For a printed copy, contact
Auditor General Casey's
Office of Taxpayer Advocate
at 1-800-922-8477.
FOR THE YEARS ENDED JUNE 30, 1996 AND 1995
WITH ADVISORY COMMENT
Status of Prior Years' Finding and Recommendations
The Honorable Thomas J. Ridge
Governor
Commonwealth of Pennsylvania
Harrisburg, Pennsylvania 17120
We have audited the operations of the Leechburg Area School District for the years ended June 30, 1996 and 1995. Our objectives were:
Our audit, required by 72 P.S. § 403, was limited to the areas of Leechburg Area School District's operations relating to the objectives identified above.
Solely to assist us in planning and performing our audit, we made a study and evaluation of the internal control structure of the Leechburg Area School District. Our audit was made for the limited purposes described above. Accordingly, we do not express an opinion on the internal control structure taken as a whole.
The results of our tests indicate that with respect to the items tested, the Leechburg Area School District complied with state laws and regulations and received the state funds to which it was entitled.
In addition, an advisory comment on the potential computer processing problems posed by the Year 2000 is included on page 7 of this report.
This report is intended for the information of management, the Leechburg Area School District Board of Directors, and Commonwealth agencies. However, this report is a matter of public record and its distribution is not limited.
| September 16, 1998 | Robert P. Casey, Jr. Auditor General |
Authority
Our audit was conducted under authority of 72 P.S. § 403, and does not supplant the local annual audit as required by 24 P.S. §§ 1-101, et seq.
Background
The district, located in Armstrong County encompasses an area of 17.8 square miles. It has a population of 6,667, according to the 1990 federal census. The administrative offices are at 200 Siberian Avenue, Leechburg.
During 1995-96, the district provided basic educational services to 957 pupils through the employment of 7 administrators, 73 teachers, and 38 full-time and part-time support personnel. Special education was provided by the district and the Arin Intermediate Unit #28. Occupational training and adult education in various vocational and technical fields were provided by the district and the Lenape Area Vocational-Technical School.
Expenditures for the years ended June 30, 1996 and 1995 were $7,670,377 and $6,801,462, respectively. Revenues supporting these expenditures were derived from local, state, and federal sources. Local revenues for 1995-96 were primarily based on a 166.80 mill real estate levy for Armstrong County and a 71.97 mill real estate levy for Westmoreland County, a $10 occupational tax, a $10 per capita tax, a 1/2 percent wage and income tax, a 1/2 percent real estate transfer tax, and a $5 occupational privilege tax.
The district reported state revenue of $3,667,189 and $3,473,051, respectively, for the years ended June 30, 1996 and 1995, as detailed in the following schedule:
| STATE REVENUE | 1996 | 1995 |
| Basic Instructional Subsidy | $2,470,265 | $2,330,076 |
| Tuition for Orphans and Children Placed in Private Homes | 13,976 | - |
| Homebound Instruction | 651 | 111 |
| Vocational Education | - | 8,532 |
| Driver Education | 910 | 700 |
| Special Education | 284,343 | 280,222 |
| Transportation | 206,098 | 187,317 |
| Rentals and Sinking Fund | 290,028 | 479,830 |
| Health Services | 17,411 | 17,454 |
| Social Security | 154,146 | 145,256 |
| Retirement | 229,361 | 17,478 |
| Environmental Education Grant | - | 6,075 |
| TOTAL STATE REVENUE | $3,667,189 | $3,473,051 |
Basic Instructional Subsidy
Revenue received from Commonwealth appropriations as subsidy for basic instruction.
Tuition for Orphans and Children Placed in Private Homes
Revenue received from the Commonwealth as tuition for children who are orphans and/or children who are placed in private homes by the court. Payments are made in accordance with Sections 1305 and 1306 of the Public School Code.
Homebound Instruction
Revenue received from the Commonwealth as subsidy for expenses incurred on account of instruction of homebound pupils. Payments are made in accordance with Section 2510.1 of the Public School Code.
Vocational Education
Revenue received from the Commonwealth as subsidy on account of vocational education expenditures which are classified as current operating expenditures and also for preliminary expenses. Payments are made in accordance with Sections 2502.8 and 2507 of the Public School Code.
Driver Education
Revenue received from the Commonwealth as subsidy on account of conducting a standardized driver education program. Payments are made in accordance with Section 2504.1 of the Public School Code.
Special Education
Revenue received from the Commonwealth for subsidy on account of expenditures incurred for instructing school-age special education students.
Transportation
Revenue received from the Commonwealth as subsidy on account of pupil transportation expenditures and/or board and lodging in lieu of transportation. Payments for pupil transportation are made in accordance with Section 2541 of the Public School Code. Payments for board and lodging in lieu of transportation are made in accordance with Section 2542 of the Public School Code.
Rentals and Sinking Fund
Revenue received from the Commonwealth as a full or partial subsidy payment on account of approved lease rentals, sinking fund obligations, or any approved district debt obligation for which the Department of Education has assigned a lease number.
Health Services
Revenue received from the Commonwealth as subsidy on account of health services. Payments are made in accordance with Section 2505.1 of the Public School Code and include revenue for medical, dental, nurse and Act 25 health services.
Social Security
Revenue received from the Commonwealth as subsidy designated as the Commonwealth's matching share of the employer's contribution of the Social Security and Medicare taxes for covered employees who are not federally funded.
Retirement
Revenue received from the Commonwealth as subsidy designated as the Commonwealth's matching share of the employer's contribution of retirement contributions for active members of the Public School Employes' Retirement System.
Other Program Subsidies/Grants
Revenue received from the Commonwealth not specified elsewhere.
The advisory comment was reviewed with representatives of the Leechburg Area School District.
Advisory Comment - Year 2000
The Year 2000 issue results from a computer's (both mainframe and personal computers) inability to process year-date data accurately beyond the year 1999. Except in recently introduced Year 2000 compliant programs, computer programmers consistently have abbreviated dates by eliminating the first two digits of the year, with the assumption that these two digits would always be 19. Thus, January 1, 1965, became 01/01/65. Unless corrected, this shortcut is expected to create widespread problems when the clock strikes 12:00:01 a.m. on January 1, 2000. On that date, some computer programs may recognize the date as January 1, 1900, and process data inaccurately or stop processing altogether.
The Year 2000 issue is likely to effect computer applications before January 1, 2000, when systems currently attempt to perform calculations into the Year 2000. The Year 2000 problem can also exist in equipment that has embedded computer chips, e.g. phone systems, fax systems, elevators, HVAC systems, security systems, fire detection systems, construction equipment, etc.
We recommend that Leechburg Area School District take the necessary actions to immediately begin to identify, modify, and test all systems and equipment that may be negatively affected by the Year 2000 issue, particularly mission-critical systems. This program should be monitored closely to ensure completion before mission-critical systems begin to fail. Such failures may be evident before January 1, 2000. If Leechburg Area School District fails to take timely and appropriate action, it may experience costly and significant application-program and/or equipment failures that could prevent it from performing its normal processing and operating activities. Depending on the extent of system and/or equipment failures, non-compliance could have catastrophic consequences for Leechburg Area School District.
Also, Leechburg Area School District should implement additional verification procedures to test the accuracy of information received from its vendors, service providers, bankers, customers, and other third party organizations with whom it exchanges date-dependent information, because these organizations also must become Year 2000 compliant. Leechburg Area School District also should satisfy itself that vendor, service providers, bankers, customers, and other third-party organizations will not experience problems relating to the Year 2000 issue that could affect Leechburg Area School District operations or cash flows.
The following is a summary of the finding and recommendations presented in the June 30, 1994 and 1993 audit report, along with a description of the school board's disposition of each recommendation. The status of each recommendation was determined by one or more of the following procedures:
Review of pupil transportation reports submitted to the Department of Education (DE) for the years ending June 30, 1994 and 1993 disclosed errors in reporting daily bus mileage and the number of nonreimbursable pupils transported.
It was recommended that district personnel responsible for pupil transportation:
In its written response, the board stated they agree with the audit explanation with regard to the clerical errors on transportation reports. Moreover, the board noted that district personnel responsible for pupil transportation will follow the recommendations given in the audit report.
The current audit disclosed no errors in pupil transportation reports submitted to DE.
On June 25, 1998, DE adjusted the district's allocation to resolve the $2,797 net underpayment.
This report was initially distributed to the superintendent of the school district, the board members, and the following:
The Honorable Eugene Hickok
Secretary of Education
1010 Harristown Building #2
333 Market Street
Harrisburg, PA 17126
Mr. William A. Hardenstine, Jr.
Comptroller
Labor, Education & Community Services Comptroller's Office
1012 Labor & Industry Building
Harrisburg, PA 17120
The Honorable Barbara Hafer
State Treasurer
Room 129 - Finance Building
Harrisburg, PA 17120
Mr. David Helfman, Research Manager
Pennsylvania State Education Association
400 North Third Street - Box 1724
Harrisburg, PA 17105
Ms. Ann Boyko, Resource Assistant
Pennsylvania School Boards Association
774 Limekiln Road
New Cumberland, PA 17070
Auditor General Web Site Address:
www.auditorgen.state.pa.us
Copies of this report may be obtained from the Pennsylvania Department of the Auditor General, Office of Communications, 318 Finance Building, Harrisburg, Pennsylvania 17120.
Please direct all comments, suggestions, or problem reports about this web site to webmaster@auditorgen.state.pa.us.