Report 2014-135R Recommendation 5 Responses

Report 2014-135R: Magnolia Science Academies: Although the Financial Condition of These Charter Schools Has Improved, Their Financial Controls Still Need to Be Strengthened (Release Date: May 2015)

Recommendation #5 To: Magnolia Educational and Research Foundation

To strengthen its controls over purchases that principals make at the academies, the Foundation should update its accounting manual to require academy principals to obtain written authorization before processing purchases on their debit cards that are higher than established thresholds. The Foundation should also revise its accounting manual to prohibit the use of debit cards for travel except in the case of a documented emergency.

Agency Response*

As of June 30, 2015, the organization has discontinued the use of debit cards and has assigned credit cards to all school principals and key employees. The new credit cards are the responsibility of the cardholders, and the expenditures are reimbursed in accordance with the policies and procedures manual.

The new policiy "CSH111 COMPANY-ISSUED CREDIT CARDS" has been board approved and is currently in effect for the organization.

  • Response Type†: 6-Month
  • Completion Date: June 2015
  • Response Date: November 2015

California State Auditor's Assessment of Status: Fully Implemented


Agency Response*

As of June 30, 2015, the organization has discontinued the use of debit cards and has assigned credit cards to all school principals and key employees. The new credit cards are the responsibility of the cardholders, and the expenditures are reimbursed in accordance with the policies and procedures manual.

The new policiy "CSH111 COMPANY-ISSUED CREDIT CARDS" has been board approved and is currently in effect for the organization.

  • Response Type†: 60-Day
  • Completion Date: June 2015
  • Response Date: July 2015

California State Auditor's Assessment of Status: Pending

Although it claims that it has fully implemented this recommendation through a new credit card policy, the Foundation--despite our requests--has not provided us with the new policy to substantiate its claim.

  • Auditee did not substantiate its claim of full implementation

All Recommendations in 2014-135R

†Response Type refers to the interval in which the auditee is providing the State Auditor with their status in implementing recommendations made in an audit report. Auditees must submit a response regarding their progress in implementing recommendations from our reports at three intervals from the release of the report: 60 days, six months, and one year or subsequent to one year.

*Agency responses received after June 2013 are posted verbatim.


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