The Hampton Bays Union Free School District (District) is governed by the Board of Education (Board) which comprises five 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 District’s audited financial statements for the period ending June 30, 2006 report that expenditures totaled $31.4 million. Responsibilities relating to the District’s finances, and accounting records and reports are largely those of the District’s Business Administrator, who also acts as the purchasing agent and finance software administrator.

Scope and Objective

The objective of our audit was to examine the District’s internal controls over selected financial operations for the period July 1, 2005 through June 30, 2006. Our audit addressed the following questions:

• Did District officials adhere to adopted policies regarding purchasing and credit card use?


• Did the Board establish policies and procedures that address the safety of computer data?

Audit Results

We found that District officials did not always adhere to Board-adopted policies regarding purchasing and credit card use. The District did not solicit requests for proposals when obtaining professional services and paid four professional service providers $107,168 during the 2005-06 fiscal year without the benefit of competition. A fifth professional, who received $11,605, did not have a contract with the District. In addition, the District paid a computer parts vendor $47,630 during the 2005-06 fiscal year without soliciting competitive bids. We also found that District officials incurred credit card charges totaling $1,704, but did not submit the documentation necessary to indicate that they were for legitimate District business.

We also found that the Board did not establish policies and procedures to safeguard computer data. As a result, the District’s Business Administrator, who is also the purchasing agent and finance system administrator, has the ability to perform management overrides. In addition, four other employees had system administrator rights allowing them full access to the finance system and data not related to their job duties. The District also did not implement procedures to monitor remote access, periodically review audit trail reports or address disaster recovery. As a result, the District could be vulnerable to unauthorized access to sensitive information, manipulation of District records and the loss or destruction of data.

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. Except as specified in Appendix A, District officials generally agreed with our recommendations and indicated they planned to initiate corrective action. Appendix B includes our comments on issues raised in the District’s response letter.

The Board has the responsibility to initiate corrective action. Pursuant to Section 35 of the General Municipal Law, Section 2116-a (3) (c) of the Education Law and Section 170.12 of the Regulations of the Commissioner of Education, the Board must approve a corrective action plan that addresses the findings in this report, forward the plan to our office within 90 days, forward a copy of the plan to the Commissioner of Education and make the plan available for public review in the District Clerk’s office. For guidance in preparing the plan of action, the Board should refer to applicable sections in the publication issued by the Office of the State Comptroller entitled Local Government Management Guide.

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Complete Audit in PDF