence Gonzales Operational Services Custodial Operations, Landscaping, and Grounds Southeast Zone Guillermo "Billy" Urista Operational Services Custodial Operations, Landscaping, and Grounds Southwest Zone Dario Angelo Operational Services Custodial Operations, Landscaping, and Grounds Support Staff Trainer Dashon Sanders Operational Services Custodial Operations, Landscaping, and Grounds Tree Trimming Michael Blouin Operational Services Data Control Team DP Machine Operator Susan Guevarra Operational Services Data Control Team Information Control Specialist Marissa Balba Operational Services Data Performance Management and Project Facilitation Class-Compensation Analyst Andrea Clarke Operational Services Data Performance Management and Project Facilitation Coordinator III, Data Performance Mgmt. & P.F. Venus Harrison Operational Services Data Performance Management and Project Facilitation Personnel Analyst Tony Prusa Operational Services Database Administration Team TISS Database Administation Manager

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Name Unit Department Title

Mike Tibbits Operational Services Database Administration Team TISS Database Administrator III Anthony "Tony" Weis Operational Services Demographics, Zoning and GIS Information Coordinator II Tracy Murphy Operational Services Demographics, Zoning and GIS Information Coordinator IV Rick Bladwin Operational Services Demographics, Zoning and GIS Information Director II Sheri Garbiso Operational Services Demographics, Zoning and GIS Information GIS Senior Analyst Lynne Zenier Operational Services Demographics, Zoning and GIS Information Office Supervisor Bianka Alvarez Operational Services Demographics, Zoning and GIS Information Secretary II Kent Prouty Operational Services Demographics, Zoning and GIS Information Technical Graphic Specialist Stacey Williams Operational Services District Forms Administrative Clerk Leonard Watkins Operational Services District Forms Utility Worker II Wes Lockhart Operational Services Employee Business Training Coordinator IV Sonja Middleton Operational Services Employee Contracts and Compensation Coordinator III, Compensation Joyce Herreria Operational Services Employee Contracts and Compensation Director I, Contracts Robyn Treska Operational Services Employee Contracts and Compensation Personnel Analyst Jody Willmott Operational Services Employee Contracts and Compensation Personnel Assistant Janice Duncan Operational Services Employee Contracts and Compensation Personnel Paydata Specialist Tracey Watson Operational Services Employee Contracts and Compensation Personnel Paydata Specialist Kerrie Gragson Operational Services Employee Contracts and Compensation Personnel Paydata Supervisor Sylvia young Operational Services Employee Contracts and Compensation Personnel Paydata Supervisor Jessica Bouchte Operational Services Employee Onboarding and Development Coordinator III, Onboarding and Development Devin Heintz Operational Services Employee Onboarding and Development Coordinator IV, Career Pathways Jennifer Varrato Operational Services Employee Onboarding and Development Director II, EOD Jennifer Ritter Operational Services Employee Onboarding and Development Project Facilitator Lisa Davis Operational Services Employee Onboarding and Development Project Facilitator Lillian Mares Operational Services Employee Onboarding and Development Staff Training Supervisor Lori Headrick Operational Services Environmental Services Director I Joel Dominguez Operational Services Environmental Services Environmental Project Monitor Supervisor James Evans Operational Services Environmental Services Hazardous Materials Field Technician Valerie Vaughn Operational Services Environmental Services Sample Control Clerk Alice Acosta Operational Services Equipment and Instructional Buyer I Chip Wright Operational Services Equipment and Instructional Buyer II David Linefsky Operational Services Equipment and Instructional Buyer III Ed Katz Operational Services Equipment and Instructional Buyer IV Karen Purdy Operational Services Equipment and Instructional Purchasing Supervisor II Brook Moffit Operational Services Facilities and Bond Fund Financial Management Accountant Julie Dunn Operational Services Facilities and Bond Fund Financial Management Accountant Patricia Cooke Operational Services Facilities and Bond Fund Financial Management Assistant Accountant (NE) Vivian Willis Operational Services Facilities and Bond Fund Financial Management Assistant Accountant (NW) Eva Wasiuta Operational Services Facilities and Bond Fund Financial Management Assistant Accountant (SE) Carol Mall Operational Services Facilities and Bond Fund Financial Management Coordinator III, Financial Analyst Peggy Moon Operational Services Facilities and Bond Fund Financial Management Coordinator III, Financial Data Management Ruby Alston Operational Services Facilities and Bond Fund Financial Management Director II

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Name Unit Department Title

Jessica Kreiter Operational Services Facilities and Bond Fund Financial Management Program Development Specialist Gaile Ferguson Operational Services Facilities Division Administrative Secretary Blake Cumbers Operational Services Facilities Division Associate Superintendent Allison Monette Operational Services Facilities Division Coordinator III Valerie Austin Operational Services Facilities Division Secretary III Keith Whitehead Operational Services Field Services Technical Support Manager Susan Smith Operational Services Food Service Administrative Secretary Jessica Sifuentes Operational Services Food Service Coordinator - Acct Michael Malich Operational Services Food Service Coordinator - Central Operations Lory Hayon Operational Services Food Service Coordinator - Dietitian Kristen Patrick Operational Services Food Service Coordinator - School Operations David Wines Operational Services Food Service Director Mario Saenz Operational Services Food Service FS Facilities, Ooperation & Maintenance Irene Chau Operational Services Food Service FS Personnel Manager Gary Carter Operational Services Food Service Region Supervisor - Southeast Teresa Zupkofska Operational Services Food Service Region Supervisor - Northeast Aida Rivera Operational Services Food Service Region Supervisor - Northwest Colleen Toia Operational Services Food Service Region Supervisor - Southwest Gary Rickling Operational Services Food Service Sr. Supervisor - Central Kitchen Clifton J. Broadway Operational Services Food Service Technical Support Manager Kevin Kuntz Operational Services Food Service Warehouse Supervisor - Operations Deon Ireland Operational Services Food Service Warehouse Supervisor - Transportation LeAnna Johnson Operational Services Food Service Purchasing Team Buyer II Stephanie Givens Operational Services Food Service Purchasing Team Buyer III Carol Poindexter Operational Services Food Service Purchasing Team Coordinator IV Dani Blackburn Operational Services Food Service Purchasing Team Purchasing Supervisor Dolores Bufanio Operational Services Graphics Arts Center Administrative Clerk Stan Saito Operational Services Graphics Arts Center Graphic Specialist Connie Crocker Operational Services Graphics Arts Center Office Specialist II Shelly Severin Operational Services Graphics Arts Center Supervisor Janet Lazarus Operational Services HCM Project Administrative Clerk Andre Yates Operational Services HCM Project Director, Business Process Expert Steve Cook Operational Services HR & Payroll Systems Team Senior Programming Analyst John Scheel Operational Services HR & Payroll Systems Team Senior Systems Analyst Patty Rosales Operational Services Human Capital Management Support/Support Staff Systems (Team 4) Director II, HCM-Team 4 Support Julie Contreras Operational Services Human Capital Management Support/Support Staff Systems (Team 4) Personnel Analyst Maria Ramirez Operational Services Human Capital Management Support/Support Staff Systems (Team 4) Personnel Assistant Vernedia Collins Operational Services Human Capital Management Support/Support Staff Systems (Team 4) Secretary III Debra Saletta Operational Services Human Resources Administrative Secretary I Linda Bostic Operational Services Human Resources Administrative Secretary III Andre Long Operational Services Human Resources Chief Human Resources Officer April Key Operational Services Human Resources Deputy Human Resources Officer

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Name Unit Department Title

Lisa Richardson Operational Services Human Resources Information Liaison Tashaan Swayne Operational Services Human Resources Security Specialist Amber Westerfield Operational Services Identity Management and Application Security Team Business Systems Security Specialist II Theron Tibbits Operational Services Identity Management and Application Security Team Database Administrator Diana Carvalho Operational Services Identity Management and Application Security Team Information Systems Help Desk Specialist John Navarro Operational Services Identity Management and Application Security Team Technical Support Manager Walter Lawson Operational Services Integrations Unit Network Infrastructure Integration Manager Eric Hunt Operational Services Internet-Interact Operations Technical Support Manager Judithflor Mendoza Operational Services Internet-Interact Operations USS Product Specialist Patricia Iturriaga Operational Services Mail Services Logistics Specialist II Genci Licanj Operational Services Maintenance Computer Tech I Karyn Caraway Operational Services Maintenance Coordinator III Richard Alvarez Operational Services Maintenance Database Analyst III Josh Chesnik Operational Services Maintenance Director IV Ken Hoeg Operational Services Maintenance Drafter Sally Barto Operational Services Maintenance Facilities Operations Analyst Robin Barrick Operational Services Maintenance Facility Control & Claims Rep

Portables and Special Projects Construction Analyst/Contract Perry Sparks Operational Services Maintenance Specialist

Joseph Borusiewicz Operational Services Maintenance Technology Specialist Ryan Darwick Operational Services Maintenance Warranty Program Supervisor Stephen Dellostritto Operational Services Maintenance Warranty Specialist Gwen Hanach Operational Services Maintenance Work Management Help Desk Specialist Michael McGrath Operational Services Maintenance Purchasing Team Coordinator IV Felomina Cintron Operational Services Maintenance Purchasing Team Logistics Specialist II Alicia Bragg Operational Services Networking Services Administrative Secretary I Randy Thomas Operational Services Networking Services Director Laura Picton-Hildreth Operational Services Operational Risk Services - Insurance Insurance Services Manager Clark Garner Operational Services Operational Risk Services - Insurance Senior Risk Services Analyst Jenalyn Stewart Operational Services Operational Risk Services - Property & Liability Claims Claims Examiner Jennifer Hannig Operational Services Operational Risk Services - Property & Liability Claims Claims Manager Eileen Wheelan Operational Services Operational Risk Services - Property & Liability Claims Coordinator IV Gary Truman Operational Services Operational Risk Services - Property & Liability Claims Senior Claims Examiner Rhonda Aviles Operational Services Operational Services Administrative Secretary III Turkesha Chatman Operational Services Operational Services Budget Assistant Rick Neal Operational Services Operational Services Chief Operating Officer Linda Butler Operational Services Operations Risk Services - Workers' Compensation Claims Manager Krystal Vasquez Operational Services Operations Risk Services - Workers' Compensation Claims Technician Mike Cowling Operational Services Operations Team Computer Operations Manager Mike Dixon Operational Services Operations Team Mainframe Operations Scheduling Specialist Eileen Milligan Operational Services Purchasing Business Systems Support Buyer II

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Name Unit Department Title

J.B. Dy-Ragos Operational Services Purchasing Business Systems Support Buyer III Robin Rankow Operational Services Purchasing Business Systems Support Coordinator IV Kasia Harris Operational Services Purchasing Business Systems Support Purchasing Analyst Michael Thrower Operational Services Purchasing Business Systems Support Purchasing Supervisor Steve Staggs Operational Services Purchasing, Warehousing, Mail Service and Graphic Arts Acting Director II Denise Bodet Operational Services Purchasing, Warehousing, Mail Service and Graphic Arts Receptionist/Help Desk Chrisopher Dingell Operational Services Real Property Management Coordinator IV Linda Perri Operational Services Real Property Management Director II Irma Coward Operational Services Real Property Management Realty Specialist Leaher Davis Operational Services Recruitment and Development Personnel Analyst Karla Cross Operational Services Risk and Environmental Services Department Administrative Secretary III Kimberly Krumland Operational Services Risk and Environmental Services Department Director III, Risk & Environmental Services Gaya Thuduwewatta Operational Services Risk and Environmental Services Department Jr. Accountant Andrea Denegin Operational Services Risk and Environmental Services Department RM Accounting Coordinator II Laura Manibog Operational Services Safety & Risk Services Risk Assessor Melliza Avina Operational Services Safety & Risk Services Risk Assessor Vernon Barrow Operational Services Safety & Risk Services Safety & Equipment Inspection Manager Michael Duffy Operational Services Safety & Risk Services Safety & Equipment Inspection Technicians Kathy Vignaud Operational Services Safety & Risk Services Safety Manager Brian Bogart Operational Services SAP Basis Team Applications Manager Kendall Davis Operational Services SAP Basis Team Basis Administrator II Colleen Storey Operational Services SAP Development Team Applications Manager Tamara Carrington Operational Services School and Department Human Capital Management Support (Team 1) Personnel Analyst Demetrius Johnson Operational Services School and Department Human Capital Management Support (Team 1) Principal on Special Assignment Connie Norte Operational Services School and Department Human Capital Management Support (Team 1) Secretary III Lisa Jackson Operational Services School and Department Human Capital Management Support (Team 2) Director II, HCM-Team 2 Support Lety Franke Operational Services School and Department Human Capital Management Support (Team 2) Secretary III Toby Babina Operational Services School and Department Human Capital Management Support (Team 3) Director II, HCM-Team 3 Support Stacy Smith Operational Services School and Department Human Capital Management Support (Team 3) Personnel Analyst Detra Baldwin Operational Services School and Department Human Capital Management Support (Team 3) Personnel Analyst (Licensure Services) Tya Mathis-Coleman Operational Services School and Department Recruitment Licensed Director 1, Recruit. Diversity & High-Need Areas Jessica Valdez Operational Services School and Department Recruitment Licensed Personnel Analyst Fran Gargano Operational Services School and Department Recruitment Licensed Secretary III Alicia Coleman Operational Services School and Department Recruitment Licensed - Team A (A-M) Personnel Assistant (E,I,J) Yolanda Wibowo Operational Services School and Department Recruitment Licensed - Team B (N-Z) Personnel Analyst Melissia Avant Operational Services School and Department Recruitment Licensed - Team B (N-Z) Personnel Assistant (P,Q,U,Z) Olga Mares Operational Services School and Department Recruitment Licensed - Team B (N-Z) Recruitment Specialist Nicole Alcantara Operational Services School and Department Recruitment Licensed - Team B (N-Z) Secretary II Shannon Donlin Operational Services School and Department Recruitment Support Staff Director I, Recruit. & Support Staff Applications Kristina Ramirez Operational Services School and Department Recruitment Support Staff - A-E Personnel Analyst Lisa Guerin Operational Services School and Department Recruitment Support Staff - Facilities Personnel Analyst Anna Gyulasaryan Operational Services School and Department Recruitment Support Staff - Facilities Personnel Assistant

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Name Unit Department Title

Veronica Arreguin Operational Services School and Department Recruitment Support Staff - Food Service Personnel Analyst-Bilingual Edgar Kazanchyan Operational Services School and Department Recruitment Support Staff - Food Service Personnel Assistant Kim Wharton Operational Services School and Department Recruitment Support Staff - L-O Personnel Analyst Laura Martinez Operational Services School and Department Recruitment Support Staff - P-R Personnel Analyst Shaynelle Burks Operational Services School and Department Recruitment Support Staff - Transportation Personnel Analyst Tiffany Hughes Operational Services School and Department Recruitment Support Staff - Transportation Personnel Assistant Almira Fontanilla Operational Services School and Department Recruitment Support Staff - T-Z Personnel Analyst Charles Albanese Operational Services School Based Technician Support User Support Services Manager Jim Beckett Operational Services Server Unit Technical Support Manager Lisa Grizzel Operational Services SIS Team Applications Manager Donald Pelca Operational Services SIS Team Enterprise Systems Integration Specialist Cindy Frerking Operational Services SIS Team TISS Database Analyst III Debbie Tibbles Operational Services Student Record Services Administrative Clerk Greg Manzi Operational Services Student Record Services Director I Michelle Wesley Operational Services Student Record Services Office Manager Kimberly Daniels Operational Services Substitute Hiring and Substitute Applications Director II, Recruitment: Substitute Services Gale Stephenson Operational Services Substitute Hiring and Substitute Applications Personnel Assistant Shirley Gales Operational Services Substitute Hiring and Substitute Applications Personnel Assistant Sonia A. Medrano Operational Services Substitute Hiring and Substitute Applications Personnel Paydata Specialist Christine Lourenco Operational Services Substitute Hiring and Substitute Applications Secretary III Rodney Libby Operational Services Systems Administration Team Server Administrator I David Baughn Operational Services Systems Administration Team Server Administrator II Tony Cartellone Operational Services Systems Administration Team Systems Administration Manager Pete Christensen Operational Services Systems Administration Team Systems Software Analyst Troy Miller Operational Services Technical Resources (Internet-Interact Operations) Director, Technical Resources Chris Sinanian Operational Services Technical Resources (Internet-Interact Operations) Technical Support Manager Jessica Fry Operational Services Technology & Information Systems Services Division Administrative Assistant Monica Rainbolt Operational Services Technology & Information Systems Services Division Budget Assistant Dan Wray Operational Services Technology & Information Systems Services Division Chief Technology Officer Tim Chounard Operational Services Technology Support Help Desk Technical Support Manager Troy Eggleston Operational Services Telecommunication Services Coordinator IV Scott Young Operational Services Telecommunication Services Voice Communication Network Manager Shannon Evans Operational Services Transportation Director IV Mira Gonzalez Operational Services Transportation Secretary III Christine Gordon Operational Services Transportation Transportation Operations Supervisor Raymond Negrete Operational Services Transportation - Arville Coordinator IV, Gen. Ed. Kim Larsen Operational Services Transportation - Arville Operations Manager Shane Byrne Operational Services Transportation - Arville Operations Manager Brandy Lira Operational Services Transportation - Arville Secretary III Carisa Hine Operational Services Transportation - Arville Transportation Investigator Loretta neal Operational Services Transportation - Arville Transportation Investigator Tammi Rose Operational Services Transportation - Arville Transportation Operations Supervisor

Reference 6.01(A) Page 8 of 10 Page 92 of 100 EIDE BAILLY INTERNAL CONTROLSWorkpaper 1 EXAMINATION REPORT

Name Unit Department Title

Michael Turner Operational Services Transportation - Cheyenne Operations Manager Carol jansak Operational Services Transportation - Cheyenne Secretary III Natalie Flanagan Operational Services Transportation - Eastern (Arville) Dispatcher Karen Johnson Operational Services Transportation - Russell Director I, Compliance and Safety Shawnique Van Alen Operational Services Transportation Northwest GIS Technician I Adrian Markezic Operational Services Transportation Northwest GIS Technician II Marcelo Valenzuela Operational Services Transportation Northwest Operations Manager Sunni Sung Operational Services Transportation Wallace Assistant Accountant Sports/Trip Billing Brandon Yacub Operational Services Transportation Wallace Operations Manager Paul Shelley Operational Services Transportation Wallace - Vehicle Maintenance Director I Bruce Clark Operational Services Transportation Wallace - Vehicle Maintenance Fleet maintenance Manager Elliott Sijacic Operational Services Transportation Wallace - Vehicle Maintenance Parts Supervisor Lydia Oberst Operational Services Transportation Wallace - Vehicle Maintenance Secretary III Lawrence Bell Operational Services Tropical Warehouse Logistics Specialist I Victoria Greenwood Operational Services Tropical Warehouse Logistics Specialist II Jennifer Andricopulos Operational Services User Support Services Director Jolene Alvey Operational Services User Support Services Office Specialist II Bruce Spotleson Operational Services Vegas PBS Director, Corporate Partnerships Dr. Niki Bates Operational Services Vegas PBS Director, Educational Media Services John Turner Operational Services Vegas PBS Director, Engineering, IT, Emergency Response Kareem Hatcher Operational Services Vegas PBS Director, Production Debra Solt Operational Services Vegas PBS Director, WorkForce Development Beth Rubins Operational Services Vegas PBS Grant Writer, Coordinator III Jeanne Brown Operational Services Vegas PBS Office Supervisor Craig Durnen Operational Services Vegas PBS Techinical Support Manager, Engineering Eoles Burist Operational Services Warehouse II Equipment Specialist Jim Gliddon Operational Services Warehouse II Standards Specialist Jay Summers Operational Services WWW Production Services Coordinator Guillermo Maldonado Operational Services WWW Production Services Coordinator III Crystal Gittler Operational Services WWW Production Services Web Designer II Tommy Lien Operational Services WWW Production Services Web Programmer III Diane Stauffer Operational Services Zone Maintenance Admin. Secretary III Charles E. Anderson Operational Services Zone Maintenance Director III Yvonne Trujillo Operational Services Zone Maintenance - Maintenance Payroll & HR Administrative Clerk William Motis Operational Services Zone Maintenance - NE Team Coordinator III Candice Bass Operational Services Zone Maintenance - NE Team Dispatcher/Scheduler Ralph Foster Operational Services Zone Maintenance - NE Team NE3 Operations Manager Tom Crocker Operational Services Zone Maintenance - NE Team Zone Operations Manager Rudy Pope Operational Services Zone Maintenance - NW Team Coordinator IV George Ruiz Operational Services Zone Maintenance - NW Team Dispatcher/Scheduler Donald Haynes Operational Services Zone Maintenance - NW Team NW2 Operations Manager Gregg Peterson Operational Services Zone Maintenance - NW Team Zone Operations Manager

Reference 6.01(A) Page 9 of 10 Page 93 of 100 EIDE BAILLY INTERNAL CONTROLSWorkpaper 1 EXAMINATION REPORT

Name Unit Department Title

Jack Viscosi Operational Services Zone Maintenance - SE Team Coordinator IV Weston Griffith Operational Services Zone Maintenance - SE Team Dispatcher/Scheduler Ray Heimiller Operational Services Zone Maintenance - SE Team Zone Operations Manager Deanna Perry Operational Services Zone Maintenance - Stock & Supply Secretary II Jennie Villas Operational Services Zone Maintenance - SW Team Dispatcher/Scheduler Roy Hansen Operational Services Zone Maintenance - SW Team SW3 Operations Manager Stephen Walz Operational Services Zone Maintenance - SW Team Zone Operations Manager Adele Udy Teaching and Learning Arbor View HS Banker Kevin McPartlin Teaching and Learning Arbor View HS Principal Irma Ballard Teaching and Learning Coronado HS Banker Mike Piccininni Teaching and Learning Coronado HS Principal Evelina Sulrzycki Teaching and Learning Desert Oasis HS Banker Kelly O'Rourke Teaching and Learning Desert Oasis HS Principal Caitlin Malmedal Teaching and Learning East C.T.A Banker Korie Farrell Teaching and Learning Foothill HS Banker Lisa Burkhead Teaching and Learning Foothill HS Principal Lorraine Babij Teaching and Learning Green Valley HS Banker Kent Roberts Teaching and Learning Green Valley HS Principal Shauna Wood Teaching and Learning Las Vegas Academy Banker Scott Walker Teaching and Learning Las Vegas Academy Principal Debbie Brockett Teaching and Learning Las Vegas HS Principal Heather Larsen Teaching and Learning Moapa HS Banker Hal Mortensen Teaching and Learning Moapa HS Principal Anne Wayne Teaching and Learning Palo Verde HS Banker Darren Sweikert Teaching and Learning Palo Verde HS Principal Jacqueline Collins Teaching and Learning Rancho HS Banker James Kuzma Teaching and Learning Rancho HS Principal Shannon Berge Teaching and Learning Shadow Ridge HS Banker Travis Warnick Teaching and Learning Shadow Ridge HS Principal Kara Urbina Teaching and Learning Silverado HS Banker Jaime Ditto Teaching and Learning Silverado HS Principal Heidi Lange Teaching and Learning Southeast C.T.A. Banker Ryan Cordia Teaching and Learning Southeast C.T.A. Principal Amy Dockter-Rozar Teaching and Learning West C.T.A Principal Sara Baca Teaching and Learning West C.T.A Banker

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Clark County School District Internal Controls Examination Summary List of Departments with No Recommendations Due to Current Internal Control Structure in Place

Department Name Budget Business and Finance Central Information Services College Career and Equity Construction/Construction Management Contracts, Procurement, and Compliance Data Performance Management and Project Facilitation Demographics, Zoning, and GIS Information District Forms Employee Benefits Employee Business Training Employee Contracts and Compensation Environmental Services Eqiupment and Instructional Field Services Food Service/Food Service Purchasing Team General/School Accounting Grants Fiscal Services Graphics Arts Center HCM Project Human Capital Management Human Resources Identity Mangement and Application Security Team Internet Operations Mail Services Networking Services Office of the Deputy Superintendent Operational Risk Services - Insurance/Property and Liability Claims Operational Services Payroll Purchasing/Purchasing Business Systems Support/Purchasing, Warehousing, Mail Service, and Graphic Arts Real Property Management Resource Management Safety and Risk Services SAP Basis Team/SAP Development Team School and Department Human Capital Management Support/School and Department Recruitment Licensed/Support Staff School Based Technician Support Server Unit Strategic Budget Resources Substitute Hiring and Substitute Applications System Administration Team Technical Resources Technology/Technology and Information Systems Services Telecommunication Services Transportation Treasury User Support Services Vegas PBS Warehouse

ReferencePage 1 of6.01(A) 1 Page 95 of 100 EIDE BAILLY INTERNAL CONTROLSWorkpaper 3 EXAMINATION REPORT

Clark County School District Internal Controls Examination Summary of Recommendations by Department

Department Name Summary of Recommendation(s) The current AP system allows for payment to be issued even if the payment does not match the purchase order Accounts Payable amount in SAP. It is recommended the AP system be updated to deny payments that do not match purchase order amounts. Cashier's checks received are not stamped with a "for deposit only" endorsement immediately when received. This is Administrative Services recommended to reduce risk of misappropriation of cashier's checks. Field staff may take CCSD vehicles home without maintaining a log of their daily travel. A log is recommended to Building Department increase detection and reduce the risk of field staff utilizing these vehicles for personal use.

Non-itemized receipts are occasionally accepted for p-card purchases. This increases the risk of personal charges being Contracts and Services made on CCSD p-cards. It is recommended that only itemized receipts be accepted. If no itemized receipt is available, a form should be filled out by the purchaser indicating the items purchased and amounts. Average labor time for projects is not tracked or compared. It is recommended project times be tracked to identify and Custodial Operations, Landscaping, and Grounds reduce potential misuse of employee time. The same individual who coordinates donations for gift baskets also handles the items donated. A separate employee Employee Onboarding and Development should handle and record all donations received to reduce the risk of donations being appropriated without detection. A new process is in development to mitigate this risk. There is currently no quality control in place to verify if parts purchased for repairs are installed by technicians. This increases the risk of parts being purchased for personal use or resold. It is recommended that a non-technician Facilities and Bond Fund Financial Management separate of purchasing perform periodic checks to verify items ordered were installed and used for the intended purposes. The School District policies do not discuss what employee fraud is and its consequences. A fraud awareness section General School District Recommendations should be included within the School District's policies/employee handbook. This policy should be communicated to employees on a periodic basis. A confidential hotline is not available for employees to report suspicious activity. It is recommended a third-party General School District Recommendations anonymous reporting system be implemented for employees to report fraud and suspicious activity. A reporting system helps reduce an employee's fear of retaliation. The same person handling cash receipts for activities/fundraising may also be performing the bank reconciliations for General Observations - School Level the School bank accounts. To reduce the risk of cash theft and concealment within the bank reconciliations, it is recommended someone separate of cash handling and check disbursements perform the monthly bank reconciliations. Maintenance/Zone Maintenance/Maintenance Not all inventory items are tracked by the Maintenance department, which increases the risk of theft. It is Purchasing Team recommended that all inventory items are tracked with smaller items being weighed. Maintenance/Zone Maintenance/Maintenance Average labor time for projects is not tracked or compared. It is recommended project times be tracked to identify and Purchasing Team reduce potential misuse of employee time. Vehicles are not parked in a secure location overnight. CCSD vehicles should be stored in a secure location at night, Risk and Environmental Services such as in a fenced in parking lot. This reduces the risk of vandalism, damage, or theft.

ReferencePage 1 of 6.01(A) 1 Page 96 of 100 EIDE BAILLY INTERNAL CONTROLS EXAMINATION REPORT Workpaper 4

Sample Fraud Policy

BACKGROUND The corporate fraud policy is established to facilitate the development of controls that will aid in the detection and prevention of fraud against ABC Corporation. It is the intent of ABC Corporation to promote consistent organizational behavior by providing guidelines and assigning responsibility for the development of controls and conduct of investigations.

SCOPE OF POLICY This policy applies to any irregularity, or suspected irregularity, involving employees as well as shareholders, consultants, vendors, contractors, outside agencies doing business with employees of such agencies, and/or any other parties with a business relationship with ABC Corporation (also called the Company).

Any investigative activity required will be conducted without regard to the suspected wrongdoer’s length of service, position/title, or relationship to the Company.

POLICY Management is responsible for the detection and prevention of fraud, misappropriations, and other irregularities. Fraud is defined as the intentional, false representation or concealment of a material fact for the purpose of inducing another to act upon it to his or her injury. Each member of the management team will be familiar with the types of improprieties that might occur within his or her area of responsibility, and be alert for any indication of irregularity.

Any irregularity that is detected or suspected must be reported immedi- ately to the Director of ______, who coordinates all investigations with the Legal Department and other affected areas, both internal and external.

ACTIONS CONSTITUTING The terms defalcation, misappropriation, and other fiscal irregularities FRAUD refer to, but are not limited to:

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• Any dishonest or fraudulent act • Misappropriation of funds, securities, supplies, or other assets • Impropriety in the handling or reporting of money or financial transactions • Profiteering as a result of insider knowledge of company activities • Disclosing confidential and proprietary information to outside parties • Disclosing to other persons securities activities engaged in or contemplated by the company • Accepting or seeking anything of material value from contractors, vendors, or persons providing services/materials to the Company. Exception: Gifts less than $50 in value. • Destruction, removal, or inappropriate use of records, furniture, fixtures, and equipment; and/or • Any similar or related irregularity

OTHER IRREGULARITIES Irregularities concerning an employee’s moral, ethical, or behavioral conduct should by resolved by departmental management and the Employee Relations Unit of Human Resources rather than the ______Unit.

If there is any question as to whether an action constitutes fraud, contact the Director of ______for guidance.

INVESTIGATION The ______Unit has the primary responsibility for the RESPONSIBILITIES investigation of all suspected fraudulent acts as defined in the policy. If the investigation substantiates that fraudulent activities have occurred, the ______Unit will issue reports to appropriate designated personnel and, if appropriate, to the Board of Directors through the Audit Committee.

Decisions to prosecute or refer the examination results to the appropriate law enforcement and/or regulatory agencies for independent investigation will be made in conjunction with legal counsel and senior management, as will final decisions on disposition of the case.

CONFIDENTIALITY The ______Unit treats all information received confidentially. Any employee who suspects dishonest or fraudulent activity will notify the ______Unit immediately, and should not attempt to personally conduct investigations or interviews/interrogations related to any suspected fraudulent act (see REPORTING PROCEDURE section below).

Investigation results will not be disclosed or discussed with anyone other than those who have a legitimate need to know. This is important in order to avoid damaging the reputations of persons suspected but subsequently found innocent of wrongful conduct and to protect the Company from potential civil liability.

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AUTHORIZATION FOR Members of the Investigation Unit will have: INVESTIGATING • Free and unrestricted access to all Company records and premises, SUSPECTED FRAUD whether owned or rented; and • The authority to examine, copy, and/or remove all or any portion of the contents of files, desks, cabinets, and other storage facilities on the premises without prior knowledge or consent of any individual who might use or have custody of any such items or facilities when it is within the scope of their investigation.

REPORTING Great care must be taken in the investigation of suspected improprieties PROCEDURES or irregularities so as to avoid mistaken accusations or alerting suspected individuals that an investigation is under way.

An employee who discovers or suspects fraudulent activity will contact the ______Unit immediately. The employee or other complainant may remain anonymous. All inquiries concerning the activity under investigation from the suspected individual, his or her attorney or representative, or any other inquirer should be directed to the Investigations Unit or the Legal Department. No information concerning the status of an investigation will be given out. The proper response to any inquiries is: “I am not at liberty to discuss this matter.” Under no circumstances should any reference be made to “the allegation,” “the crime,” “the fraud,” “the forgery,” “the misappropriation,” or any other specific reference.

The reporting individual should be informed of the following: • Do not contact the suspected individual in an effort to determine facts or demand restitution. • Do not discuss the case, facts, suspicions, or allegations with any- one unless specifically asked to do so by the Legal Department or ______Unit.

TERMINATION If an investigation results in a recommendation to terminate an individ- ual, the recommendation will be reviewed for approval by the designated representatives from Human Resources and the Legal Department and, if necessary, by outside counsel, before any such action is taken. The ______Unit does not have the authority to terminate an employee. The decision to terminate an employee is made by the employee's management. Should the ______Unit believe the management decision inappropriate for the facts presented, the facts will be presented to executive level management for a decision.

ADMINISTRATION The Director of ______is responsible for the administration, revision, interpretation, and application of this policy. The policy will be reviewed annually and revised as needed.

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APPROVAL ______(CEO/Senior Vice President/Executive Date

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