The Clarkstown Central School District (District) is governed by the Board of Education (Board) which comprises seven elected members. The Board is responsible for the general management and control of the District’s financial and educational affairs. The Superintendent of Schools (Superintendent) is the chief executive officer of the District and is responsible, along with other administrative staff, for the day-to-day management of the District under the direction of the Board.

The Board is responsible for establishing, implementing and monitoring appropriate internal controls. Internal controls include policies and procedures that help ensure financial reporting and budgeting are accurate; laws and regulations concerning competitive bidding are complied with, and the District operates efficiently and effectively. Establishing and implementing such controls can help the District prevent financial distress, obtain the best prices for goods and services and prevent misuse of District assets.

Scope and Objectives

The objectives of our audit were to evaluate the District’s budgeting practices and internal controls over purchasing for the period July 1, 2005 to September 30, 2006. Our audit addressed the following question:

• Were internal controls over the District’s budgeting and purchasing processes appropriately designed and operating effectively to adequately safeguard District assets?

Audit Results

The Board did not adequately monitor or enforce District budgeting policies and procedures. As a result of the poorly developed 2005-06 budget, the District had over $4.7 million of year-end budget transfers. The transfers included $618,337 for legal services, $501,160 for interest on outstanding debt, $88,707 for interscholastic bus services and $39,625 for office expenses. Although the District is currently in sound financial condition, inadequate Board oversight and poor management practices could lead the District into financial difficulties in the future.

District officials did not comply with the Board’s purchasing policies. Officials expended approximately $18 million without using purchase orders as required for purchases such as, $250,000 for legal services and $24,000 for advertising services. Officials paid over $161,000 to vendors without utilizing competitive bidding. These purchases included $54,000 for hardware, $27,000 for automotive parts and $18,000 for windows. In addition, they also paid approximately $844,000 for professional services to eight vendors without soliciting requests for proposals. These vendor payments included $309,601 for engineering services, $312,669 for legal services and $60,493 for architectural services. Finally, District officials paid five vendors over $205,000 without the benefit of written contracts. These payments included $95,000 to a consulting firm, $60,000 to an architect and $16,402 to an internal claims auditor.

Comments of District Officials

The results of our audit and recommendations have been discussed with District officials and their comments, which appear in Appendix A, have been considered in preparing this report.

Complete Audit in PDF