KIPP Academy Charter School

Financial Management Practices

KIPP Academy Charter School is located in the Bronx and has about 248 students enrolled in kindergarten through grade 5. The School, which was established in September 2000, is chartered by the New York City Department of Education. We audited the adequacy of the internal controls established by School officials over selected areas of financial operations, and identified a number of weaknesses in these controls. For example, contrary to the law authorizing the creation of charter schools, some of the individuals hired by the School did not undergo a criminal history record check.

We also found the School paid $67,951 to send 49 staff on a five-day trip to the Bahamas and 21 staff on a five-day trip to the Dominican Republic. School officials told us the trips were educationally related because staff development retreats were held at the two locations, but we were provided with very little documentation of staff development activities at these locations. School officials also told us donated funds were used to pay for the trips and such funds were theirs to spend without restrictions. However, we could not determine whether the trips were, in fact, paid for with donated funds, because such funds were not accounted for separately from the School’s other funds (mainly State aid). We also note that, by law, funds donated to charter schools are to be spent in accordance with the conditions prescribed by the donors. We recommended School officials establish certain controls over donated funds and fully document the educational nature of all staff development retreats.

We also identified significant weaknesses in the controls over payroll operations. For example, special bonuses, special stipends, pay increases, overtime payments and other types of payroll transactions were not adequately documented. As a result, there was less assurance such transactions were always authorized and appropriate. We concluded that the School’s Board of Trustees needed to oversee its fiscal operations more closely.

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