A new report from Auditor General Carol Bellringer has concluded that the Surrey School District is doing a “reasonable job” in managing executives’ expenses but found that some were “inconsistent” with policy, including a meal where $80 steaks were ordered.
In a report released by Bellringer Aug. 22, she concluded that district expenses for executive staff “generally complied with applicable school district policies” and that financial disclosures were “complete and accurate.”
But, Bellinger’s report states the audit found “some executive expenses that weren’t adequately supported.”
“For example, we found that the expenses for meals provided during meetings didn’t always include an explanation of why the meeting was held during a mealtime, the purpose of the meeting or the meeting attendees. While SD36 policies did not specifically require explanations, this is a requirement under the CPPM (Core Policy and Procedures Manual) and would help to ensure that district-paid meals are appropriate and supported. Further, this detail would enable analysis of meal expenses over time,” Bellinger wrote.
Bellinger’s key findings highlighted “an overstatement of nearly $40,000 in the disclosure amount for the 2016/17 fiscal year.”
“This did not show up as a discrepancy between the financial records and the SOFI, as the error was also in the financial records,” she found. “The amount was related to the buyout of a leased car that was paid for by the district and then subsequently fully reimbursed by the employee through one payroll deduction. The amount was included, in error, in the expenses paid out for that employee.”
The report also identified a number of expenses deemed to be “inconsistent” with the school district own’s policies, including a meal during a meeting that consisted of two steaks at a cost of $80 each, for a total bill of $193.20. The comparable CPPM rate for one dinner is $30.50.
The review also found one instance where an individual submitted a claim for an evening meal, and also claimed a per diem.
“We also found that SD36 is taking on the financial risk for some employee expenses,” Bellinger’s report notes. “School districts can make their own policies regarding expenses, but they’re also required to follow the spirit and intent of the CPPM which states that employees should pay for their travel expenses first on a personal credit card or employer-issued travel card and then get reimbursed by the organization; this is also typical practice. Instead of using a travel card or personal credit card, district employees are given a corporate purchasing card to use for their work-related expenses.”
Bellinger wrote that Surrey school district employees “regularly charged travel expenses on their purchasing cards.”
“The district is responsible for directly paying all of the charges incurred on the purchasing cards, including travel. We saw this same practice last year during our audit of SD61,” she noted.
The report identified travel expenses as another area “inconsistent” with district policy, which states travel is to be arranged by the most economical and practical mode.
“We found an instance where a limousine was booked for one-way travel in Quebec for one passenger at a cost of $300,” the report notes. “A return trip for one passenger was also expensed at $150. Neither the origin nor destination within the city was specified in the documents supporting the claim.”
Bellinger’s report recommended the district align its policies “more closely to government’s Core Policy and Procedures Manual” and to “ensure the enforcement of its existing policy requirements for its employees.”
The district has been advised to focus on the CPPM areas including employer-paid food for meetings; maximum per diem rates and eligible time frames; and the use of purchasing cards for travel and individual business expenses.
It’s also suggested the district “enforce its policy requirements for employees when making expense claims,” specifically the details and business purpose for the activities underlying expense claims, and the business rationale for holding a meeting during a mealtime.
Last year, the government looked at employer-paid expenses for executives at Victoria’s school district and that was “a first step in examining executive expenses in a sample of districts across the province.”
In a release, Bellringer encouraged other districts to read the report to “ensure they’re appropriately managing, and fully disclosing, their employees’ expenses.”
“We also encourage the Ministry of Education to consider whether there are financial implications when school districts’ financial practices are not consistent with government’s core policy,” she said.
Bellringer’s report states the district will be “reviewing its policies and procedures and their alignment with Treasury Board’s Core Policy and Procedure Manual.”
District spokesman Doug Strachan said the district will “act promptly” to refine its policies identified in the audit as needing to be “tightened” to align more closely with the CPPM.
“The district will be rigorous in enforcement of those policies,” Strachan added. “The district appreciates the careful, thorough and fair approach taken by the Auditor Genearl Carol Bellringer in her audit of executive expenses.”
In the most recent Statement of Financial Information available, for 2017-18, Surrey School District Superintendent Jordan Tinney expensed the most of any employee ($59,441) and the second highest was Angela Kellie Olsen, who expensed $53,628.
Read the full review on the Office of the Auditor General website at bcauditor.com