707.5 Internal Controls

Code No. 707.5

INTERNAL CONTROLS

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

Internal control is the responsibility of all employees of the school district. The superintendent, business manager and building administrators shall be responsible for developing internal controls designed to prevent and detect fraud, financial impropriety, or fiscal irregularities within the school district subject to review and approval by the board. Administrators shall be alert for any indication of fraud, financial impropriety, or irregularity within the administrator's area of responsibility.

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

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

In the event the concern or complaint involves the superintendent, the concern shall be brought to the attention of the board vice-president, or finance committee member. The board shall be empowered to contact the board's legal counsel, insurance agent, auditing firm, and any other agency to investigate the concern or complaint.

Upon approval of the board, the superintendent may contact the State Auditor or elect to employ the school district's auditing firm or State Auditor to conduct a complete or partial forensic/internal control/SAS99 audit annually or otherwise as often as deemed necessary. The superintendent is authorized to order a complete forensic audit if, in the superintendent's judgment, such an audit would be useful and beneficial to the school district. The superintendent shall ensure the State Auditor is notified of any suspected embezzlement or theft pursuant to Iowa law.

In the event, there is an investigation, records will be maintained for use in the investigation. Individuals found to have altered or destroyed records will be subject to disciplinary action, up to, and including termination.

Legal References: American Competitiveness and Corporate Accountability Act of

2002, Pub. L.No. 107-204.

Iowa Code ch. 11, 279.8 (2013).

Approved: , Reviewed: 1/10/18, Revised: 9/13/23

Grinnell-Newburg School District, Grinnell, IA

707.5R1 Internal Controls Procedures

Code No. 707.5R1

INTERNAL CONTROLS PROCEDURES

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

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

The superintendent, or board vice president if the investigation centers on the superintendent, shall investigate reports of fraudulent activity in a manner that protects the confidentiality of the parties and the facts. All employees involved in the investigation shall be advised to keep information about the investigation confidential.

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

legitimate right to know until the results are made public.

Approved: , Reviewed: 1/10/18, Revised: 9/13/23

Grinnell-Newburg School District, Grinnell, IA

707.5R2 Segregation of Duties Procedures

Coe 707.5R2

Segregation of Duties Procedures

General internal control principles for the Central Office are:

1. Separation of duties

a. Duties are separated so that one person's work routinely serves as a check on another's work.

b. No one person has complete control over more than one key function or activity (e.g., authorizing, approving, certifying, disbursing, receiving, or reconciling).

2. Employees must understand their own roles in the internal control system, as well as how individual activities relate to the work of others. To this end, whenever a new budgetary unit, financial activity, research project, etc. is set up, the Controller will provide notification to the appropriate parties of the responsibilities incumbent on them for good business practices and sound financial management, including reference to the principles within this policy.

3. Authorization and approval

a. Proposed transactions are authorized when proper and consistent with District policy and the department's budget and plan.

b. Transactions are approved by the person who has delegated approval authority, which is usually delegated based on special competency or knowledge and supervisory position.

4. Custodial and security arrangements

a. Responsibility for physical security/custody of District assets is separated from record keeping/accounting for those assets.

b. Unauthorized access to District assets and data is prevented.

5. Timely and accurate review and reconciliation

a. Departmental accounting records and documents are examined by employees who have sufficient understanding of school accounting and the Districts financial accounting software to verify that recorded transactions took place and were made in accordance with District policies and procedures.

b. Departmental accounting records and documentation are compared with the District’s accounting system reports and financial statements to verify their reasonableness, accuracy, and completeness.

6. The general internal control principles should be applied to all departmental operations, especially accounting records and reports, payroll, purchasing/receiving/disbursing approval, equipment and supply inventories, cash receipts, petty cash and change funds, billing and accounts receivable. All District systems, processes, operations, functions, and activities are subject to evaluations of internal control systems. The results of these evaluations provide information regarding the District’s overall system of control.

7. Information and communication – information must be timely and communicated in a manner that enables people to carry out their responsibilities.

Approved: 10/14/2020, Reviewed: 9/13/2023, Revised:

707.5R3 Fraud Reporting Procedures

2 CFR Part 200 Subpart B-General Provisions
200.113 Mandatory Disclosures

In compliance with Uniform Grant Guidance, in Title 2 Code of Federal Regulation (C.F.R.) Grants and Agreements, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, this policy is adopted.

A non-Federal entity or applicant for a Federal award must disclose, in a timely manner, in writing to the Federal awarding agency or pass-through entity all violations of Federal criminal law involving fraud, bribery, or gratuity violations potentially affecting the Federal award. Non-Federal entities that have received a Federal award including the term and condition outlined in Appendix XII—Award Term and Condition for Recipient Integrity and
Performance Matters are required to report certain civil, criminal, or administrative proceedings to SAM. Failure to make required disclosures can result in any of the remedies described in §200.338 Remedies for noncompliance, including suspension or debarment. (See also 2 CFR
part 180, 31 U.S.C. 3321, and 41 U.S.C. 2313.)

If an employee, elected official, board or commission member, volunteer, agent, etc. learns of a violation of Federal criminal law involving fraud, bribery, or gratuity potentially affecting a Federal grant, they will report the violation to:

Designee: Superintendent or Finance Committee Member

The above named is/are responsible for reporting the violation to the relevant federal agency, or pass-through agency in writing, and in a timely manner.

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Print and Sign Date

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Attest Print and Sign Date
Approved: 10/14/2020, Reviewed: 9/23/2023, Revised: