QUILCENE – The State Auditor’s Office says the Quilcene School District and Big Quil Enterprises, the 4-H shellfish business students participate in, must keep better financial records and enter into a contract.

An audit of the school district spanning 2003 to 2006, released just last week, said the district has inadequate internal controls to ensure that associated student body funds are appropriated correctly.

“They need to have a contract that shows who gets what and who benefits in what way,” said Mindy Chambers, State Auditor’s Office spokeswoman.

Big Quil Enterprises is a Washington State University Jefferson County Extension ­4-H business involving about 150 school district students, said Pamela Roberts, ­4-H and youth development coordinator with the extension.

It is designed to teach students all aspects of running a business.