Background

The Schodack Central School District (District) is located in the Town of Schodack and the Village of Castleton-on-Hudson in Rensselaer County and the Town of Stuyvesant in Columbia County. The District is governed by the Board of Education (Board), which comprises nine 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.

There are three schools in operation within the District, with approximately 1,200 students and 230 employees. The District’s budgeted expenditures for the 2006-07 fiscal year were $18.9 million, funded primarily with State aid, real property taxes, and grants.

The New York Legislature enacted the Laws of New York, 2005 Chapter 263 (Five Point Plan), which amended Education Law, in order to increase fiscal accountability within school districts. The Five Point Plan provides for the following: strengthening the internal claims audit function, requiring school board members to obtain financial oversight training, establishing more rigorous external audit standards, establishing new internal audit requirements, and establishing audit committees.

Objective

The objective of our audit was to determine whether the District was in compliance with the requirements of the Five Point Plan. Our audit addressed the following related question:

• Has the District exercised its oversight responsibilities over compliance with all components of the Five Point plan?

Scope and Methodology

Our overall goal was to assess the adequacy of the internal controls put in place by officials to safeguard District assets. To accomplish this, we performed an initial assessment of the internal controls so that we could design our audit to focus on those areas most at risk. Our initial assessment included evaluations of the following areas: financial oversight, cash receipts and disbursements, purchasing, payroll and personal services, and information technology. Based on that evaluation, we determined that controls appeared to be adequate and limited risk existed in most of the financial areas we reviewed. We did determine that risk existed in compliance with the Five Point Plan; therefore, we examined compliance with the legislation for the period July 1, 2006 to April 16, 2007.

We conducted our audit in accordance with generally accepted government auditing standards (GAGAS). More information on such standards and the methodology used in performing this audit are included in Appendix B of this report.

Comments of District Officials and Corrective Action

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. District officials generally agreed with our recommendations and indicated they planned to initiate corrective action.

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.