Internal Controls Over Claims Processing and Payroll
The Board does not have adequate controls in place over the District's claims processing and payroll functions. The Board has not provided policies, procedures or a job description for the claims auditor; nor does it properly oversee the payroll process. Consequently, the claims auditor does not report his findings to the Board or properly audit claims, overpayments have been made to vendors, and employees have been paid additional compensation without Board authorization. For example, two administrators and one teacher were paid additional compensation totaling $6,391 without Board authorization either through written employment contracts or through Board resolutions. Abbott Union Free School District[complete audit - pdf]

Financial Condition and Internal Controls Over Selected Financial Activities
The District has experienced a series of unplanned operating deficits in its school lunch fund over the last several years. These deficits were caused by inaccurate budget estimates and lack of enforcement of the submission of applications for reduced price lunches. These operating deficits in the school lunch fund, and also the delay in reimbursement in the special aid fund, have, in turn, caused the District to experience cash flow problems. The District has addressed its need for cash in the short-term by using interfund advances and subsidies and issuing short-term debt financing. As of June 30, 2008, the special aid fund owed nearly $3.3 million and the school lunch fund owed nearly $950,000 to the general fund. Because of the recurring operating losses, the potential for the school lunch fund to return solvency and to operate without these advances from the general fund appears unlikely in the foreseeable future. In addition, District officials have also failed to address energy efficiency goals or power management features in regard to computer technology. There are significant internal control weaknesses in certain areas of payroll processing. District officials also need to improve controls over the procurement of professional services, security of District assets, information technology, and obtaining the required approvals for hiring retirees. Finally, there was an inadequate segregation of duties over cash disbursements. Albany City School District[complete audit - pdf]

Financial Condition and Internal Controls Over Purchasing
The District has not ensured that budget estimates are reasonable and has not established and maintained reserves in accordance with statutory requirements. We found that the District has routinely overestimated appropriations and underestimated revenues. Poor budget estimates resulted in revenues exceeding expenditures by more than $5 million, in total, over the last five fiscal years, on an average total budget of about $27 million. The District's budgetary practices have consistently resulted in operating surpluses that District officials have used to increase four general fund reserve funds, including two that either lack adequate documentation of their need or were established and funded without proper legal authority. District officials also failed to comply with GML requirements and/or the District's own purchasing policies when procuring goods and services. We tested 40 purchases totaling $321,990 and found that District officials did not use competitive bidding for three purchases totaling $38,038 and did not obtain quotations for seven purchases totaling $40,115. Albion Central School District[complete audit - pdf]

Internal Controls Over Cash Receipts and Disbursements
District officials have not established appropriate policies or procedures to adequately safeguard financial resources in the Business Office. They have neither segregated financial duties related to cash receipts and disbursements, nor have they implemented access controls to ensure proper segregation of duties within the computerized accounting system. Furthermore, the Treasurer did not adequately control the application of his facsimile signature to checks. While our review of transactions did not identify any exceptions, District officials must correct these control weaknesses to reduce the risk of unauthorized payments or the loss or theft of cash receipts. Alexandria Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
We found internal controls were not appropriately designed or operating effectively. The Board did not appoint a claims auditor in accordance with SED regulations. The Board contracted with the Greater Southern Tier (GST) BOCES Central Business Office (CBO) for claims auditor service for the 2007-08 and the 2008-09 fiscal years. During this time the District paid over $1.1 million to the GST BOCES for other services provided. As a result of these payments and the appointment of a GST employee as claims auditor, the District has not complied with the independence requirements for this position. We also found that the claims auditor did not always ensure that claims submitted for approval for payments against the Model Transition Program grant were in accordance with District adopted policies and procedures. Lastly, we found that the District has not adopted a formal disaster recovery plan, established policies and procedures for determining user access permissions, effectively secured the server room or established policies and procedures for remote access or data back-ups. Alfred-Almond Central School District[complete audit - pdf]

Financial Management and Internal Conrols Over Payroll
Even after two years of negative operating results, District officials did not take necessary steps for 2007-08 to ensure that the internal financial reporting procedures were effective for monitoring actual performance against that year's budget. We found that accounting records were not up-to-date and reliable, and essential financial reports for 2007-08 were not always presented to the Board in a timely manner. The District has established an employee benefit accrued liability reserve that was funded at a constant level of $1.1 million during the audit period. District officials could not demonstrate that all funds held in this reserve were necessary. Although the District has experienced financial difficulties in recent years and continues to face a steady decline in enrollment, District officials do not have a formal long-term planning process to address future operational challenges. Finally, District officials have not adequately segregated duties over the payroll process, nor have they provided independent oversight of the payroll process. Altmar-Parish-Williamstown Central School District[complete audit - pdf]

Cost Savings and Extra-Classroom Activity Fund
The District currently uses the services of the Mid-Hudson Regional Information Center (MHRIC) to print its computer-processed checks. We performed a cost analysis and estimated that, for the three-year period 2006-07 through 2008-09, District officials could have saved up to $405,000 by printing District checks in-house. In addition, District officials have not administered extra-classroom activity fund moneys in accordance with the Regulations. While the Board adopted an extra-classroom activity fund policy, it is not enforced, has not been updated since July 1995, and does not include many of the requirements as outlined in the Regulations. Although the Board appointed extra-classroom activity fund central treasurers for each school, as required by Regulations, and has faculty advisors for some of the activities, most extra-classroom activities did not have student officers. Furthermore, District management has not designated a faculty auditor to monitor the general operations of the extra-classroom activity fund or the performance of duties outlined by the Regulations. Arlington Central School District[complete audit - pdf]

Internal Controls Over Reserve Funds
At June 30, 2008, the District reported five reserves with an aggregate balance of $6.5 million. Four reserves were reported in the general fund while the remaining reserve was reported in the debt service fund. We determined that three reserves, totaling over $3.1 million, were properly established, adhered to statutory requirements, and appeared to be at reasonable levels. However, the balances in two other reserves appeared to be excessive. For example, District debt service expenditures in the general fund have totaled more than $3 million annually during the six fiscal years ended 2007-08. However, the District did not use the debt reserve to help pay for any debt service costs. Also, the reported balance in the District's unemployment reserve was $405,000 at June 30, 2008. For the last three fiscal years, District unemployment insurance costs have averaged $20,000 per year. Based on this three-year average, the District's reserve balance at June 30, 2008 is equivalent to approximately 20 years worth of unemployment claims. Attica Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The Board and District officials have not established written policies and procedures for the Personnel Department, including documented procedures for maintaining leave records and confidential employee information. The lack of internal controls over payroll and personal services at the end of fiscal year 2008-09, has resulted in a total cost to the District and taxpayers of over $59,000. Finally, the Board and District officials used the EBALR to pay for retiree health insurance, which is an improper use of the reserve. They did not use available EBALR funds to pay for compensated absences and they overfunded the EBALR to an amount that exceeds the liability for compensated absences. As a result, we found that over $2 million of excess taxpayer dollars were kept in the reserve. Auburn Enlarged City School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District contracted with five professional service providers, who were paid a total of $432,904 during our audit period, without first soliciting professional services through a request for proposal. District officials also did not ensure that the Treasurer's cash duties were properly segregated, and the District was not in compliance with the State regulations because District officials did not issue duplicate pre-numbered receipts when collecting cash. The Board did not ensure that policies and procedures were developed to make certain that all District officers and employees were informed of their obligation to disclose their "interest" in contracts with the District, or to monitor proposed procurements to prevent conflicts of interest. Finally, the Board has not established policies to monitor and control access to computer data. Babylon Union Free School District[complete audit - pdf]

Financial Condition and Internal Controls Over Selected Financial Operations
We found that the Board and District officials routinely overestimated appropriations and underestimated revenues. Poor budget estimates resulted in revenues exceeding expenditures by approximately $11.3 million, in total in the 2006-07 and 2007-08 fiscal years. The District's budgetary practices have consistently resulted in operating surpluses that District officials have used to increase reserve funds in excess of $16 million. As a result, we found three reserves and an improper post-retirement health insurance liability to be overfunded by a total of $7.7 million at June 30, 2008. The District also entered into an employment agreement prior to our audit period which allowed the former Interim Superintendent's salary of $104,000 for the 2002-03 fiscal year to be deferred. Since that time, the former Interim Superintendent has received partial salary payments from the District totaling $87,690 as of June 30, 2009. We believe the deferral of salary payments was done to allow the former Interim Superintendent to collect her full pension while working full-time at the District for the 2002-03 fiscal year. Baldwinsville Central School District[complete audit - pdf]

Internal Controls Over Financial Condition and Student Transportation Services
The District has accumulated more than $1.1 million that should be used to benefit taxpayers by paying one-time expenditures, funding necessary reserves, reducing debt and/or reducing the tax levy, in accordance with applicable statutory requirements. District officials did not prepare reasonable budgets for the 2004-05 through the 2007-08 fiscal years. As a result of these practices, the District generated an average operating surplus of more than $1.7 million per year. The District has used these surpluses to increase various reserves. In addition, the employee benefit accrued liability reserve is over-funded by almost $200,000. The District also overstated its reserve for encumbrances by approximately $548,000 and $648,000 at June 30, 2007 and June 30, 2008, respectively. Finally, we reviewed contracts and invoices relating to certain specialized transportation routes and determined that the transportation vendor over-billed the District by approximately $33,000. Barker Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
We reviewed the annual compensation of 17 employees. Ten of the 17 employees, or 59 percent, were overpaid or received compensation which was not provided for in the applicable contracts. We also reviewed payments to six employees for the monetary value of their unused leave time and found that three of them were overpaid. In total we identified more than $50,000 in improper or unsupported overpayments. We also found that District officials routinely overestimated appropriations and underestimated revenues, which has consistently resulted in operating surpluses of approximately $6 million, in total, over the last five fiscal years. Finally, District officials were unable to provide adequate justification for the establishment and funding levels for various reserves. As a result, we identified $7.3 million which has been inappropriately placed in reserves but rather should be used to benefit taxpayers. Batavia City School District[complete audit - pdf]

Internal Controls Over Payroll Processing
Internal controls over the District's payroll processing are not appropriately designed because the payroll clerk performs virtually every phase of the payroll process. We also found that the accounts payable clerk has user rights to the payroll module in the District's computerized financial system. This employee does not have any payroll responsibilities and does not need access to the payroll module in order to perform her job duties. Our audit did not identify any material deficiencies. However, to prevent manipulation of payroll records in the future, District officials need to strengthen internal controls over the payroll process. Bath Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
Controls over the Business Office's operations need to be improved. For example, the District's accounting records were not up-to-date because journal entries were recorded as late as six months after the transactions took place. Wire transfers, totaling $492,211, were made without evidence of proper authorization. In addition, the Treasurer did not maintain adequate control over her signature disk. The District's claims audit process also needs to be improved. The claims auditor does not communicate with or report directly to the Board nor does he submit periodic reports to the Board. Furthermore, the District's procurement policy in effect during our audit period did not address the procurement of professional services and did not require the use of competition when obtaining these services. Finally, District officials need to improve controls over computer hardware and data. Bayport-Blue Point Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
We found the District has not developed adequate procedures to effectively procure quality professional services at reasonable prices. We reviewed 21 payments totaling approximately $549,000 that were made to seven vendors for professional services and found that District officials did not solicit competitive proposals or quotes for four vendors. We reviewed additional payments made to the four vendors and found that during the audit period, the District paid over $840,000 to three firms for architectural and engineering services and over $120,000 to a firm for legal services. In addition, the District did not have written contracts with two of these vendors totaling over $344,000. We also found that the Board has not adopted formal policies related to wire transfers. Finally, District officials do not store back-up copies of computer data in a secure off-site location and the data on the copies is not routinely restored to verify its integrity. Beacon City School District[complete audit - pdf]

Budget Review
Based on the results of our audit, we found the significant revenue and expenditure projections in the tentative budget to be reasonable. However, we found that the Board of Education needs to ensure that the District's retained fund balance does not exceed the limit allowed by law. Beacon City School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
We found that District officials did not take adequate action to address the excessive general fund balance. The Board appropriated $2,845,000 of fund balance at June 30, 2007 to reduce the 2007-08 tax levy. The remaining unreserved fund balance of $1,779,311 at June 30, 2006 represented over 6 percent (more than twice the amount allowed by law) of the $27.6 million budget for the 2007-08 fiscal year. The District's unappropriated fund balance for the three fiscal years ended June 30, 2005, 2006 and 2007 exceeded the statutory limitation in each of those years. In addition, internal controls over cash disbursements were not operating effectively. Although the Treasurer and Board President are Board-designated signatories, they do not directly supervise the check-signing process, as required by Education Law. District officials also failed to solicit request for proposals, for 15 of the 16 professional services providers reviewed, totaling $331,000 during the fiscal year 2006-07. Finally, internal controls over IT were not appropriately designed and not operating effectively. Bellmore Union Free School District[complete audit - pdf]

Internal Controls Over Financial Operations
We identified weaknesses in the District's financial operations with regard to the establishment and maintenance of the EBALR fund, control over signature disks and rubber signature stamps, and bank reconciliations. The District has reserved approximately $3.4 million more in its EBALR fund than its liability for compensated absences. The Board President, Treasurer, and District Clerk did not maintain adequate control over their signature disks and rubber stamps, and the Treasurer did not always reconcile bank balances to District records accurately. In addition, because the claims auditor did not perform a proper audit of claims, the District overpaid a rehabilitation facility and a bus company a total of $4,389. We also found that the District's purchasing policies in effect during our audit period did not require that staff use competition when procuring professional services or obtain written contracts for professional services. Finally, District officials have not effectively addressed the safeguarding of computer data by establishing appropriate policies and procedures. Bellmore-Merrick Central High School District[complete audit - pdf]

Policies and Procedures
The policies and procedures established by District officials over the purchasing, cash disbursement, and inventory functions are either not appropriately designed or not operating effectively. There is no policy or procedure for the Superintendent to review all purchase orders prepared or to provide oversight of the orders placed with vendors, with the exception of purchases made by credit card. In addition, there is no policy notifying vendors that District purchases can be made only through the use of approved purchase orders. While the District has policies over recording assets and maintaining inventory records, it lacks procedures for the monitoring of asset records to ensure they are accurate and complete. Bemus Point Central School District[complete audit - pdf]

Computer Recycling and Internal Controls Over Selected Financial Activities
District officials effectively recycled more than six tons of computer and computer related equipment during the 2007-08 fiscal year, which conserved a significant amount of environmental resources. According to the estimates provided by the U.S. Environmental Protection Agency, officials were able to reduced air and water emissions by more than 324 tons simply by recycling its obsolete computers. The Board appointed an employee of BOCES as the District's claims auditor. This is against the New York State Education Department's guidance on interpreting regulations, which states that it may not be appropriate for a BOCES to provide claims auditing services to its component districts, since most of these districts would have material and significant contract payments to that BOCES. Finally, the Director of Food Services did not monitor the financial activities of cafeteria operations to ensure the segregation of key duties or institute compensating controls, that receipts are issued when custody of cash is transferred from one party to another and that money received is deposited into a District bank as soon as possible after it is received. Binghamton City School District[complete audit - pdf]

Internal Controls Over Purchasing
Although the Board has adopted a procurement policy, it is inadequate. The policy requires the Superintendent to follow competitive bidding procedures in all cases where needed quantities of like items will total the maximum level allowed by law during the fiscal year. However, the policy does not identify bidding threshold dollar amounts, provide guidance on emergency and sole source purchases, or address the procurement of professional services. In addition, although the policy requires that procedures be put in place for the purchase of items that are not subject to the competitive bidding process, District officials have not developed procedures describing methods to use when procuring goods and services that are not required to be bid, and at what dollar amount each method will be used. Therefore, the policy does not provide District officials and employees with adequate and proper guidance for procuring goods and services. Blind Brook-Rye Union Free School District[complete audit - pdf]

Internal Controls Over Purchasing and Payroll
Based on the results of our testing, the internal controls over purchasing are appropriately designed and operating effectively. However, District officials did not establish policies and procedures to adequately segregate payroll duties or provide for effective compensating controls. Our testing did not disclose any significant exceptions. At the exit discussion, District officials presented some mitigating controls that they developed and have begun using to offset the lack of segregation of duties in the payroll area. These mitigating controls help ensure that the District's assets are protected against error or impropriety. Brasher Falls Central School District[complete audit - pdf]

Internal Controls Over Extra-Classroom Activity Fund
We found that District officials did not require clubs to maintain suitable cash receipt or cash disbursement records. As a result, club receipt records indicated neither the purpose nor source of cash received, nor did they list the name of the individual remitting the funds to the club. Furthermore, check numbers and vendor names were not listed on club disbursement records. We also noted that the central treasurer receives funds from the club treasurer but does not issue a press-numbered duplicate receipt to the club treasurer in order to formally acknowledge the transfer of club money to the central treasurer. Brocton Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
We found that the Board's contract with the former Superintendent contained unusual provisions that increased his separation payments, and also his annual pension payment, significantly beyond what other school districts provide. The former Superintendent received a total of $739,000 in separation payments the year he retired. We found that these payments were $414,000 to $693,000 greater than he would have received if his employment contract with the District was similar to the superintendent contracts found in comparable school districts in Suffolk County. In addition, District personnel acquired professional services totaling $695,973 during our audit period without using a competitive process. The District also does not have written policies and procedures to govern the use of gasoline purchase cards which were used during our audit period to purchase $24,814 of fuel. The Board has not adopted policies and procedures to monitor remote access or to ensure that changes to access accounts are documented and that user accounts are deactivated in a timely manner. Finally, District personnel have no data recovery procedures and no guidelines or plan to follow to prevent the loss of equipment and data. Brookhaven-Comsewogue Union Free School District[complete audit - pdf]

Regional Information Center
Based on inquiries we made of the RIC management and our review of policies and procedures during our examination of technology services the RIC provided to component (or cross-contracting) school districts, we concluded that, as of October 29, 2008, controls are adequately designed. Broome-Delaware-Tioga BOCES[complete audit - pdf]

Internal Controls Over Information Technology and Retiree Health Insurance Benefits
We found that the District's controls over IT security were poorly designed and unenforced. As a result, 22 of 47 laptop computers we tested were used inappropriately: we found pornographic images and full-length movies, music files, unencrypted confidential student information, and evidence of visits to gambling and social networking websites. Four of these 25 laptops were issued to Board members: one laptop issued to a Board member contained thumbnail-size pornographic images while a second laptop issued to another Board member contained unauthorized software; two other laptops issued to Board members were wiped clean by an outside vendor before we could test them, which suggests that these laptops may have contained inappropriate material. We also found that the District's information systems controls, such as access controls and virus protection, were ineffective. Further, no one monitors to verify that users have only the appropriate level of access rights for computers. Finally, we examined Social Security Administration (SSA) records for 5,269 District retirees and their dependents and determined that six individuals currently insured by the District were deceased. Buffalo City School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District did not establish adequate internal controls over extra-classroom activity (ECA) funds. Specifically, the District did not monitor ECA activities, did not properly segregate the cash receipts duties, and did not keep adequate records. As a result of these internal control weaknesses, approximately $4,000 in ECA funds was stolen by the former central treasurer, who later admitted to petit larceny, was prosecuted in County Court, and made restitution for the $4,000 admittedly taken. Although the District's response to the theft was a review of the internal controls surrounding ECA funds, additional reported bookstore thefts and other discrepancies totaling $3,154 occurred during our audit. District officials also have not established internal controls to help ensure the safeguarding of computer data. Specifically, the Board has not adopted formal policies relating to the physical security of computer equipment and data, access rights, disaster recovery, and acceptable use. Caledonia-Mumford Central School District[complete audit - pdf]

Budget Review
We have reviewed the 2009-2010 tentative budget for the Campbell-Savona Central School District and the budgeted estimated revenues and appropriations appear reasonable. Campbell-Savona Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District and the State each potentially lost about $335,114 in Medicaid reimbursement for the period from July 1, 2007 through October 31, 2008 because the District lacked policies and procedures to define the responsibilities for data collection, documentation, and the submission and reconciliation of claims, and did not effectively monitor the reimbursement process. District officials did not effectively assign responsibilities to the Treasurer to ensure there was a proper segregation of duties and did not establish sufficient compensating controls. Finally, although the District developed a comprehensive handbook and provided training to staff involved in ECA activities, the District did not monitor extra classroom activities for compliance. Specifically, we found cash receipts duties were not properly segregated and adequate records were not maintained. As a result of these internal control weaknesses extra classroom activity cash receipts, totaling approximately $350,000, were at risk of fraud or abuse. Canandaigua City School District[complete audit - pdf]

Internal Controls Over Payroll
Internal controls over the District's payroll processing are not appropriately designed because the Treasurer performs virtually every phase of the payroll process. Specifically, the Treasurer has user access rights in the District's computerized payroll module which allow her to enter new employees, activate and inactivate existing employees, and make changes in employees' hourly and annual salary rates - including her own. She is also responsible for setting up employee payroll deductions and direct deposits, preparing and signing payroll checks, and maintaining payroll records. The Treasurer processes the District's payroll without any oversight or involvement of any other District official or employee independent of the payroll process. Further, District personnel were unaware that payroll change reports could be generated and therefore did not generate or review them. However, our testing of payroll did not reveal any exceptions. Canton Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District established an EBALR during the 2001-02 fiscal year. Although moneys from the EBALR may be used to pay employees for compensated absences (e.g., vacation time) upon separation from District service, none had been used to pay for compensated absences since its inception. The reserve contained $2.6 million in excess funds as of September 30, 2008. Had the District accounted for these excess funds in its general fund, the District would have exceeded the statutory limit of allowable fund balance. According to the Assistant Superintendent for Business, excess EBALR funds were intended to pay for other post employment benefits, which is not a permitted use of EBALR moneys. In addition, we found that the District had not allocated $600,000 of interest earned on EBALR moneys to the EBALR, as required by law. Rather, EBALR interest earnings have been improperly added to the general fund. In addition, District officials did not adequately segregate duties in the Business Office. Carle Place Union Free School District[complete audit - pdf]

Reserve Funds and the Treasurer's Electronic Signature
As of June 30, 2008, the District accumulated Insurance and Liability reserve fund balances totaling $1.18 million. The resolutions establishing these reserves included the titles of the reserves and the dollar amounts transferred to initially fund the reserves. However, the resolutions did not document, and there were no policies or plans to communicate, the Board's rationale for establishing each reserve, the objective, optimal or targeted funding levels or conditions under which assets from each reserve would be used or replenished. In addition, policies and procedures for the Treasurer's electronic signature have not been established. Consequently, the Treasurer does not supervise the use of her electronic signature in the check signing process or review printed checks and compare them to warrants and payrolls for accuracy. Cato-Meridan Central School District[complete audit - pdf]

BOCES was not effectively managing its operating surplus and had no authority to establish a trust account for post-retirement health insurance costs, which totaled $11.3 million at June 30, 2008. This trust account was funded by transferring operating surpluses to the trust and agency fund instead of returning the surpluses to component districts as required. We also found weaknesses in BOCES' internal controls over its computerized accounting system administration. Specifically, BOCES did not properly separate user access and administrative functions within applications and did not properly separate accounting duties from the ability to print and sign checks. Finally, BOCES entered into an inter-municipal cooperative service agreement (COSER) with 18 component school districts to provide for the districts' internal audit function. A BOCES employee can not be considered independent for purposes of performing an internal audit. Cattaraugus-Allegany-Erie-Wyoming BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board has not demonstrated a positive control environment by appropriately complying with all requirements of the Five Point Plan. Specifically, the District did not comply with fiscal oversight training, appointment of an internal auditor, appointment of an audit committee, and formal audit response preparation. The Board's lack of commitment to complying with the Five Point Plan sets the wrong "tone at the top," which could influence employee attitudes toward rules and regulations that are designed to safeguard District resources and taxpayer moneys. Because of the Board's lack of oversight and commitment, we found that the District had excessive fund balance, and did not have adequate controls over extra-classroom activity receipts and information technology. Cattaraugus-Little Valley Central School District[complete audit - pdf]

There is a lack of Board oversight over claims processing. We found that BOCES personnel have not fully complied with the established policies and have not formulated detailed procedures for the audit of claims. We also noted that credit card purchases were not reviewed or audited by the claims auditor. We also found that the Board has not established adequate policies and procedures relating to user access rights and monitoring reports. Cayuga-Onondaga BOCES[complete audit - pdf]

Internal Controls Over Reserves
The District has four reserves in the general fund with reported balances totaling $2.3 million and a fund balance of $519,455 in the debt service fund as of June 30, 2008. We analyzed these funds for reasonableness and adherence to statutory requirements and determined that District officials provided funding for the capital reserve, which exceeds the amount approved by the voters by $400,000, and could not specifically associate debt issues with any portion of the unused fund balance totaling $519,455 in the debt service fund. Chautauqua Lake Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board has not provided for a proper audit of claims. Of 75 claims we examined totaling $187,088, 61 claims totaling $169,866 had one or more deficiencies; tests of an additional 25 credit card claims totaling $17,222 found that 17 claims totaling $13,994 had one or more deficiencies. District officials also allowed the routine use of "confirming" purchase orders (POs), after the purchases were made, which circumvent the PO system. The regular misuse of POs and untimely budgetary transfers contributed to departmental overexpenditures. Twelve of 53 functional unit accounts were overexpended by $1,308 to $466,740 during the 2006-07 fiscal year. In 2007-08, 20 of 53 units were overexpended by $1,390 to $526,309. Further, the Treasurer performed wire transfers and made journal entries without independent oversight. Finally, District officials improperly classified a contractor as an employee and improperly enrolled this individual in ERS. District officials did not consistently notify optional members of their right to membership, and improperly reported seven part-time employees as working full-time. Cheektowaga Central School District[complete audit - pdf]

Internal Controls Over Purchasing
We tested 46 purchases, totaling $343,235 to determine if the District complied with the provisions of its purchasing policy and statute. First, 41 of the 46 purchases (89 percent) examined required the preparation of a requisition; however, none of the 41 complied with this requirement. Second, of the 46 purchases tested, 35 (76 percent) lacked documentation to indicate that the District complied with its procurement policy and GML. These purchases include: security services ($73,000), unleaded gasoline and diesel fuel ($12,211), musical instruments ($16,742), calculators ($26,389) and a pole vault pit ($11,190). None of these purchases were supported by evidence of quotations or bidding. Further testing disclosed that the District paid significantly more for certain items than it would have had they been purchased through readily available OGS or BOCES sources or obtained quotes as required. For the six items tested, we identified $16,258 in possible savings. Cheektowaga-Maryvale Union Free School District[complete audit - pdf]

Financial Condition and Internal Controls Over Selected Financial Activities
District management failed to set the proper “tone at the top,” which can have a negative impact on employees’ attitudes and decisions, and contributed to the District’s financial decline. The Board has not effectively monitored and controlled District finances or adopted realistic budgets, which resulted in an accumulated general fund deficit of $3.5 million as of June 30, 2008. The $3.5 million deficit was 12 percent of the $28.9 million general fund budget for the 2007-08 fiscal year. As a result, District officials obtained approval from the State Legislature and issued $3.5 million in deficit financing bonds. The deficit financing and certain operational changes have allowed the District to complete the 2008-09 fiscal year with a surplus from operations. Finally, the Board appointed an employee of BOCES as the District’s claims auditor. This is against the New York State Education Department’s (SED) guidance on interpreting regulations, which states that it may not be appropriate for a BOCES to provide claims auditing services to its component districts, since most of these districts would have material and significant contract payments to that BOCES. Chenango Valley Central School District[complete audit - pdf]

Budget Review
Based on the results of our audit, we found the significant revenue and expenditure projections in the proposed budget to be reasonable. Chenango Valley Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
We found that the District retained $389,065 of fund balance in excess of the amount allowed by law in the 2007-08 fiscal year budget. By not appropriating more year-end fund balance to reduce the property tax levy, District officials have retained more fund balance than the law allows. We also found that the District had $906,401 in deposits during September 2008 that exceeded the FDIC protection limit and, thus, was not insured. In addition, the purchasing agent did not ensure purchases were made in accordance with District policy. Finally, District officials have not adequately designed user access controls to protect the District's information technology (IT) system against unauthorized access. Chester Union Free School District[complete audit - pdf]

Financial Condition
The District's total fund balance in its general fund has quadrupled over the five fiscal years ending in 2007-08 because District officials did not develop realistic budgets, but continually overestimated expenditures and underestimated revenues which resulted in operating surpluses. As a result, the District has had $20 million in surpluses over the past five years. We estimate that the District has routinely generated 14 percent more tax revenues than it has needed, on average, for ongoing operations. The District has used some of these surplus moneys to fund general fund reserves, which totaled approximately $22 million at the end of the 2007-08 fiscal year and accounted for almost 85 percent of the District's total general fund balance. We estimate that there is almost $4 million of excess funds in the general fund reserves. Churchville-Chili Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
We found that District electronic equipment has been apparently lost or stolen, or removed from District premises by employees, without any documented reason or authorization. We also found significant personal use of District electronic equipment. In fact, it appears that some equipment and software was purchased solely for the personal use of some District employees. Subsequent to our audit, the Board established clearer policies concerning these issues. The Board-appointed claims auditor is not independent of all business and accounting functions as required by law and District policy. Finally, we question the independence of the firm appointed to be the internal auditor because the District has contracted with this same firm to provide significant non-audit services. Clarence Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The BOCES did not maintain the employee benefit accrued liability reserve (EBALR) or unemployment insurance reserve in accordance with statutory requirements. The chief fiscal officer did not furnish financial reports to the Board when required, and reserve funds totaling more than $1.15 million have been used for purposes that were not statutorily authorized. In addition, as of June 30, 2008, the EBALR had $329,487 more than necessary to meet its obligations for compensated absences and the unemployment insurance reserve had enough money to cover unemployment claim expenditures for more than 26 fiscal years. In addition, the internal audit function was not performed in accordance with the Education Law and contract requirements for the 2006-07 and 2007-08 fiscal years. Despite this, the Board reappointed and entered into another contract with the same individual for the 2008-09 fiscal year. Finally, internal controls over the payroll process and receipts and disbursements were not appropriately designed and operating effectively. Cattaraugus-Little Valley Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District improperly paid approximately $27,500 in health insurance and prescription plan premiums and reimbursements of Medicare Part B premiums for deceased individuals or their spouses. We also found a lack of segregation of duties in the Business Office. District officials did not have procedures in place to ensure that the claims auditor audited and approved all claims prior to payment. The Board has not established comprehensive polices and procedures to effectively address the safeguarding of computerized data and assets. Finally, the District established a recycling paper program in June 2008 through the use of a vendor, deriving significant environmental benefits, as well as some additional financial benefits. Cobleskill-Richmondville Central School District[complete audit - pdf]

Internal Controls Over Procurement and Information Technology
The Board has adopted a purchasing policy that outlines when and how to use competitive bidding, and when to obtain quotes. However, District officials did not publicly advertise for competitive bids for payments to four vendors totaling $80,778, or for contracts awarded to three vendors totaling $607,791 that have yet to be paid. In addition, quotes were not obtained for payments to three vendors totaling $6,147. We also found that the purchasing policy does not require District officials to use RFPs when procuring professional services. Therefore, District officials continued to use the same professionals year after year without the benefit of competition. Internal controls over the District's IT system also need to be strengthened. While the Board has adopted policies and regulations to safeguard computer equipment and data, the policies and regulations do not effectively address remote access and server room security. Cold Spring Harbor Central School District[complete audit - pdf]

Internal Controls Over Financial Operations
District officials properly established, but did not properly maintain, the EBALR. The fund was established during 2002-03 by transferring $3,835,217 from an existing accrued liability for compensated absences. Transfers to and expenditures from the reserve totaled $5,830,802 and $383,077, respectively, and have left the fund with a balance of $9,282,942 as of June 30, 2007. This exceeds the liability for compensated absences by $3,857,591. In addition, the Board temporarily appointed the Treasurer to act as the claims auditor for a three month period, even though the Treasurer was not eligible for the position. Finally, although the Board has established a policy for the procurement of goods and services that are not subject to competitive bidding, District officials did not always comply with it. We tested payments to 10 professional service providers totaling $1,773,466 and found that six professionals were hired without the solicitation of requests for proposals, as required by District policy. These providers collectively received $1,044,706. District officials also did not comply with policy when they did not obtain oral or written quotes for nine of the 10 purchase and public work contracts totaling $12,405. Copiague Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials did not claim approximately $562,000 in Medicaid reimbursement to which it was entitled because the District lacked policies and procedures to define the responsibilities for collecting data and documentation, submitting and reconciling claims, and monitoring the Medicaid reimbursement process for IEP services, Targeted Case Management (TCM), and Ongoing Service Coordination. In addition to the almost $562,000 in potentially lost revenue for the District, New York State also lost over $562,000 in reimbursement. The Board adopted a purchasing policy and procedures which generally provides adequate guidance to District officers and employees involved in procuring goods and services. However, we found that these policies and procedures did not provide sufficient guidance in regards to the process for obtaining professional services, when procuring transportation services or using credit cards. Finally, although the District adopted a cellular phone policy, it was inadequate because it did not specifically identify the authorized users and plans or how to determine which phone calls were personal or business-related. Corning City School District[complete audit - pdf]

Internal Controls Over Financial Operations
We found that the duties of the District's Business Manager were not adequately segregated, placing most aspects of the financial cycle under the control of one individual. Board policy directs the Business Manager to be responsible for preparing journal entries, recording disbursements, and performing transfers between District accounts and wire transfers to external accounts. Further, the Business Manager processes all payroll and non-payroll cash disbursements and assigns user access rights to the District's computerized financial system. Our tests of cash disbursements, bank and wire transfers and payroll did not identify any material exceptions. Colton-Pierrepont Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
Effective control procedures and accurate records are important elements of an internal control system over gasoline and diesel fuel inventories. It is essential that District officials ensure that such a consumable inventory is protected from loss and that it is used only for its intended purpose. District officials can fulfill this responsibility by designing and adopting internal controls over their fuel inventories and by monitoring compliance with these controls. A good system of internal controls consists of policies and procedures adopted by the Board that help ensure that fuel inventories are protected from loss or theft. Dansville Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations and Disclosure of Interest
District officials have not developed procedures for assigning, reviewing, and updating user access rights to the financial software application, allowing seven of the nine employees tested to have access rights that were not needed for their jobs. Further, the District has no disaster recovery plan to safeguard computerized financial data from unauthorized access or potential loss. Additionally, one Board member did not disclose his employment with a copy machine firm that has a vendor contract with the District. Although this individual's interest in the firm was not prohibited, disclosure is still required by GML as well as the District's code of ethics. Finally, the Board and District officials did not develop written policies and procedures for monitoring vehicle fuel inventories, did not establish proper controls over fuel access, and did not ensure that fuel dispensing logs were properly kept. Deer Park Union Free School District[complete audit - pdf]

Internal Controls Over Financial Operations and Employee Background Checks
BOCES officials also did not comply with Education Law requiring prior criminal background checks for prospective employees expected to have contact with children. Only 22 of the 149 applicable employees we tested were properly cleared. We also found that the BOCES Board established an accrued liability fund for non-permissible purposes (Other Post-Employment Benefits, or OPEB). The monies in this fund, which totaled $3.5 million at June 30, 2008, constituted fund balance that should have been apportioned to the school districts. The CTE Director did not ensure that occupational center staff maintained sufficient records for the Adult Education and CTE programs, properly used duplicate press-numbered receipts, or deposited moneys in a timely manner. The Board did not adopt policies and procedures to effectively safeguard computerized data and assets. Additionally, BOCES' Business Manager did not ensure that the payroll clerk's duties were adequately segregated. Finally, the Board and school lunch manager did not ensure that cafeteria transactions were authorized or computerized data safeguarded, and did not investigate cash register discrepancies. Delaware-Chenango-Madison-Otsego BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board failed to comply with State Education Department (SED) regulations and Education Law in both areas examined, claims processing and criminal background checks of employees and independent subcontractors expected to have contact with children under the age of 21. In October 2007, the Board appointed an alternate claims auditor to act in the absence of the claims auditor. However, the alternate claims auditor was a spouse of a Board member. Our testing did not identify any improper or unsupported payments or any material discrepancies. We also reviewed personnel files for clearance for employment forms issued by SED for 16 employees, and found District personnel did not ensure that a clearance/conditional clearance for employment was received from SED for three of the 16 employees prior to being employed by the District. Delhi Central School District[complete audit - pdf]

Financial Condition and Internal Controls Over Procurement
The District has accumulated more than $6 million that should be used to benefit taxpayers by paying one-time expenditures, funding necessary reserves, reducing debt and/or reducing the tax levy, in accordance with applicable statutory requirements. While the District appropriates approximately $2 million in fund balance each year, it is not actually used because the District's budgetary practices have consistently resulted in operating surpluses. The District has used these surpluses to increase various reserves. The District also has not been using its Debt Reserve, which had a balance at June 30, 2008 of $1.7 million. Instead, the District levies taxes each year for this purpose, paying debt service from the general fund. The District is also overstating certain liabilities by $2 million and $1.7 million at June 30, 2007 and June 30, 2008, respectively. In addition, although the Board adopted a purchasing policy, District officials have not developed detailed written procedures addressing the procurement of goods and services that are not subject to competitive bidding requirements. Depew Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board and District officials have not established formal written policies and procedures regarding the Treasurer's duties, bank reconciliations, electronic and wire transfers, journal entries or the certification of payrolls. District officials have not properly segregated duties over cash disbursements and have allowed the Treasurer to perform several key duties without adequate supervisory oversight. Our audit also disclosed payments, totaling over $18,700, for additional salaries that were based on memos issued by various past and present District administrators and were paid without any documentation of Board approval. DeRuyter Central School District[complete audit - pdf]

Financial Operations
The Board and Treasurer did not adequately monitor the cafeteria fund's financial condition or take appropriate action to maintain the fund's financial stability. The cafeteria fund's financial condition has declined over the past five years. For four of the last five years the fund has experienced an operating deficit, and at June 30, 2008 the fund had a negative fund balance of $18,713. District officials also did not properly manage cafeteria operations. Specifically, they did not develop policies and procedures to ensure that cafeteria transactions were authorized and recorded properly. Finally, the Board did not appoint an independent claims auditor in accordance with SED regulations. The Board appointed the DCMO BOCES to serve as the District's claims auditor for the 2006-07 and 2007-08 fiscal years. Downsville Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials did not adequately segregate duties for the cash receipts and payroll processes, properly assign user access rights or implement sufficient compensating controls. As a result, there is an increased the risk that errors or irregularities could occur and not be detected and corrected in a timely manner. Dryden Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
BOCES contracted to pay approximately $1.4 million for the salaries and associated expenses of a vendor's employees without ensuring that the contract included sufficient payroll controls. BOCES personnel routinely acquired professional services without seeking competitive prices for those services, and the contracts for these professional services did not always sufficiently describe the details of the services provided or the methods that BOCES could use to measure the quality of the services. BOCES officials have not established sufficient controls over the electronic transfer of moneys, which averaged more than $7.4 million per month. Internal controls over revenues and cash receipts need improvement at both the Manufacturing and Technology Institute business office and the Career and Technical Institute student accounts office. Finally, BOCES did not effectively safeguard its information technology system by establishing appropriate control policies and procedures. Dutchess County BOCES[complete audit - pdf]

Budget Review
Based on the results of our audit, except as noted, we found that the budgeted estimated revenues and appropriations appeared reasonable. The District's tentative budget does not include an appropriation for payments to retiring employees for their unused leave time, which we estimate to be $214,000. In addition, we found that District officials had generally implemented the recommendations we made in our prior budget review audit report, issued in April 2008, regarding appropriating adequate funds for the costs of health insurance, BOCES services, and utility and fuel purchases. East Moriches Union Free School District[complete audit - pdf]

Internal Controls Over Purchasing
The accounts payable clerk handled almost all phases of transactions including vendor maintenance, recording purchase orders, and preparing and recording disbursements, while having the ability to add/delete/modify any of these items. This lack of segregation of duties resulted in a poor system of internal controls, which may allow for errors or irregularities to occur and remain undetected. In addition, the purchasing policy did not require the solicitation of requests for proposals (RFPs) or sufficiently detail an alternative for the procurement of professional services. District officials did not use an RFP process or other competitive means to select vendors for professional services. We also found that District officials paid a transportation provider $388,888 more than the contracted amount, and expended $44,800 for athletic transportation without the use of competitive means. East Rochester Union Free School District[complete audit - pdf]

Regional Information Center
Based on inquiries we made of the RIC management and our review of policies and procedures during our examination of technology services the RIC provided to component (or cross-contracting) school districts, we concluded that, as of December 31, 2008, controls are adequately designed. Eastern Suffok BOCES[complete audit - pdf]

Internal Controls Over Professional Services and Computer Access Rights
Although the Board has adopted a purchasing policy, the policy does not require District officials to use competition, such as requests for proposals (RFPs) when procuring professional services. As a result, District officials made payments for professional services, such as counseling, legal and athletic training, totaling $248,139, during the 2007-08 fiscal year without seeking competitive proposals or quotations. In addition, the Board has not adopted comprehensive policies and procedures to ensure that access to the District's computerized data is restricted to only those functions required by individual employee's job duties. District officials also have not implemented access controls to ensure proper segregation of duties within the computer system and limit access to users based on their job descriptions and responsibilities. Edgemont Union Free School District[complete audit - pdf] |

Fund Balance and Internal Controls Over Selected Financial Activities
The District's general fund liabilities, reserve for encumbrances and fund balance were not properly reported, which resulted in the understatement of the general fund's fund balance by more than $8.2 million. The District reported an unreserved, unappropriated general fund balance at June 30, 2008 of $2,138,859 (4.95 percent of 2008-09 appropriations), which exceeded the 4 percent allowed by law. Our review of the general fund's reported accrued liabilities, reserves and fund balance and the reported fund balances of the District's other funds disclosed unsupported and improper accrued liabilities and reservations of fund balance. If these accruals and reservations of fund balances were properly made and reported, the resultant general fund unreserved, unappropriated fund balance would have been as much as $10,390,028 or 24 percent of 2008-09 general fund appropriations. Finally, there are weaknesses in the District's information technology controls relating to policies and procedures, third-party access and disaster recovery planning. Ellenville Central School District[complete audit - pdf]

Internal Controls Over Technology Equipment
We reviewed BOCES' accepted practices for inventory maintenance, and discussed the procedures with technology coordinators from 11 school districts who leased BOCES equipment, to determine if the districts were following these accepted practices. BOCES failed to formally adopt policies and procedures or implement and monitor its unofficial procedures to identify and track individual BOCES-owned equipment that was located in various school districts. Although BOCES had a procedure to update equipment records following periodic physical inventories, districts were not conducting the inventories as expected. Districts were not disposing of equipment in accordance with BOCES requirements or adhering to BOCES insurance requirements. In addition, management failed to report on findings associated with the review that the BOCES claims auditor oversaw, which included testing a sample of district inventories. Erie 1 BOCES[complete audit - pdf]

Regional Information Center
Based on inquires we made of the Regional Information Center (RIC) management and our review of policies and procedures during our examination of technology services the RIC provided to component (or cross-contracting) school districts, we concluded that, as of February 23, 2009, controls were adequately designed. Erie 1 BOCES[complete audit - pdf]

Board of Cooperative Educational Services
BOCES' audited financial statements reported five reserves with balances totaling $6.7 million as of June 30, 2008. We found that while BOCES properly established and used three of these reserves, the Board never established the EBALR and it improperly established and funded the workers compensation reserve. We also found that BOCES did not properly fund the liability and the CTE equipment reserves and overstated a current liability associated with the EBALR. As a result of these actions, at least $6.3 million was not properly refunded to the component school districts. Erie 2 Chautauqua-Cattaraugus Board of Cooperative Educational Services[complete audit - pdf]

Financial Condition
The District has accumulated in excess of $16.6 million that should be used to benefit taxpayers. The District's total fund balance in the general fund has doubled from approximately $18.7 million at June 30, 2004 to over $37.8 million as of June 30, 2008. This occurred because the Board and District officials consistently overestimated expenditures and underestimated revenues, resulting in significant operating surpluses for the past five years. We found that officials raised the tax levy 17 percent, from approximately $51.9 million in the 2003-04 fiscal year to over $60.9 million in 2007-08, even while incurring these significant operating surpluses. The District's fund balance would exceed statutory limits except that the District used a variety of strategies to evade these limits, such as, annually appropriating as much as $1.5 million in fund balance that was not needed to finance operations, increasing reserves and improperly recording accrued liabilities. Fairport Central School District[complete audit - pdf]

Financial Condition and Internal Controls Over Selected Financial Operations
The Board's budgetary practices, resulted in excessive unreserved fund balance, and the establishment and maintenance of reserve funds in amounts that are not necessary or reasonable. Even though a total of $4.6 million of unreserved fund balance was appropriated to reduce the tax levy over the last five fiscal years, the tax levy still increased by $612,636 in order to meet unrealistic budgetary estimates for District operations. The District's budgeted appropriations have exceeded actual expenditures by a total of $8.6 million over the past five years and revenues were underestimated by a total of more than $1.6 million for the same five fiscal years. As of June 30, 2008, the unreserved, unappropriated general fund balance totaled $2,905,881. This amount was approximately 15 percent of the subsequent year's appropriations, or more than three and one-half times the amount allowed by law. In addition, we question the need for approximately $5.2 million in District reserve funds. District officials also have not properly segregated the cash receipt process within the Business Office or limited access to the computerized financial system in the Business Office. Falconer Central School District[complete audit - pdf] |

Internal Controls Over Selected Financial Activities
District officials did not ensure that purchasing policies and procedures were implemented and working as designed. The Board adopted a purchasing policy and administrative regulation (regulation) to govern purchasing activities, but District officials did not always follow the regulation with respect to competitive bidding and obtaining price quotes for procurements below competitive bidding thresholds. In addition, the District officials awarded professional service contracts without the benefit of competition and the Board did not enter into written agreements with two of the six professional service providers. Finally, internal controls over the cash receipt process are not appropriately designed or operating effectively because District officials have not segregated recordkeeping and cash handling functions for health insurance contributions and there are no procedures to compare cash logs with bank statement deposits. Fayetteville-Manlius Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District had not adequately segregated duties over the cash receipts and disbursements processes. The payroll clerk performed incompatible job duties without supervisory review as a compensating control. The payroll clerk controlled every aspect of managing the Extra-Classroom Activity (ECA) funds, and we found that approximately $43,000 was not deposited intact, $7,260 in expected receipts were unaccounted for, and $21,000 in receipts were not deposited in a timely manner. Approximately $3.7 million in disbursements were not supported by a warrant certifying the Board's approval for payment and claims did not have sufficient documentation or itemization. In addition, because the District had poor controls over payroll processing, employees received additional pay totaling $139,058. The District's unreserved fund balance was about four times the amount allowed by law. The BOCES employee serving as the internal auditor is not independent in performing the internal audit function. Finally, we found that internal controls over the District's financial management system and network were inadequate. Fillmore Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
Internal controls over administrative staff compensation and expenses were not appropriately designed and operating effectively. As a result, six administrative staff members received compensation totaling $5,162 that was not authorized by the Board. In addition, administrative staff did not use BOCES-provided vehicles and cellular phones in accordance with the Board's established policies and procedures. Although BOCES' policy allows for only minimal personal use, we found a significant percentage of the mileage of certain administrator-assigned vehicles was for non-business purposes at an estimated value of $22,956. In addition, administrative staff members assigned cellular phones incurred more than minimal personal use and did not always reimburse BOCES for their personal cellular phone charges in a timely manner. Finally, we identified leave time valued at over $58,950 that was neither credited nor used in accordance with the terms of applicable employment contracts or collective bargaining agreements. Franklin-Essex-Hamilton BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District's procurement procedures were not appropriately designed or operating effectively. We found that District officials did not solicit competitive proposals prior to selecting six professional service providers who were paid $267,379. We also found that the District did not use competitive bidding as required for four purchases and three public work contracts, totaling $177,074. We also tested 20 payments totaling $47,586 that required written or verbal quotes, and found no evidence that District personnel had attempted to obtain quotes for 13 purchases totaling $23,607. Internal controls over the check-signing process were not adequately designed and were not operating effectively. We also found that the District improperly classified an independent contractor, an attorney, as an employee and enrolled this individual in the New York State and Local Retirement System. Finally, the Board did not establish and implement effective controls to protect the District's computer systems and data from illegal or damaging actions by individuals. Franklin Square Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials established an unauthorized other post-employment benefits (OPEB) insurance reserve fund, and classified a portion of its general fund balance as such. However, there is no statutory authority for this reserve. If the District had properly classified the funds, the unreserved, unappropriated fund balance would have been reported as $710,656, at June 30, 2008, which is more than twice the amount allowed by law. We also found that while the District had established procurement policies and procedures, it failed to include guidelines for selecting professional service vendors. In addition, the employee serving as the internal auditor is not independent in performing the internal audit function. Lastly, internal controls over cafeteria operations were not appropriately designed or operating effectively. Friendship Central School District[complete audit - pdf]

Interest in Contracts
The District did not have policies and procedures to detect potential conflicts of interest and prevent District officers or employees from entering into prohibited contracts. We found that a music teacher may have a prohibited interest in contracts with the District. The music teacher's spouse owns a music store that provides musical instruments, supplies, and equipment repairs to the District. During our audit period, the District made $17,740 in purchases from the music store. The music teacher told us that, although she does not perform any services relating to the store's operation, does not own any company stock, and is not paid any compensation by the store, she is the Corporation Secretary for the store. We found that not only did the music teacher help determine what types of equipment would be bought from her husband's store, she also signed the claims to provide evidence of the receipt of the goods and services. Finally, the music teacher did not publicly disclose her involvement in these contracts in writing to her supervisor or to the Board. Fulton City School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District has used available fund balance to increase the balance in the EBALR to $8,125,479 at June 30, 2007. However, as of June 30, 2007, the liability for termination payments that can be paid from this reserve totaled only $2,957,592. As a result, the District has over-funded the liability for compensated absences by $5,167,887 (175 percent). We also found that there were no written procedures for the protection and use of electronic signatures, or for the appropriate authorization and review of online banking transactions. District officials did not include the annual salaries paid to eight administrators and five technology specialists, totaling $1.6 million, in the Board minutes. The District also paid five vendors a total of $732,571 for professional services without soliciting competitive proposals. Finally, the District does not have written policies and procedures that address the areas of computer user permissions and disaster recovery. Garden City Union Free School District[complete audit - pdf] |

Internal Controls Over Selected Financial Activities and Information Technology
The District's unreserved unappropriated fund balance of $1 million on June 30, 2008, or 11.33 percent of the 2008-09 budget, exceeded the legal limit of 4 percent by $652,783. In addition, the District's purchasing policy needs to be improved. The District's purchasing policy does not require the use of competition or contain procedures to be used to procure professional services, which are exempt from competitive bidding. Finally, District officials have not sufficiently addressed the safeguarding of computerized data. Officials have not implemented appropriate access controls and did not implement a procedure to delete inactive employees from the active directory and the accounting system on a timely basis. In addition, the District had no formal disaster recovery plan. Garrison Union Free School District[complete audit - pdf]

Internal Controls Over Purchasing
We reviewed 10 contracts totaling $558,051 for compliance with competitive bidding requirements. District officials appropriately used OGS contracts or contracts awarded through cooperative bidding for seven of the 10 contracts totaling $507,945. However, District officials either did not comply with GML competitive bidding requirements or OGS contract requirements for three of the 10 contracts totaling $50,106. We also reviewed 10 purchase and public work contracts totaling $59,253 that were not subject to competitive bidding requirements to determine the extent to which District personnel sought competition. The District obtained at least two quotes or made purchases through cooperative bidding arrangements for seven contracts totaling $41,767. However, the remaining three purchases totaling $17,486 either lacked documentation that quotes were obtained from more than one vendor or lacked documentation to justify why the vendor that submitted the lowest quote was not selected. General Brown Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
We found that BOCES has not properly estimated and disclosed administrative and programmatic costs to its component districts with regard to the funding and use of an EBALR. Additionally, BOCES did not have written policies and procedures to provide guidance and oversight for these financial operations. BOCES intentionally over-estimates certain fringe benefit budget appropriations, resulting in over-charges to its component school districts, which contributed to consistent year-end surpluses. BOCES withheld $133,700 of the 2007-08 surplus without prior disclosure to the component districts, and used these funds to increase its EBALR. In addition, BOCES purchasing policy does not address the procurement of professional services, which are not subject to competitive bidding requirements. We determined that BOCES paid approximately $675,000 to 11 service providers without seeking requests for proposals or competitive quotes. Genesee Valley BOCES[complete audit - pdf] |

Internal Controls Over Selected Financial Activities
Two of the seven Board members did not obtain the required six-hour training on financial oversight, accountability, and fiduciary responsibilities. Additionally, a third Board member did not obtain the training within the first year of his election, although he completed the required training 29 months later. The District reimbursed three employees a total of $12,556 for waiving their rights to participate in the District's health insurance plan. However, District officials did not have Board authorization granting this benefit to the three employees. In addition, District officials did not adequately segregate key duties related to payroll processing. District officials did not obtain the required number of quotes for seven of the procurements, costing $46,328. The Treasurer did not control the use of or properly secure her signature disk. District officials have not tested their disaster recovery plan to ensure that it will function as intended. Finally, District officials have not tested or restored data on backup tapes to ensure the integrity of the data. Glen Cove City School District[complete audit - pdf]

Internal Controls Over Selected Operations
District officials did not establish adequate controls over performance of criminal background checks. Consequently, background checks were not performed for 20 of the 23 independent contractors we tested, who had direct contact with students. The independent contractors provided services such as nursing, physical therapy, special education, occupational therapy, and psychiatry. District officials also did not establish adequate controls over purchasing and information technology. Goshen Central School District[complete audit - pdf]

Internal Controls Over Financial Condition and Potential Conflict of Interest
The District has accumulated approximately $3.5 million that should be used to benefit taxpayers by paying one-time expenditures, funding necessary reserves, reducing debt and/or reducing the tax levy, in accordance with applicable statutory requirements. While the District appropriates approximately $2 million in fund balance each year, it is not used as intended because the District's budgetary practices have consistently resulted in operating surpluses during the last four fiscal years. In addition, the District improperly reports a Debt Reserve in the general fund (instead of the Debt Service Fund) and does not have a plan to use Debt Reserve monies, which totaled more than $900,000 at June 30, 2008. The District also overstated its reserve for encumbrances by an average of $650,000 each year. Finally, we evaluated a potential conflict of interest with the Board President, relative to his employment with an architectural firm that the District hired. Based in part upon written representations from the Board President and an individual from the architectural firm, a prohibited conflict of interest does not appear to exist. Grand Island Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials did not adequately segregate duties over the financial operations of the Business Office. The Business Manager had complete control over District fiscal activities with little oversight of her work. The Business Manager oversees the Business Office and also serves as the District Treasurer and purchasing agent. District officials also did not establish proper controls over the District's payroll process. The Board did not adopt written payroll policies and District officials did not establish written procedures, so the payroll clerk (clerk) developed and implemented her own informal procedures. Also, District officials did not have a system in place to track the accrual and use of compensatory time. The duties of the employees involved in the payroll process were not adequately segregated and the few mitigating controls in place over payroll did not adequately compensate for the overall lack of segregation of duties. Finally, a member of the District's Board of Education had a prohibited interest in business the District conducted with a local vendor. The District paid $5,014 for services in 2007-08 and $6,423 in 2008-09 to a printing company owned and operated by the spouse of a member of the Board of Education. Granville Central School District[complete audit - pdf]

Internal Controls Over Purchasing
We examined 50 claims to determine whether the District implements control processes to ensure that purchase orders are properly initiated and approved before purchases are made, that claims are approved by the claims auditor prior to payment, and that purchases are for appropriate District purposes. Overall, we found that the District had established adequate internal controls over purchasing and that these controls were working effectively. Greater Amsterdam School District[complete audit - pdf]

Budget Review
We have reviewed the 2009-10 tentative budget for the Greater Amsterdam School District and found that the budgeted estimated revenues and appropriations appear reasonable. Greater Amsterdam School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board has not demonstrated a positive control environment by taking an active role in managing and overseeing the BOCES' operations. Specifically, seven of the 11 Board members did not take the required fiscal oversight training within the first year of election. The audit committee did not meet their fiduciary responsibilities because they recommended the acceptance of inaccurate financial reports and did not ensure the implementation of all corrective action plans prepared by BOCES officials in response to various audits. As a result, the BOCES' general fund liabilities were overstated by $3.2 million. In addition, liabilities in the special aid fund and trust and agency fund (T&A) were overstated by over $1.5 million and $500,000, respectively. This resulted in a total overstatement of liabilities, including deferred revenues, of approximately $5.2 million. We also found BOCES improperly accumulated moneys in the insurance reserve for unauthorized purposes. Finally, the BOCES' controls over payroll were not appropriately designed or operating effectively. Greater Southern Tier BOCES[complete audit - pdf]

Regional Information Center
RIC personnel had unlimited access to all school districts' networks and the financial applications that they service. Furthermore, RIC personnel had administrator rights on the financial systems application, giving them the ability to access all modules within this application. We included similar findings in our prior examination report dated January 19, 2007. Greater Southern Tier BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District's audited financial statements as of June 30, 2007 showed an unreserved, unappropriated fund balance in the general fund totaling $2.8 million. This was in excess of the amount allowed by Real Property Tax Law by about $1.2 million. In addition, the Board inappropriately established a tax certiorari reserve fund of nearly $2 million in October 2007 to retroactively fund the settlement of tax certiorari cases of the preceding 2006-07 fiscal year. The District also procured approximately $250,000 in professional services from seven vendors without using requests for proposals (RFPs) or soliciting competitive quotes. The District has not adequately segregated duties in the payroll function and the Treasurer's office. The District does not have a procedure in place to ensure that background checks are performed on independent contractors who have direct contact with students. Finally, the District has not developed adequate security measures to safeguard some computerized data and hardware. Greenburgh Central School District No. 7[complete audit - pdf]

Internal Controls Over Information Technology
The Board and District officials did not did not adopt a District-wide security plan, disaster recovery plan, or ensure that unauthorized software was not installed on a District computer. In addition, they did not ensure that access rights were terminated when individuals left District service, and there were no policies, procedures or oversight mechanisms for the use of mobile storage devices. As a result, unauthorized software was installed on District computers and 13 individuals that had left District service had access rights to the computer system. Greenburgh Eleven Union Free School District[complete audit - pdf] |

Internal Controls Over Selected Financial Activities
The Board needs to improve its oversight of District operations. Three of the nine Board members did not complete the required training as set forth by State Education Law. We also found that all nine Board members did not properly disclose their interest in contracts with the Graham Windham Agency and one Board member did not properly disclose her interest in contracts with a bank. Board members were unaware that personnel in the District's Business Office were receiving a 5 percent salary increase annually. Finally, the claims auditor did not report directly to the Board. As a result of these weaknesses, Board members did not receive sufficient training, maintain an environment of transparency, ensure that employees received only the compensation that was authorized and the effectiveness of the claims audit process was diminished. Greenburgh-Graham Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The Board needs to improve its oversight of the District's financial operations and District officials need to improve the internal controls over purchasing and cash disbursements to ensure that District assets are adequately safeguarded. None of the Board members complied with the fiscal accountability legislation of 2005 that requires six hours of training on their financial oversight, accountability, and fiduciary responsibilities. In addition, the Board did not require the Treasurer to submit monthly or quarterly financial reports for its review, did not audit claims or appoint a claims auditor, and did not establish an audit committee to oversee and report on the external auditor. We also found that internal controls over purchasing were not appropriately designed and operating effectively. For example, District officials did not competitively bid purchase and public work contracts totaling $473,215 or solicit competitive proposals for professional services totaling $106,010. Finally, internal controls over cash disbursements also need to be improved. Greenburgh-North Castle Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
We found weaknesses in the internal controls over payroll caused by the lack of segregation of duties, which were compounded by insufficient management oversight. Internal controls over purchasing also need improvement. For example, the District paid approximately $56,900 to three service providers without obtaining requests for proposals as required by District policy, and did not execute written agreements for these services. Because the District has a relatively small Business Office, the Treasurer is performing many conflicting duties. We also found that District officials placed approximately $1.9 million in the Employee Benefits and Accrued Liability Reserve (EBALR) at the end of the 2007-08 fiscal year for the purpose of funding prior service payments to the New York State and Local Employees' Retirement System (ERS). This is not a proper use of the EBALR. Finally, District taxes are collected by the Town of Warwick's Receiver of Taxes, which delays the deposit of funds into the District's bank account. We determined that the District could have earned almost $17,000 in interest during our audit period if deposits were made on a timely basis. Greenwood Lake Union Free School District[complete audit - pdf]

Internal Controls Over Payroll
We found that the District has established an adequate system of internal controls over payroll which is appropriately designed and operating effectively to safeguard District assets. Our testing revealed only minor discrepancies in the District's adherence to its policies, which we discussed with District officials to help them improve controls in this area. Half Hollow Hills Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
Our testing of 27 former employees and their eligible dependents receiving post-employment health benefits revealed that the District did not have the necessary records to support over $25,000 paid annually for six individuals, 22 percent of those tested. For instance, the District did not have personnel folders or other employment records for three individuals receiving post-employment health insurance benefits. The District's share of insurance premiums for these individuals totaled $9,979 annually, as of March 2008. We also found that although the Treasurer's cash disbursement duties for manual checks and wire transfers are not properly segregated, management has provided for routine, independent reviews of related Treasurer's transactions by a BOCES CBO employee. We concluded that these compensating control procedures adequately mitigate the risk of undetected errors or improprieties. Hamilton Central School District[complete audit - pdf]

Board of Cooperative Educational Services
We found that BOCES officials had neither established a comprehensive business plan nor written policies and procedures to properly segregate CBO staff duties before implementing the CBO service. Additionally, they did not define the level of authorization required to process transactions nor establish standard authorization forms to be used by the districts. Finally, the system did not adequately control access to district financial data. As a result, there is a likelihood that errors and irregularities could occur and neither BOCES officials nor component district officials would detect them in a timely manner. Another risk evolving from the failure to adequately control access to district financial data is that the CBO could unknowingly process improper or fraudulent district transactions. Hamilton-Fulton-Montgomery Board of Cooperative Educational Services[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Treasurer is the only staff person and therefore performs incompatible cash disbursement and bank reconciliation duties. Although compensating controls have been established, they could be enhanced by having someone other than the Treasurer receive bank statements and cancelled checks for review prior to the reconciliations being performed. In addition, the procedures for claims auditing have not been followed, resulting in 47 of the 165 claims tested, totaling $387,889, not being listed on warrants to indicate they had been audited and approved by the Board. Hammond Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The Board did not appoint an independent claims auditor in accordance with State Education Department guidance. Instead, the Board appointed a BOCES employee to serve as the District's claims auditor. The District's budgeted appropriations for BOCES services for the 2008-09 fiscal year represent 10 percent of the District's general fund budget. The District's significant spending for BOCES services results in an independence impairment for the claims auditor who, as a BOCES employee, is approving District payments to her employer. Also, although internal controls over payroll need improvement, our audit of payroll transactions did not find material exceptions. Hammondsport Central School District[complete audit - pdf] |

Internal Controls Over Selected Financial Activities
The District's purchasing policy is inadequate and does not comply with General Municipal Law (Law) because the policy does not require District officials to seek competition or include procedures to be used when procuring professional services. The District obtained the services of 14 of 23 professional service providers who were paid $540,822, for services such as legal, nursing, and physical therapy, without seeking competition through requests for proposals or quotations. We also found that the policy does not require written agreements with professional services providers. There are no written contracts for 14 of 36 special education service providers, who were paid a total of $119,447 for services provided during the 2007-08 and 2008-09 fiscal years. Finally, District officials have not established effective internal controls to safeguard computer equipment and data. Hendrick Hudson Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District has reserved approximately $10.1 million more in its employee benefit accrued liability reserve (EBALR) fund than its liability for compensated absences. District officials did not always use the EBALR funds to pay employees for compensated leave benefits; instead, they used general fund appropriations. The District's administrative salary costs for all of its administrators, excluding fringe benefits, were higher than the costs for three other neighboring school districts. The District's costs-per-student for fringe benefits provided to its Superintendent and three Assistant Superintendents also were approximately $45 higher than the average costs of the other three neighboring school districts. If the Board had achieved an administrative salary and fringe benefits cost-per-student similar to the average of the other three districts in the area, it could have realized a total savings of about $838,000 in the 2006-07 fiscal year and $881,000 in 2007-08 fiscal year. In addition, the District improperly classified an independent contractor (an attorney) as an employee and improperly enrolled this individual in the New York State and Local Retirement System (NYSLRS). As a result, NYSLRS revoked the attorney's membership status in December 2008. Finally, District officials need to improve controls over the collection of cash receipts, check-signing procedures, and information technology. Hewlett-Woodmere Union Free School District[complete audit - pdf]

Internal Controls Over Purchasing and Payroll
Although the Board has adopted a purchasing policy, the policy does not address the procurement of professional services. For our audit period, 22 professional service vendors were paid a total of $1,053,000. We found that District officials solicited requests for proposals for only two of the 22 vendors. In addition, although there were written agreements in place for 16 vendors, there were no written agreements for the other six. We also found that the Board needs to establish policies and District officials need to develop related procedures for payroll expenditures to ensure these expenditures are prudent and properly authorized. Hilton Central School District[complete audit - pdf]

Internal Controls over Selected Financial Activities
The Board appointed a claims auditor from BOCES. The District spent approximately $5 million for BOCES services during the 2007-08 fiscal year; further, the budgeted appropriations for BOCES services for the 2008-09 fiscal year totaled $4.5 million, 16 percent of the District's total 2008-09 general fund budget of $28.9 million. The District's significant payments to the BOCES results in an independence impairment for the claims auditor, who, as a BOCES employee, is approving District payments to her employer. In addition, the District's internal controls over wire transfers were not adequately designed and operating effectively. District officials had not adopted written policies and procedures for wire transfers. The Treasurer controlled all aspects of the wire transfer process without independent verification and/or effective mitigating controls by another District official. Hornell City School District[complete audit - pdf]

Computer Access Controls
We reviewed a user access report that listed District's financial accounting system's 75 active users to determine whether the District assigned access rights in accordance with job descriptions. We found that an accounting firm was inappropriately assigned a user account with the ability to add, update, and delete data in the budget maintenance area. We also selected 13 users with significant access and compared their access rights to their job descriptions. We found that eight Business Office employees had access to aspects of the accounting system that were not required as part of their job functions. This access resulted in inadequate segregation of duties.We found only minor exceptions with the transactions we reviewed, which we discussed with District officials. Huntington Union Free School District[complete audit - pdf]

Internal Controls Over Payroll Processing
We identified weaknesses in internal controls over the District's payroll process. There were no written procedures in place for processing payroll which resulted in the Treasurer developing her own informal procedures. The preparation of payroll is rotated between the Treasurer and clerk approximately every two weeks. However, the informal procedures do not provide sufficient mitigating controls where the work of one employee is checked by the other. We also noted that the Treasurer, who has payroll preparation responsibilities, also has administrative rights to the payroll software application. This gives her the ability to add, delete or change payroll information without oversight or approval by District officials. Indian Lake Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board and District officials accumulated nearly $1.7 million of unused cash in an employee benefit accrued liability reserve fund while paying associated costs from operating funds, and did not establish or enforce adequate controls over financial operations. The District's procurement and payroll-related transactions often did not comply with applicable laws and/or District policies, which may have resulted in excessive costs. For example, District officials did not request public bids for two purchases totaling $42,912 and two public works contracts totaling $109,143. In addition, District officials also did not properly authorize, document, and monitor overtime. For example, of $200,961 that the District paid for overtime in fiscal year 2007-08, 11 employees received $138,503 without written pre-approval or justification. Finally, we found weaknesses in the District's governance of information technology operations and its reporting of employees' retirement system service credits. Island Park Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations and Potential Cost Savings
The District's written procurement policy does not include specific procedures to follow for obtaining requests for proposals (RFPs), written quotations, or verbal quotations and the circumstances when each method should be used. We also found that the District did not competitively bid purchases totaling $268,864 as required by GML. In addition, District officials did not segregate the Treasurer's cash receipts duties or implement other compensating controls during the majority of our audit period. The Treasurer also did not supervise and control the use of her facsimile signature, and was not notified when her signature was applied to accounts payable checks. The Board did not audit claims during our audit period, and had not appointed a claims auditor. Finally, the Superintendent and IT Director have not developed procedures and practices relating to a formal disaster recovery plan, network time-outs after a period of inactivity, and the review of user access rights. We also found that the District could save $40,100 annually if power management features were implemented regarding the power settings of District computers. Ithaca City School District[complete audit - pdf]

Internal Controls Over Purchasing
We found that District officials have not established and adhered to effective purchasing policies and procedures. The District's purchasing policy in effect prior to March 2008 was inadequate. In March 2008, the Board adopted a new purchasing policy and established procedures to comply with the policy. The policy requires that written quotes be used for purchases costing $1,001 to $10,000. However, the policy is not specific as to the number of written quotes that need to be obtained. Irvington Union Free School District[complete audit - pdf]

Budgeting Practices and Internal Controls Over Selected Financial Operations
We found that the Board and District officials annually presented inaccurate and unrealistic budgets for voter approval. District officials engaged in certain practices that impede budget transparency, such as commingling discrete revenue sources and withholding the full amount of the District's anticipated State aid from proposed budgets. We also found that the District used monies from its Employee Benefits Accrued Liabilities Reserve for purposes that did not conform to legal requirements. The District also holds about $214,000 in a debt service fund that represents excess funds that could be used for other purposes to benefit taxpayers. In addition, the District improperly paid more than $133,000 in salary increases and other benefits to certain District officials and employees without Board authorization. Further, the District and the State each potentially lost about $112,388 in Medicaid reimbursements for the period July 1, 2006 through April 30, 2008 because the District lacked policies and procedures to define the responsibilities for data collection, documentation, and the submission of claims, and did not effectively monitor the reimbursement process. Finally, the District's controls over procurement need improvement. Jasper-Troupsburg Central School District[complete audit - pdf]

Internal Controls Over the Treasurer's Duties and User Access Rights
Although the Board has established policies regarding the District's finances, these policies do not adequately segregate the Treasurer's duties. Due to the lack of adequate policies, District officials did not adequately segregate these duties, and most mitigating controls in place were not effective. We do commend the District for changing administration of access rights to the financial software from the Treasurer to the IT Director, which does mitigate risk. However, District officials can further alleviate risk by limiting computer user access rights in the financial software based on user's job duties. Johnson City Central School District[complete audit - pdf]

Financial Condition and Internal Controls Over Procurement
We found that the District's budgeting practices have resulted in the District accumulating in excess of $22 million in excess funds that should be used to benefit taxpayers by paying one-time expenditures, funding necessary reserves, reducing debt and/or reducing the tax levy, in accordance with applicable statutory requirements. If the District had used appropriate budgeting practices, real property taxes could have been significantly lower. In fact, there appears to be a pattern of adopting budgets that generate more revenue than required for District operations and then adding the unused balance to reserve funds. In addition, our review of the District's procurement process disclosed numerous systemic problems. District officials improperly use blanket purchase orders to circumvent procurement requirements and certain departments do not properly use the accounting system or require annual bids. District officials' ability to monitor these activities is hindered by deficiencies with the District's financial accounting system. Consequently, the District is unable to readily monitor aggregate purchases of similar goods to ensure compliance with purchasing policies and applicable statute. Kenmore-Town of Tonawanda Union Free School District[complete audit - pdf]

Internal Controls Over Payroll
District officials have not adopted written policies and procedures for payroll processing, and the informal procedures followed by staff were inadequate. Leave time accrual balances were not consistent with provisions of collective bargaining agreements or individual contracts, and leave time usage was not properly charged against employees' leave accrual records. The failure to maintain accurate leave accrual records resulted in the incorrect crediting of accrued vacation and sick time to five of the 14 employees we tested and may have resulted in overpayments of more than $10,000 to a former official. In addition, the District did not control employee overtime by requiring written pre-approval, supporting documentation, and verification of time worked, resulting in approximately $8,500 in overtime payments that were not properly authorized for four of the six employees we tested. Finally, the failure of District officials to obtain proper Board approval allowed a former official to receive a $7,500 stipend which may not have been the Board's intent. Kings Park Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The District’s Board President and Vice President also are officers of the board of directors of a not-for-profit corporation that entered into a lease agreement with the District for a school building. While District taxpayers approved the lease alternative, and the payments are based on an independent appraisal of the fair rental value, if the District continues to make payments over the 30-year lease period, District taxpayers will be burdened with rent payments totaling approximately $38 million, assuming a 3 percent annual inflation rate, and would not own the building at the end of the lease period. If the District had obtained voter approval and financed the construction with serial bonds at an annual interest of 6 percent, the total cost of the building to District taxpayers would have been approximately $35 million – resulting in a savings of about $3 million over 30 years – and the District would own the building. The Board’s procurement policy needs to be improved because it does not provide proper and detailed guidance for District employees when procuring goods and services. In addition, the District’s claims auditor did not report to the Board as required by law and did not meet independence requirements established by Education Law and SED guidance. Finally, District officials failed to prepare and file the District’s annual financial report (ST-3 report) and annual audit report for the 2005-06, 2006-07, and 2007-08 fiscal years with SED and the Office of the State Comptroller (OSC) on a timely basis. Kiryas Joel Union Free School District[complete audit - pdf]

Internal Controls Over Financial Operations
The Board did not take corrective action, as required by its policy, to address control weaknesses identified by the internal auditor's risk assessment report and did not ensure that the District's audit committee properly reviewed the report and presented it to the Board in a timely manner. Further, the Board did not act on the recommendations of a paid educational consultant and did not fulfill its responsibility to establish, communicate, and/or monitor the implementation of policies and procedures in key financial areas. The Board also allowed the District's finance consultant to use calculation methodologies that were not properly documented or contractually supported for $169,000 in separation payments made to four employees. The Board and District officials did not establish adequate written policies and procedures for the procurement process. Finally, the Board had no direct interaction with its appointed claims auditor, did not provide clear guidelines or training, and did not require formal claims audit reports. Lackawanna City School District[complete audit - pdf]

Financial Condition
District officials did not use available fund balance as a financing source in each year's budget, which led to excessive fund balances in the general fund, yet District officials continued to increase the tax levy. While District officials have transferred a portion of this excessive fund balance into various reserve funds, we found that the tax certiorari reserve was overfunded by $109,283, the retirement contributions reserve was overfunded by at least $80,000 and moneys in this reserve were improperly withdrawn and used for other purposes besides retirement contributions, the unemployment insurance reserve was not formally established, the unemployment insurance and the property loss reserves have had little to no activity, and a portion of the moneys in the employee benefit accrued liability reserve (EBALR) were set aside to pay ineligible payroll-related costs. LaFargeville Central School District[complete audit - pdf]

Financial Condition and Internal Controls Over the Procurement Process
We found that the District has at least $11 million in excess surplus funds that should be used to benefit taxpayers by paying one-time expenditures, reducing debt and or reducing the tax levy, in accordance with applicable statutory requirements. The District's budgetary practices have consistently resulted in operating surpluses that District officials have used to increase various reserve funds. The District also has not been using the debt service fund, which had a balance of $8.2 million at June 30, 2007. Had the District not engaged in these practices, real property taxes could have been substantially lower, since the Board would have been required to comply with the statutory limits for fund balance. We also found that the District did not follow its procurement policy and ensure that required bids or price quotations were obtained. Lancaster Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board and administrators placed too much reliance on their independent auditor's recommended adjustments to the accounting records without fully understanding the impact of those adjustments. Therefore, incorrect adjustments were made, which resulted in the Board and administrators believing that they had less than $20,000 fund balance in the general fund at June 30, 2008 when in fact, they had almost $1.7 million. This represents approximately 8 percent of the $21.9 million total appropriations for 2008-09 fiscal year and nearly twice the amount allowed by law. However, the Board and District officials were unaware of this and in fact, had instituted a spending freeze and were planning to make significant budget cuts. The District's fund balance was significantly understated because accrued liabilities ($1.5 million), compensated absences ($550,000) and reserves for encumbrances ($90,000) were overstated and the EBALR ($450,000) was understated. In addition, we found that District officials need to improve controls over the Treasurer's duties, purchasing and claims auditing. Lansing Central School District[complete audit - pdf]

Internal Controls Over Budgeting and Financial Operations
We found that the District has a history of poor budgeting practices. Estimates of revenues and expenditures have often been wrong. As a result, the District has incurred operating deficits of more than $6 million in 2005-06 and 2006-07 and expects to overspend the 2007-08 budget by more than $7 million. We also found that the District has been inappropriately using reserve funds to pay for general fund operations in a manner not allowed by law. Furthermore, of the four District maintained reserve funds totaling $23.8 million at June 30, 2007, one of these reserves is unnecessary, and the other three are overfunded and not used to pay related expenses. The District also made purchases that did not comply with District policies; paid for unearned administrative benefits and poorly documented overtime; and maintained weak controls over disbursements and IT operations. Levittown Union Free School District[complete audit - pdf]

Budget Review
Based on the results of our audit, we found the significant revenue and expenditure projections in the proposed budget to be reasonable. Liberty Central School District[complete audit - pdf]

Internal Controls Over Financial Operations
District officials have not segregated financial duties related to the payroll and cash receipt functions for the Business Manager/Treasurer. Additionally, the Business Manager/Treasurer has not adequately controlled access to and use of her signature. Finally, District officials have not implemented access controls to their computerized accounting system to ensure that individuals only have access to those applications that are needed to perform their duties. Lisbon Central School District[complete audit - pdf]

Internal Controls Over Cash Disbursements
We identified weaknesses in the internal controls over cash disbursements including a lack of segregation of duties for the Treasurer/payroll clerk and the Business Manager, and a lack of policies and procedures for cash disbursements. As a result, bank accounts were not being properly reconciled because the Treasurer/payroll clerk was able to misrepresent the outstanding check lists for bank reconciliations without the knowledge of the Board, District officials, or the external CPA. In addition, supporting records for time sheets were not required and supporting records were not used to verify the accuracy of the time reported as worked by substitute teachers and hourly employees. Furthermore, these employees were paid based on time sheets that reported the scheduled hours for the final three days of the payroll period, instead of actual hours worked, without a procedure to ensure that adjustments were made for subsequent absences or schedule changes. Based on the records provided, it appears that two employees were overpaid by a total of $1,419. Little Falls City School District[complete audit - pdf]

Cash Receipts
The Treasurer receives monies collected from the public and District staff that account for approximately $130,000 in collections annually. These payments most commonly come from facility use fees, bus use fees, tickets for athletic events, continuing education classes, and retiree health insurance payments. Not only does the Treasurer receives these payments, but she maintains custody of all unused receipt forms and books, records cash transactions in the accounting system, issues receipts to payees, and deposits the monies in the District's bank account. When performed by one individual, these duties are incompatible. However, our testing of receipts found no instances of fraud, waste, or abuse. Livonia Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board has neither established written policies and procedures over the payroll and fringe benefits process nor implemented proper controls to ensure that employees’ time and attendance records are properly maintained, and that separation payments are properly calculated. As a result, errors in employees’ accrued leave balances occurred without detection and separation payments were incorrectly calculated and paid. For example, the accrual records of all seven administrators that we reviewed had inaccurate sick or vacation leave balances, which, if converted into cash payments, may result in the overpayment of $58,431 or the underpayment of $7,678 in benefits to the administrators. In addition, the District’s purchasing policy does not require officials to solicit competitive proposals prior to issuing a contract with a professional service provider. The Board also did not adopt written policies addressing electronic banking transactions and District officials did not develop specific written procedures for wire transfers. Finally, District officials have not developed comprehensive policies and procedures to protect critical financial data. Long Beach Central School District[complete audit - pdf]

Internal Controls Over Cash Receipts and Disbursements
The Board has adopted policies for the duties of the Treasurer, signatures on checks and for the Treasurer's bond. However, the policies and procedures are inadequate because they do not provide sufficient guidance on internal controls over cash receipts and disbursements for District personnel to follow, such as for the segregation of duties and issuing receipts. In addition, user access rights are not granted based on position and level of responsibilities, and the Business Manager can transfer funds by phone, wire transfer debt payments by email and phone, and have user access rights changed by calling MORIC without the approval of another District official. Finally, special aid and debt service activity is not fully entered into the computerized accounting system in a timely manner, checks totaling $270,250 were not audited by the claims auditor, and payroll payments totaling $73,010 were not certified by the former Superintendent. Lyme Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
Although statute and regulation clearly indicate that an independent contractor cannot be a school officer, the Board appointed an independent contractor as Treasurer. The Treasurer did not supervise and control the use of her facsimile signature as required by the regulations of the NYS Commissioner of Education and District policy. The Board also did not authorize payments in lieu of health insurance to employees who opted out of family health insurance coverage but were still receiving individual health insurance coverage. Therefore, the District paid health insurance buyouts to 16 employees in 2007 and 17 in 2008, $56,345 and $62,655, respectively, while also providing them with individual health insurance coverage. Although the District is achieving a significant benefit by offering this option to its employees, the option of receiving individual coverage (as opposed to family coverage) and also receiving a payment in lieu of health insurance is not authorized in any of the District's employment agreements. Finally, controls over computer access privileges are not effective because several individuals have user access rights that are incompatible with their job functions. Lynbrook Union Free School District[complete audit - pdf]

Internal Controls Over Payroll
Internal controls over payroll are not appropriately designed and operating effectively to adequately safeguard District assets. There are 12 benefit agreements in place for non-union employees. However, the Board did not ensure that the agreements define the compensation guidelines and fringe benefits to which employees are entitled and the necessary documentation required to obtain certain fringe benefits. For example, we reviewed the applications filled out for seven employees who received payments in lieu of health insurance totaling $7,700 to determine if the applications included sufficient information to determine eligibility for payment. We found that the applications did not request, and the employees did not provide, information as to whether or not they had a spouse who had family insurance through his or her place of employment. Lyndonville Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The claims auditor position was not correctly established as an independent officer and the Board had not provided adequate oversight of the claims audit function. The claims auditor also held the position of Assistant Business Manager and bidding coordinator, responsible for soliciting bids and quotes for BOCES purchases, which is incompatible with the claims auditor position and is also prohibited per Education Law and the Regulations of the Commissioner of Education. Several Business Office clerks, who were under the supervision of the Treasurer, also audited and approved claims for payment when the claims auditor was absent. In addition, BOCES management did not adequately oversee the system of internal controls over cash receipts. The Treasurer receives cash and checks, records receipts in the computerized records, and prepares and makes deposits. BOCES officials did not independently review the Treasurer's work to mitigate this internal control weakness. Madison-Oneida Board of Cooperative Educational Services[complete audit - pdf]

Regional Information Center
Based on inquiries we made of the RIC management and our review of policies and procedures during our examination of technology services, the RIC provided to component (or cross-contracting) school districts, we concluded that, as of April 2, 2008, controls were adequately designed. Madison-Oneida BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Activities
Our audit identified nearly $6.7 million in funds that have been tied up due to accounting errors or in unnecessary reserves that the District could use to benefit the taxpayers. For example, we found that District officials made incorrect adjustments to the District's accounting records at the end of the year resulting in the Board and administrators believing that they had approximately $1.6 million of unreserved fund balance in the general fund at June 30, 2008 when in fact, they had over $5.3 million. The District also had a balance of nearly $1 million in the unemployment insurance reserve which was sufficient to pay for the District's average unemployment claims for over 100 years and District officials did not use the unemployment insurance reserve or their employee benefit accrued liability reserve (EBALR), with a balance of almost $2 million, to pay for appropriate reserve expenditures. In addition, the Treasurer's duties were not sufficiently segregated in relation to the cash receipt function, there was a lack of controls over the Treasurer's computerized signature and manual checks and the Board appointed a claims auditor who was also involved in the purchasing process. We also found that the District expended a total of $37,000 to pay health insurance premiums for two retirees after they were deceased. Finally, the Board and District officials did not establish adequate policies and procedures to effectively safeguard the District's computer systems and data. Maine-Endwell Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The District has reserved approximately $1.1 million more in its EBALR fund than its liability for compensated absences. Further, the District did not use the EBALR funds to pay employees for compensated leave benefits; instead, the District used general fund appropriations for these costs, and levied taxes to pay for them. We also found that the District's unreserved fund balance of $2,379,966 exceeded the legal limit of 4 percent of the ensuing year's budget by $639,398 at June 30, 2008. District officials told us this excess fund balance was intended to pay other post-employment benefit (OPEB) costs. However, since there is no legal authorization to reserve funds for OPEB expenditures, this amount is part of the District's unreserved fund balance. If the District's unreserved fund balance were recalculated to include the excess EBALR monies, the District's fund balance at June 30, 2008 would exceed the legal limit by $1.74 million. The District also paid five administrators a total of $226,714 for separation payments that were based on a collective bargaining agreement whose vague terms allowed administrators to determine their own method of calculating payment. The District paid the Treasurer $19,350 as an independent contractor although statute and regulation clearly indicate that an independent contractor cannot be a school officer. Finally, the District did not always comply with its procurement policy, which required obtaining requests for proposals (RFPs) when procuring professional services. Malverne Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board needs to improve its oversight of District operations. Three Board members, including the Board President, had not taken the required fiscal oversight training at the time of our audit. This does not set the proper "tone at the top," which contributed to the weaknesses we found in the District's internal controls over purchasing, claims processing, payroll, and information technology. District officials failed to comply with competitive bidding requirements and the District's own purchasing policies when procuring goods and services. District officials have not established policies or procedures for preparing and disbursing payrolls, or for maintaining time records. Finally, internal controls over information technology (IT) are not appropriately designed to adequately safeguard District assets. District officials have not developed formal IT security or disaster recovery plans. Marlboro Central School District [complete audit - pdf]

Independent Audit Services
The District followed appropriate policies and procedures when procuring audit services. However, we found areas where the CPA firm could have improved its audit approach and documentation. For example, we found instances of non-compliance with auditing standard requirements relating to the consideration of fraud. The standardized checklists that the CPA firm used did not contain the CPA's conclusions regarding the risk of fraud. We found no indication that the CPA firm documented an audit response to the risk of District management overriding controls, as mandated by auditing standards. Finally, the CPA firm did not properly report control deficiencies noted during the audit to the Board. Menands Union Free School District[complete audit - pdf]

Internal Controls Over Payroll and Fuel Card Purchases
We found that the District did not establish policies and procedures to guide employees in conducting their duties such as written preauthorization, documentation and approval of employee overtime. In addition, the District did not properly segregate duties in payroll, and District officials have not developed written procedures governing payments to employees who waive their right to participate in the District's health insurance plan. The Board has also not established policies and procedures that address controls over gasoline purchase cards. As a result, the District did not close an unused fuel purchase card account for over a year, even though the District made their fuel purchases from another vendor. While we found that all purchases were for legitimate District purposes, these weaknesses increase the risk that the District could incur unauthorized expenses. Merrick Union Free School District[complete audit - pdf]

Internal Controls Over Financial Operations
We were unable to determine whether the Board actually approved all the terms and conditions of a contract amendment provided to a prior Superintendent. As a result, the District may have inappropriately paid $34,582 to the prior Superintendent since his retirement. In addition, because District officials did not maintain adequate leave records for the prior Superintendent to provide supporting documentation for his 127 accumulated unused sick, personal, and vacation days, the District may have improperly paid him $31,750 for that leave time. Although, internal controls over purchasing appear to be appropriately designed, they are not operating effectively. The purchasing agent did not approve purchase orders for $2.5 million of District purchases. Also, District staff did not solicit competitive bids or written or verbal quotes for purchases totaling approximately $650,000. The Treasurer was performing inaccurate bank reconciliations, caused a total of approximately $3.1 million of errors within the accounting records, and did not submit cash and budget status reports to the Board in a timely manner. Finally, we found deficiencies in the District's compliance with fingerprinting procedures, the appointment of the internal auditor, and safeguarding of computerized data and assets. Middleburgh Central School District[complete audit - pdf]

Internal Controls Over Financial Activities
The District has accumulated approximately $12 million in fund balance and various reserve funds that could be used to benefit taxpayers by paying one-time expenditures, funding necessary reserves, reducing debt and/or reducing the tax levy. The District's unreserved and unappropriated general fund balance at June 30, 2008 totaled $11.7 million, or 6 percent of the appropriations for the 2008-09 fiscal year. Furthermore, an additional $19.3 million was held in reserve funds and at least $8 million of that total was in excess of amounts required to fund the liabilities associated with those reserves. In addition, District personnel did not consistently solicit competition when seeking to obtain professional services. We also found certain employees were overpaid and that payrolls were not properly certified. The District paid five employees $45,315 for separation payments that were greater than the amounts they were due per provisions of their collective bargaining agreements. Finally, District officials have not adequately restricted user access rights to the computerized financial system. Middle Country Central School District[complete audit - pdf]

Information Technology
We found that the Board has not effectively addressed the safeguarding of computerized data and assets by establishing adequate policies and procedures and monitoring their implementation. Specifically, the District has not adopted comprehensive policies and procedures relating to user access rights, passwords, computer usage, and access controls over the Treasurer's computerized signature disk. The Board also has not developed a formal disaster recovery plan or physically secured its computer assets. While our examination did not identify any significant occurrences of unauthorized activity, the IT weaknesses identified increase the risk that sensitive or critical data may be lost or compromised, or that systems could be damaged or disrupted. Milford Central School District[complete audit - pdf]

Regional Information Center
Based on inquiries we made of the RIC management and our review of policies and procedures during our examination of technology services the RIC provided to component (or cross-contracting) school districts, we concluded that, as of November 13, 2008, controls were adequately designed. Monroe 1 BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board has not adopted adequate procedures or a job description for the claims audit position. Consequently, the claims auditor did not report directly to the Board, review purchase orders or printed checks to verify whether amounts paid to vendors did not exceed bid or quote thresholds and were in accordance with awarded bid prices or quotes. Due to a lack of guidance, the claims auditor also authorized payments to three vendors totaling $117,726 that were improperly itemized. District officials also did not obtain competitive bids for two of the nine purchases we reviewed totaling $34,727 or competitive quotes for 14 of 21 purchases reviewed totaling $85,241. District officials awarded a bid to one vendor, who was paid $25,600, even though his bid response did not include costs for all items in the bid. Finally, internal controls over hiring practices need to be improved. If the District had followed Education Law, Board policy and past District hiring practices, the District could have saved approximately $190,000. Monroe-Woodbury Central School District[complete audit - pdf]

Budget Review
Based on the results of our audit, we found the significant revenue and expenditure projections in the tentative budget to be reasonable. However, we recommend that District officials closely monitor the use of fund balance to ensure that action is taken, if necessary, to identify other funding sources that can be used if fund balance is no longer available to fund District operations. Monroe-Woodbury Central School District[complete audit - pdf]

Internal Controls Over Non-Payroll Cash Disbursements
Internal controls over non-payroll cash disbursements were not adequately designed due to a lack of segregation of duties and oversight and the Treasurer's failure to control the check signing process. Although our testing did not disclose any discrepancies, the failure to segregate duties, and the lack of management oversight, increases the risk that unauthorized transactions can be initiated and not be detected. Morristown Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
We found that District officials did not seek competition for services provided by seven vendors, who provided services such as electrical, cleaning, advertising, uniform maintenance, chair rental, public relations and plumbing and were paid a total of $365,143. District officials did not establish an adequate control environment and did not design or implement internal controls over gasoline credit cards, store credit cards and lines of credit. As a result, the District paid approximately $253,596 for purchases which may not all have been for legitimate District purposes. Finally, we found that the District did not establish sufficient security over its information technology system. Mount Pleasant Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
District management did not establish adequate internal controls over purchasing. The Chief Financial Officer did not ensure that available appropriations existed before authorizing purchases, did not make budget transfers timely, did not encumber funds, and did not include all recurring expenditures in the budget. District officials also did not implement Board policies and obtain requests for proposals (RFPs) and quotes when making purchases. Finally, internal controls over the District's information technology (IT) system were not appropriately designed or operating effectively. Mount Pleasant Cottage Union Free School District[complete audit - pdf]

Internal Controls Over Claims Processing and Construction Project Bidding
We found that internal controls over the claims audit function were not appropriately designed and operating effectively. Though the Board adopted a policy relative to the claims auditor, the policy was not sufficient to ensure an adequate audit of claims. As a result, claims were paid prior to being audited. The Board's policies and procedures are vague concerning claims processing and there is no job description for the claims auditor position to outline the duties. As a result, the claims auditor was not performing key functions necessary to effectively audit claims. Finally, we reviewed the purchases related to the District's construction project for the period of July 1, 2006 through April 6, 2009 and found that multiple contractors had payments in excess of $20,000, the threshold which would require the District to seek bids for these services. Mt. Pleasant Blythedale Union Free School District[complete audit - pdf]

Regional Information Center
Based on inquiries we made of the RIC management and our review of policies and procedures during our examination of technology services the RIC provided to component (or cross-contracting) school districts, we concluded that, as of December 5, 2008, controls are adequately designed. Nassau BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The Board has not adopted formal policies and procedures related to wire transfers and the informal procedures used by management were not always followed. As a result, 53 of 72 wire transfers tested, totaling $5.3 million were either not approved or not approved in a timely manner. Finally, the District needs to improve controls over its information technology system. The Board has not adopted a comprehensive computer security policy. In addition, computer equipment and data were not adequately protected from environmental factors such as fire and excessive temperature. The District's disaster recovery plan has also not been tested nor has it been distributed to all responsible parties. New Hyde Park-Garden City Park Union Free School District[complete audit - pdf]

Internal Controls Over Financial Condition
We found that District officials did not prepare reasonable budgets for the 2004-05 through the 2007-08 fiscal years. District officials consistently overestimated expenditures and underestimated revenues. As a result of these practices, the District underestimated revenues by $6.2 million and overestimated expenditures by $17.8 million during this period, which generated significant operating surpluses. As a result, we estimate that the District has approximately $8 million in excess funds that could be used to benefit taxpayers by paying one-time expenditures, reducing debt and/or reducing the tax levy, in accordance with applicable statutory requirements. Niagara Wheatfield Central School District[complete audit - pdf]

Regional Information Center
Our previous examination report of the RIC which was dated January 26, 2007 indicated that BOCES officials had not developed a written disaster recovery plan. Since our last report, department level disaster recovery plans have been developed, a Disaster Recovery Coordinator responsible for evaluating the department plans has been hired and RIC officials began the process of hiring an outside vendor to further assist with disaster recovery planning. We encourage RIC officials to continue the progress they have made toward developing a comprehensive, entity-wide disaster recovery plan. Northeastern (Capital Region) BOCES[complete audit - pdf]

Financial Condition
District financial records indicate that from July 1, 2004 to June 30, 2007, general fund revenues were overestimated in total by more than $1.5 million. In addition, the District relied on the appropriation of over $1.2 million of fund balance from July 1, 2002 to June 30, 2006 to fund expenditures. Therefore, the District's unreserved fund balance declined from $851,000 on July 1, 2004 to a deficit of $346,000 as of June 30, 2006. By June 30, 2008, the District's financial condition has shown some improvement, but the fund balance amount was still low. In addition, the school lunch fund has had a fund balance deficit for the last six years, fluctuating from a $33,105 deficit at June 30, 2003 to a $25,114 deficit at June 30, 2008, despite the general fund subsidizing the school lunch fund. Norwood-Norfolk Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Superintendent and Board routinely overestimated operating expenditures and repeatedly raised the amount of tax levied in order to meet these unrealistic budgetary estimates. These tax increases contributed to ongoing operating surpluses for most of the fiscal years we reviewed, even though approximately $1 million of the District's unreserved fund balance was appropriated annually as a budgetary funding source. Further, although the Board reserved money for certain expenses, such as retirement contributions and unemployment insurance reimbursements to the State, the Board consistently budgeted for these same expenses to be paid from the general fund. These budgetary practices also contributed to the cumulative increase in the property tax levy of $377,647 (more than 10 percent) over the three fiscal years 2004-05 through 2006-07. In addition, the Board and District officials did not establish appropriate controls over wire transfers and journal entries by segregating the key duties of initiating, authorizing, confirming, and posting transactions. District officials also did not ensure that Transportation Department expenditures were adequately authorized or monitored, did not follow District policies for awarding bids, did not secure a written vendor agreement, and did not document an investigation of unsupported vendor claims as required by policy. Finally, the Board and District officials need to strengthen controls over the District's computerized financial system. North Collins Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials paid three vendors $186,901 without soliciting competitive bids and paid $144,269 to two professional service providers without seeking competitive proposals or quotations. District officials also contracted with a vendor to provide technology-related professional services for $204,000. They made additional equipment purchases totaling $75,802 from the vendor not covered under the agreement which were not competitively bid. In addition, due to the failure to maintain asset disposition records for laptops, District officials were unable to locate three of 10 laptops with a combined value of $3,646. Finally, we found that controls over the District's check-signing process and access to the computerized financial system were not adequate. North Salem Central School District [complete audit - pdf]

Internal Controls Over Selected Financial Activities
For a seven year period, the District's general fund operations have resulted in operating surpluses totaling $2.9 million, primarily due to the over estimation of expenditures. After allocating a portion of these surpluses to fund lawful reserve funds, District officials transferred the remaining amounts in excess of statutory fund balance limits into a capital reserve, accounted for as part of a debt service fund, to help finance the cost of unspecified future capital projects. However, the Board did not properly establish the capital reserve pursuant to public notice and voter approval as required by Education Law, and there are no provisions in NYS statutes for transferring surplus moneys from the general fund in this manner. The use of the capital reserve fund to shield $3.25 million of accumulated general fund operating surpluses plus interest from the limits of the Law is inappropriate. Internal controls over payroll are not appropriately designed and operating effectively. In addition, the Treasurer does not control the use of his facsimile signature. Finally, District management has not provided for an effective certification of payrolls, an independent review of cancelled checks, and periodic reviews of available audit logs for the payroll system. North Syracuse School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials did not ensure that the Department of Community Activities' (DOCA) programs were included in the annual budget and reported accurately, the functions of collecting, recording and depositing cash were segregated, and that DOCA claims were properly authorized. In addition, we found that District officials did not always adhere to the District's purchasing policy with regard to seeking competitors for professional services. Finally, District officials did not always enforce the Board-adopted fuel credit card policy. They did not require employees to submit supporting documentation and did not have adequate procedures to monitor fuel use, such as maintaining vehicle logs and analyzing vehicle miles per gallon (MPG) to determine if fuel purchases were reasonable. Oceanside Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The Treasurer did not directly supervise the signature process and checks were not subject to independent review prior to distribution. In addition, while the Board appointed an Extra-classroom Fund Central Treasurer and faculty advisors, certain extra-classroom activities did not have student officers. Therefore, recordkeeping duties, including a cash ledger, which should have been prepared by student treasurers, were not being maintained. District officials also did not properly oversee the billing and collection of facility rental fees. Instead, a clerk billed, collected and recorded charges for facility rentals. We also found that both the clerk and the Superintendent made adjustments to certain billings based upon past practices. For example, the Superintendent instructed the clerk to reduce the bill for one large event in March 2007 by approximately $3,800. Lastly, we referred the questionable enrollment of the District's physician to ERS. ERS subsequently informed us that the District has determined that the school physician was an independent contractor. Previously reported employee service credit will be removed and ERS will refund past employer contributions back to the District. Ogdensburg City School District[complete audit - pdf]

Internal Controls Over Information Technology and Purchasing
The District did not develop comprehensive information technology risk assessments and disaster recovery plans, did not properly secure all of its information technology hardware, did not properly separate user access and administrative functions within applications, and did not require proper computer password and access protocols. The District also did not follow General Municipal Law or its own procedures because it did not competitively bid three commodities totaling $103,100. If the District had used the State-awarded contract to purchase its fuel, it could have saved over $1,200 (eight percent). The District did not obtain requests for proposals (RFPs) for three vendors, who received a total of $376,000. Olean City School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
We found that BOCES officials improperly set aside monies collected from component school districts for post-retirement health insurance costs and for future potential capital projects. Therefore, as of June 30, 2008, BOCES had approximately $6.0 million in district funds set aside for these two purposes that are not authorized by law. Subsequent to the completion of our fieldwork, the capital budget monies totaling approximately $2.1 million were returned to the districts on June 24, 2009. We also determined that BOCES officials have not established adequate internal controls over non-payroll cash disbursements and over cash receipts. Oneida-Herkimer-Madison BOCES[complete audit - pdf]

Internal Controls Over Financial Operations and User Access Rights
We identified significant internal control weaknesses in regard to health insurance benefits and user access rights. The Business Official has not ensured that health insurance billings and collections duties are properly segregated. The Treasurer also does not ensure that amounts billed are accurate and supported by proper documentation or have an adequate process to confirm the eligibility of retirees and spouses. As a result, the Treasurer did not change the billing method for certain retirees to reflect recent contract changes, and at least four individuals did not pay their full premium, resulting in uncollected revenues of about $6,100. The District also paid $5,373 in health insurance premiums for a deceased retiree. Finally, user access rights in the business software were not assigned based on job duties. Oneonta Central School District[complete audit - pdf]

Reserve Funds and Claims Processing
During the fiscal year ended June 30, 2008, BOCES retained approximately $1 million of district moneys to fund BOCES reserves without clearly disclosing this information to the districts. In addition, one BOCES reserve, the employee benefit and accrued liability reserve, was overfunded by $2,298,934 because BOCES had accumulated funds in this reserve to cover non-permissible costs for health insurance premiums for retirees. In addition, BOCES established the workers' compensation reserve without legal authority. This reserve had a balance totaling approximately $420,000 as of June 30, 2008. BOCES did not have a written, Board-approved job description for the claims auditor position. Finally, the Manager of Business Affairs supervised the claims auditor and performed his performance evaluations, which compromises the claims auditor's independence. Onondaga-Cortland-Madison BOCES[complete audit - pdf]

Reserve Funds and Internal Controls Over the Computerized Financial System
We reviewed the establishment, funding methods, and fund balances of the BOCES' reserves for the two fiscal years ending June 30, 2006 and June 30, 2007. One reserve fund was not properly established and another was established without legal authority. Further, BOCES management did not get Board approval to allocate surplus funds to the reserves, did not properly report such allocations to the school districts, and maintained reserve fund balances that, in total, held at least $571,000 more than allowable. Finally, internal controls over BOCES' computerized financial system were not appropriately designed during our audit period; two Business Office employees with financial responsibilities had powerful system-level administrative access rights which were not needed for their job duties. Ontario-Seneca-Yates-Cayuga-Wayne BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Activities
BOCES has not properly estimated certain budget appropriations and has used the resulting surplus to fund a trust account and various reserves. We determined that BOCES improperly restricts $7.7 million in the trust account. Furthermore, BOCES did not fund reserves transparently, did not use the $1.5 million Unemployment Insurance Reserve in a fiscally prudent manner, and improperly funded the Career and Technology Education (CTE) Equipment Reserve. Had these actions not occurred, BOCES would have had to return more than $7.7 million to its component districts. In addition, BOCES officials do not routinely comply with the purchasing policy when obtaining services. We tested payments made to 17 service providers and determined that BOCES paid 15 providers $759,377 without seeking request for proposals or competitive quotes. Orleans Niagara BOCES[complete audit - pdf]

Financial Operations
BOCES personnel did not fully comply with Education Law, and BOCES' policy, to ensure fingerprint-supported criminal history background checks were performed and filed with the New York State Education Department's (SED) Office of School Personnel Review and Accountability (OSPRA) for employees who had direct contact with students. We also found that two vendors had access to and the ability to withdraw funds directly from BOCES' bank accounts. Finally, the Business Official did not develop comprehensive operational procedures to ensure that cash receipts were accounted for properly. Records maintained were not sufficient, duplicate press-numbered receipts were not accounted for properly, cash receipt transactions were not reviewed, and monies were not deposited in a timely manner and intact. Otsego Northern Catskills BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials improperly established a reserve in the District’s trust and agency fund for other post-employment benefits (OPEB) totaling nearly $6.8 million. School districts currently have no legal authority to maintain such a reserve. Also, the District lacked a long-term plan for the use of seven of the 10 reserves held in the general fund. Furthermore, five of these reserves were overfunded by approximately $2.5 million as of June 30, 2008. In addition, the District potentially lost approximately $174,993 in Medicaid reimbursements for the period July 1, 2006, to February 29, 2008, because it lacked policies and procedures to define the responsibilities for data collection and documentation, and submitting Medicaid claims for reimbursement. Palmyra-Macedon Central School District[complete audit - pdf]

Internal Controls Over Cash Receipts
Internal controls over the cash receipts process are not appropriately designed or operating effectively. The Board has not adopted written policies for cash receipts, segregated critical duties so that one individual does not control all phases of a transaction, or properly safeguarded District assets. For example, we found that the after-school program manager and the extra-classroom activity treasurer do not routinely deposit monies received intact. Because of these weaknesses, the risk is increased that cash receipts could be misappropriated without detection. Panama Central School District[complete audit - pdf]

Internal Controls Over Payroll and Computerized Financial Application Systems
District officials need to segregate critical duties more carefully. We found that officials did not properly segregate duties in the payroll area and computerized financial application system. The District did not properly segregate the payroll clerk's duties, and the Treasurer did not maintain control over her electronic signature. In addition, the Business Manager is the administrator for the District's financial application system and has the ability to add and delete users, change user access privileges and essentially control all aspects of the application. We did not find any unauthorized transactions through our audit testing. Parishville-Hopkinton Central School District[complete audit - pdf]

Budget Review
We have reviewed the 2009-10 tentative budget for the Patchogue-Medford Union Free School District and found that the budgeted estimated revenues and appropriations appear reasonable. Patchogue-Medford Union Free School District[complete audit - pdf]

Internal Controls Over the Procurement of Professional Services
The Board has adopted a purchasing policy which states that alternate proposals, written or verbal quotations or other form of competition shall be used to secure professional services. However, District officials have not implemented the policy. We reviewed the procurement procedures and contracts for 15 professional service providers who received a total of $585,220 during our audit period. We found that the services of all 15 were procured without the use of RFPs or any other form of competition; for example, architectural services ($177,892), attorney services ($121,811), physical therapy services ($21,331), and external audit services ($33,100). Pearl River Union Free School District[complete audit - pdf]

Internal Controls Over Cash Receipts
Internal controls over District cash receipts were not appropriately designed or operating effectively. The District has not adopted written policies governing cash receipts, provided job descriptions to employees, or segregated critical duties. As a result, the Treasurer did not make deposits intact or in a timely manner. Furthermore, employees assigned to audit Extra Classroom Activities were not provided guidance on their duties and over $2,600 of Extra Classroom Activity funds was unaccounted for, or may have been stolen or used for other than appropriate District purposes. Pembroke Central School District[complete audit - pdf]

Financial Condition and Information Technology
District officials routinely overestimated appropriations and/or underestimated revenues, which caused the District to have surplus unreserved fund balance that was above the amount allowed by law. District officials used operating surpluses to increase various reserve funds, while continuing to increase the property tax levy by approximately 15 percent during the past six years (2002 to 2008). Consequently, the District has over-funded the EBALR, unemployment insurance reserve fund, and the retirement contribution reserve fund by a total of more than $3 million. We also found that the District was charging unauthorized expenditures to its employee benefit accrued liability reserve (EBALR) fund, had transferred excessive moneys to the unemployment insurance reserve fund, and was not using the moneys in the EBALR and retirement contribution reserve funds as is legally intended. Phelps-Clifton Springs Central School District[complete audit - pdf]

Financial Condition
District officials consistently underestimated revenues during our audit period, which resulted in excess fund balance. As a result, the District's unreserved, unappropriated fund balance was in excess of the statutory limits for the 2003-04 through 2007-08 fiscal years. The unreserved, unappropriated fund balance in the general fund at June 30, 2008 totaled $1,223,133, which represented 4.7 percent of the $26.1 million budgeted appropriations for fiscal year 2008-09. The District had also retained funds in excess of what it was legally allowed to retain for each of the previous four years. The unreserved, unappropriated fund balance exceeded the legal limit ranging from $490,228 as of June 30, 2004 to $176,844 as of June 30, 2008. Potsdam Central School District[complete audit - pdf]

Internal Controls Over Claims Processing and Information Technology
BOCES officials did not always provide proper oversight to ensure that payments on professional services contracts corresponded with contract rates. In addition, the claims auditor could not always verify whether payments were made in accordance with contract terms because the contracts were not routinely attached to the voucher packets. Finally, the Board did not require the claims auditor to report to the Board as required by Education Law. Additionally, although the BOCES has an acceptable computer use policy in place and procedures for exercising the policy, BOCES officials are not monitoring or enforcing the policy or procedures. We found five downloaded games, two copies of an instant messenger program, and a program that allowed unauthorized downloads on BOCES network computers that were in violation of the acceptable use policy. Finally, BOCES officials have not established sufficient policies and written procedures over the physical security of the server room. Putnam - Northern Westchester BOCES[complete audit - pdf]

Internal Controls Over Financial Operations
The Board has not designed adequate internal controls over the District's financial operations, specifically regarding management oversight and segregation of duties within the Business Office. The Board did not comply with Education Law regarding fiscal training for Board members and did not ensure that required financial reports were prepared and filed. The Board's lack of guidance resulted in a lack of segregation of duties without compensating controls over the investment of District moneys. Raquette Lake Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The District has properly established reserve funds, but the balance retained in the employee benefit accrued liability reserve was not calculated properly. In addition, the liability and insurance reserves have had no activity since their creation and therefore, they are not necessary. We calculated that the District has overfunded these three reserves by approximately $1.28 million. Had these moneys been reported as general fund unreserved fund balance, real property taxes would necessarily have been reduced, since the Board would have been required to comply with the statutory limits for fund balance. In addition, the Board and District officials did not establish adequate polices and procedures to effectively safeguard the District's computer systems and data. Red Creek Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
BOCES officials had not established policies and procedures to adequately safeguard the IT system's equipment and data. We found that BOCES has not developed a disaster recovery plan. In addition, BOCES does not control local administrator rights, review financial management system audit logs, or have adequate physical security over its IT assets. Finally, we examined a sample of 142 claims totaling $786,238 and, except for minor deficiencies that we discussed with BOCES officials, we found that claims contained sufficient documentation to support that they were valid and necessary BOCES expenditures. Rensselaer-Columbia-Greene Board of Cooperative Educational Services[complete audit - pdf]

Internal Controls Over the Timekeeping System
The District spent more than $7,000 to purchase the electronic timekeeping system. However, it failed to implement procedures requiring the system be used to ensure that employees are only compensated and receive benefits for the hours they are expected to work. The inconsistent use of the timekeeping system, the ability of the payroll clerk to adjust records without documented authorization, and the lack of approval of time worked by department supervisors, resulted in overpayments since actual hours worked, as documented by the timekeeping system, did not support the amount of compensation paid. Ripley Central School District[complete audit - pdf]

Internal Control Over Payroll
Although District officials have adopted payroll policies and procedures, we found opportunities for improvement in the areas of segregation of duties, review of salary data input, certification of payroll, and the calculation and review of separation payments. These weaknesses resulted in minor errors that were discussed with District officials. Rocky Point Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations and Cost Savings
The District reported an unreserved, unappropriated general fund balance at June 30, 2008 of $5,400,270, which was 9.14 percent of the District's 2008-09 budgeted appropriations, and therefore exceeded the 4 percent allowed by law. In addition, the District reported a liability for retiree health insurance even though there was no liability to report, and a significant portion of fund balance was reported as reserved for compensated absences even though the Board did not establish a reserve for that purpose. If these liabilities were not accrued and this fund balance was not reserved, the unreserved, unappropriated general fund balance would have been $8,528,827 or 14.44 percent of the District's 2008-09 budgeted appropriations. We also determined that the District could save, on average, $40,000 annually by printing checks internally, rather than outsourcing this function. The Board needs to improve controls over the claims audit process. Finally, Education Law requires each Board member to complete a minimum of six hours of training on the financial oversight, accountability and fiduciary responsibilities of Board members within the first year of his or her term. Rondout Valley Central School District[complete audit - pdf]

Real Time Fiscal Monitoring
At the completion of the first quarter of the 2009-10 fiscal year, the District's spending has generally been within the limits established by the Board in its enacted budget. District officials have made significant progress in the use of the encumbrance system to monitor expenses. The District encumbered 90 percent of unexpended personal service cost appropriations and 83 percent of other than personal service appropriations as of September 30, 2009. However, we identified several areas of concern for District officials to address. The District continues to over-expend various budget line codes and, in the first quarter, has over-expended budget codes by a significantly larger amount than in the previous fiscal year. Additionally, District employees processed three budget transfers totaling $2.8 million without Board approval in violation of District policy. Roosevelt Union Free School District[complete audit - pdf]

Internal Controls Over Claims Processing
In order to reduce the amount of property taxes for the 2008-09 year, the District appropriated $2 million from fund balance. The appropriation of fund balance in an adopted budget results in a planned operating deficit. Based on our analysis of the District's general fund revenues and expenditures reported at December 31, 2008, we determined that the District is on track to exceed its revenue projection and to stay within its budgeted expenditure limits. If this trend continues, the District could end the year with an operating deficit of only $800,000, or about $1.2 million less than planned. District officials are still charging encumbrances and expenses against budget line codes with no budgeted appropriations. As a result, 87 account codes appear to be over-expended by approximately $11.5 million. Finally, while the District received $6 million in AIG funds, it has created only four budget account codes earmarked for specific academic improvement purposes with expenses totaling $1.2 million and encumbrances totaling $347,458. Roosevelt Union Free School District - Second Quarter Report on the 2008-09 Budget[complete audit - pdf]

Third Quarter Report on the 2008-09 Budget
Based on our analysis of the District's general fund revenues and expenditures reported as of March 31, 2009, we determined that the District is on track to exceed its revenue projection and to stay within its budgeted expenditure limits. If this trend continues, the District could end the year with an operating deficit of approximately $2.2 million, which will result in the District using about $5.8 million less fund balance than planned. Roosevelt Union Free School District[complete audit - pdf]

Fourth Quarter 2008-09 Budget Review
The District has a potential operating surplus of approximately $6.6 million for the year ending June 30, 2009. If this surplus is realized, the District will end the 2008-09 fiscal year with a projected accumulated fund balance of $21.1 million. This amount includes approximately $3 million of restricted funds maintained in an employee benefit accrued liability reserve (EBALR) fund, leaving the District with approximately $18.1 million in unrestricted, unappropriated fund balance. District officials intend to reduce this available fund balance by approximately $5.6 million by appropriating and encumbering monies to finance expenditures in the 2009-10 fiscal year budget and by designating unused AIG funds for academic improvement expenditures. Furthermore, the available fund balance may be further decreased by up to $4 million if the Board funds additional reserves which it approved on July 1, 2009. The net effect of these plans would leave the District with an unreserved, unappropriated fund balance of approximately $8.6 million as of June 30, 2009. Roosevelt Union Free School District[complete audit - pdf]

Internal Controls Over Payroll and Purchasing
We found that the Board has not adopted an overtime policy, and the Director of Buildings and Grounds has not established written procedures that provide adequate oversight of overtime work for his department. Because of the District's poor recordkeeping, District officials do not have adequate assurance that the total amount of overtime paid was accurate and necessary. In fact, we found questionable overtime payments totaling $2,899 that the District made to a head custodian. We also found that the District awarded 13 professional service contracts totaling approximately $960,000 during our audit period without using a request for proposals (RFP) process or other forms of competition. Finally, the District entered into six purchase and public works contracts totaling $250,040 without using competitive bidding, as required by General Municipal Law (GML). Rye City School District[complete audit - pdf]

Internal Controls Over Criminal Background Checks and Procurement of Professional Services
District officials did not establish adequate controls over the performance of criminal background checks. Consequently, background checks were not performed for 17 of 22 independent contractors who had direct contact with students. The independent contractors provided services such as special education services, speech therapy, occupational therapy, and psychology. District officials also did not establish adequate controls over the procurement of professional services. As a result, the District retained the services of 23 professional service vendors without requesting competitive proposals or other forms of competition and paid these vendors $461,419 during the audit period. Rye Neck Union Free School District[complete audit - pdf]

Internal Controls Over Claims Processing
We identified internal control weaknesses in the District's operations relating to the function of the claims auditor and her duties which could lead to errors or irregularities occurring and not being detected. During the 2006-07 fiscal year, the claims auditor was a Board member and as such, was ineligible to be the District's claims auditor. She also had no formal training that would allow her to effectively execute her duties as the claims auditor. We also found that the Treasurer paid 30 claims totaling $230,475 without approval from the claims auditor. Sackets Harbor Central School District[complete audit - pdf]

Internal Controls Over Payroll
We identified weaknesses in internal controls over the District's payroll process. The Board has not established an internal control system that provides for an adequate segregation of duties or management oversight for payroll processing and accounting for leave time accruals. As a result, five employees were overpaid by $23,533 for tutoring services and errors in the accounting for 276.25 days of leave time with a value of $68,300 have occurred without being detected by District officials. Salmon River Central School District[complete audit - pdf]

Employee Benefit Accrued Liability Reserve
The Board established the EBALR in February 2005 using $2.1 million of unappropriated fund balance. General Municipal Law authorizes school districts to create an EBALR to make cash payments for the value of accrued but unused sick leave, holiday leave, vacation time, and any other forms of payment for accrued leave time due to employees upon separation. Although District officials paid $356,446 for compensated absences during the 2005-06 fiscal year, these expenses were paid for from the general fund and not from the EBALR. In June 2006, after performing an analysis of the actual liability for compensated absences, District officials added an additional $7.1 million to the reserve. This raised the total to $9.2 million, as of June 30, 2007, which exceeded the $6 million liability for compensated absences. As a result, the EBALR was over funded by as much as $3.2 million. In addition, District officials improperly credited more than $750,000 in net interest earned by the EBALR to the general fund. Sayville Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The former Head Utility Worker received over $50,000 in overtime compensation for duties attributable to facilities management and energy management during the 2007-08 fiscal year. However, his approved time sheets did not clearly state the overtime hours that were allocated to each responsibility, and the District did not have additional supporting documentation detailing the duties that he performed during these hours. In addition, employees made clerical errors when calculating 12 payroll payments, which resulted in incorrect payments totaling $2,373. We also found weaknesses in the District's internal controls over separation payments, resulting in questionable payments to employees totaling $26,026. We also found weaknesses in the District's claims audit process and internal audit function. Finally, District officials have not established formal policies or procedures to limit users' access within the financial software system and do not sufficiently use audit logs or change reports to monitor the system for inappropriate access or unauthorized changes to the financial software. Schenectady City School District[complete audit - pdf]

Budget Review
Based on the results of our audit, we found that the budgeted estimated revenues and appropriations appear reasonable. However, we found that the District's appropriation of fund balance to finance operating expenditures is a practice that the Board of Education should monitor closely to avoid depleting this resource. Schenectady City School District[complete audit - pdf]

Financial Operations
The Board has not sufficiently addressed the safeguarding of computerized data and assets by establishing adequate policies and procedures. Specifically, the District has not adopted comprehensive policies and procedures relating to acceptable computer use for non-teaching staff, user access rights to the financial software, and passwords. The Board also has not developed a formal disaster recovery plan or adequate data back-up procedures to protect the District from the potential loss of data. In addition, the Business Manager has failed to ensure that all phases of payroll and the cash receipts functions are properly segregated or provide for sufficient compensating controls. Sharon Springs Central School District[complete audit - pdf]

Internal Controls Over Payroll Expenditures and Financial Condition
District officials have not established written policies or procedures to guide the payroll process and did not monitor payroll expenditures to ensure that they were made in compliance with authorized contracts and salary agreements. Due in part to this lack of oversight, the District paid almost $31,000 in unauthorized salary and benefits. In addition, the Board has not adopted realistic budgets and has not addressed excessive fund balance in the general fund. As of June 30, 2007, the unreserved, unappropriated general fund balance totaled $795,197. This amount was more than 10 percent of the following year's appropriations, or more than three times the amount allowed by law. In addition, as of June 30, 2007 the District reported $405,952 in two of its reserves, while related benefit payments were made from the general fund rather than utilizing the reserves to fund these costs. Sherman Central School District[complete audit - pdf]

Internal Controls Over Select Financial Activities
District officials have neither established appropriate policies to adequately segregate the Treasurer's duties nor have they developed compensating controls to mitigate this incompatibility, such as a routine review of the Treasurer's work by another employee. The District does not have written policies or procedures relating to the approval of separation payments. As a result, District officials paid a former custodial supervisor and a former custodian separation payments totaling $10,847 that were not authorized by the Board and to which they may not have been entitled. We also found that the claims auditor's duties are not adequately segregated from the business operations and purchasing functions. Finally, the Board did not effectively address the safeguarding of computer data by establishing appropriate control policies and procedures. Skaneateles Central School District[complete audit - pdf]

Internal Controls Over Fuel Inventories
We found that District officials had not developed comprehensive internal control policies that described the duties that District personnel must follow, the records that personnel must maintain, and the procedures that personnel must perform to achieve adequate safeguards for the District's fuel inventories. As a result, fuel inventories were improperly used. District officials informed us that they terminated the employment of the former head mechanic at the end of the 2007-08 fiscal year when they discovered that he was misappropriating fuel. The District was unable to determine the amount of fuel that was misappropriated due to the condition of the records. Southampton Union Free School District[complete audit - pdf]

Internal Controls Over Claims Processing
The BOCES claims audit function is not operating effectively. Although, the Board appointed a claims auditor to act on its behalf to audit and approve claims, the Board did not establish policies and procedures for the claims auditor to follow. As a result, the Treasurer is paying claims prior to the claims auditor performing a proper audit. Because the procedures for auditing claims are not adequate, there is a heightened risk that BOCES officials could make inappropriate payments to vendors or employees. Southern Westchester BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board has not adequately monitored the District's financial condition, resulting in the June 30, 2007 unreserved, unappropriated fund balance of approximately $1.3 million representing 5.6 percent of the ensuing year's budget, or nearly twice the legal limit that a school district is allowed to retain. In addition, the District has established various reserves, which continue to increase; however, District officials did not demonstrate the need for the balances maintained. In addition, the minutes of the Board's proceedings did not clearly identify the Board's authorization of certain employee benefits. In addition to salaries, certain employees were paid for unused leave time, in the amount of $20,414, without Board authorization. In addition, the District does not have a process for tracking employee attendance and there is no signature from the employee or a manager attesting to the time worked. Further, there is no procedure in place to account for leave time usage and balances. Southwestern Central School District[complete audit - pdf]

Budget Review
Based on the results of our audit, except as noted, we found the significant revenue and expenditure projections in the tentative budget to be reasonable. The District projects that its fund balance will be $10.9 million at June 30, 2009, about $6.7 million more than the legal limit. The District should use its surplus fund balance to benefit taxpayers and ensure its fund balance does not exceed 4 percent of the 2009-10 fiscal year budget. The District also issued a $3 million bond anticipation note in October 2008 without prior notice to the State Comptroller, as required by law. Further, the District has not submitted required quarterly reports to the State Comptroller in a timely fashion. South Country Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
We found that three of the seven Board members who served during the 2006-07 and 2007-08 fiscal years did not complete the required six hours of training on fiscal oversight, accountability, and fiduciary responsibilities within the first year of their election. In addition, District officials informed us that the former Benefits Administrator did not properly review and monitor life insurance premium payments for the Superintendent and four Assistant Superintendents. As a result, the District paid $66,609 in premiums for six split-dollar life insurance policies with face values totaling $2.8 million, which exceeded the coverage amounts allowed in their contracts by a total of $1.1 million. District officials did not always follow the Board's purchasing policies and solicit competition when required. Furthermore, the Board does not require District officials to solicit competition when procuring professional services and did not always have written agreements with professionals. Lastly, although District officials developed policies and procedures to protect critical financial data, the policies do not address user access accounts and audit logs. South Huntington Union Free School District[complete audit - pdf]

Internal Controls Over Financial Operations
The Trustee did not properly monitor and oversee the work of the Treasurer and controls were not established to ensure the Treasurer properly accounted for all District moneys. Consequently, the Treasurer did not maintain sufficient accounting records, thus preventing her from keeping a running balance of cash and performing bank reconciliations. In addition, the Treasurer did not prepare financial reports for the Trustee, and neither the Trustee, nor the Treasurer, could identify the source of one deposit totaling $1,428. In addition, all 46 checks issued during the audit period, totaling $804,440, had no indication that the supporting documentation was properly audited and approved, nor did they have the dual signatures of the Trustee and Treasurer as required by the New York State Commissioner of Education. South Mountain Hickory Common School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
Because the Board did not communicate its expectations to the claims auditor and deputy claims auditor, the District's claims audit process is deficient and applied inconsistently. In addition, the Treasurer did not control her facsimile signature and her signature was affixed to District accounts payable and payroll checks without her involvement. Because District officials did not design appropriate controls over the payroll process, separation payments were made to two employees in excess of the amounts allowed by each individual's contract. We also found that the District could save taxpayers approximately $30,000 per year in check printing costs by printing checks in-house. Finally, we found that the District did not securely store its backed-up data files and did not have a formal disaster recovery plan for its information technology. The District also did not have policies or procedures controlling remote access to the District's network. Spackenkill Union Free School District[complete audit - pdf]

Reserve and Debt Service Funds
The District did not properly maintain reserve funds, appropriate moneys from the debt service fund for the payment of principal and interest, or credit reserve funds with the amount of interest earned. As a result, the District has accumulated over $7.1 million in excess funds that are not benefiting taxpayers. This amount is equivalent to 10.8 percent of the 2008-09 budget. Spencerport Central School District[complete audit - pdf]

Internal Controls Over Purchasing
During the period July 1, 2007 to March 31, 2009, BOCES officials made payments totaling $58 million to vendors that were, based on the dollar amounts, likely to be subject to competitive bidding, RFPs or quotes. We examined 88 of these payments totaling $479,541. We found no deficiencies. All payments complied with GML and BOCES' policies, were approved by the purchasing agent and the Treasurer prior to the purchase, were verified by the individual that received the goods or services, and were for appropriate BOCES purposes according to the descriptions on the claims. St. Lawrence-Lewis BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The Board appointed an employee of BOCES as the District's claims auditor. This is against the New York State Education Department's (SED) guidance on interpreting regulations, which states that it may not be appropriate for a BOCES to provide claims auditing services to its component districts, since most of these districts would have material and significant contract payments to that BOCES. In addition, the Board appointed a second BOCES employee to serve as the District's deputy claims auditor; however, there is no provision in Education Law that permits the Board to appoint more than one claims auditor. We did not find any exceptions with the BOCES' audit of District claims. We also found no material deficiencies in the District's purchasing policies or methods of obtaining competition for the purchases we reviewed. Susquehanna Valley Central School District[complete audit - pdf]

Financial Condition and Internal Controls Over Procurement
The Board did not prepare reasonable budgets for the five-year period 2003-04 through 2007-08. District officials consistently overestimated appropriations and underestimated revenues by a total of $7.9 million over this period, even though data was often available to develop more accurate budget estimates. District officials used the majority of the $1.6 million average annual surplus to fund reserves without adequate public disclosure or Board involvement. As of June 30, 2008, balances in the District's five general fund reserves totaled $7.4 million. District officials could not provide adequate justification for the establishment and funding of the Debt Reserve and adequate documentation to support the funding levels of two other reserves. District officials also failed to comply with General Municipal Law (GML) requirements and/or the District's own purchasing policies when procuring goods and services. Sweet Home Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials' ineffective use of staff and data resources during our audit period resulted in inaccurate records of accounts receivables and significant deficiencies in controls over these assets; unsupported disbursements from School Accounts which the District is not legally authorized to have; a number of purchases made without compliance with contracts or competitive bidding requirements; routine payroll errors; and a lack of assurance that the District's electronic data is properly safeguarded from loss or misuse. For example, during our audit period, payments recorded as received in the accounts receivable records for the various types of billed services totaled about $17 million. We found that internal controls over accounts receivable were so poor that District officials had no way of ensuring that all the moneys due the District were actually received. Syracuse City School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board approved contracts with and payments to three private corporations that were one-third owned by a Board member. During the two-year period, July 1, 2006 to June 30, 2008, the District paid these three corporations collectively over $85,000 for purchases of various goods and services. We concluded that the Board member had a prohibited interest in the District's contracts with these three corporations and had not publicly disclosed his interest in these contracts. In addition, the Board retained its statutory responsibility and authority to audit claims and authorize their payment during our audit period. However, the Board did not perform a proper audit of claims. District officials have not developed procedures describing methods to use when procuring goods and services that are not required to be bid, and at what dollar amount each method will be used. Finally, District management has not adopted written policies and procedures to provide internal controls over cash receipts for post-employment health insurance benefits and has not provided for an adequate segregation of duties over an account clerk's receipt of post-employment health insurance contributions. Thousand Islands Central School District[complete audit - pdf]

Budget Review
Based on the results of our audit, we found the significant revenue and expenditures projections in the tentative budget to be reasonable. Enlarged City School District of Troy[complete audit - pdf]

Internal Controls Over Selected Financial Activities
Ulster BOCES generally complied with the requirement to return surpluses to the component districts. However, BOCES officials withheld amounts erroneously accrued and accumulated in the general fund as Other Post-Employment Benefits (OPEB) Payable (approximately $12.8 million) from refunds due to the component districts. BOCES’ internal controls over payroll also need to be improved. We also found that internal controls over cash receipts collections in the Business Office were not properly designed or operating effectively. Our audit also disclosed that BOCES entered into professional services contracts with a Contractor that also identifies the wife of a BOCES official as the consultant for the Contractor. The BOCES official did not disclose his interest in the professional services contracts in writing to the Board as required, and there is no evidence that the Board approved the contracts. Finally, BOCES officials have not established adequate internal controls to effectively safeguard BOCES’ computer systems and data. Ulster County BOCES[complete audit - pdf]

Financial Condition and Intermunicipal Consolidation and Cooperation
The District has not taken adequate action to address the excessive fund balance in the general fund. As of June 30, 2008, the unreserved general fund balance totaled $1.3 million. However, District officials appropriated only $200,000 to reduce the tax levy. As a result, the fund balance was almost twice the amount allowed by law. However, the District has taken some positive steps in its effort to consolidate services. The District has established a joint athletic agreement with the Southern Cayuga Central School District. This program has provided the District with additional services at a reduced cost to the taxpayers. Union Springs Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District has not established appropriate internal controls over monitoring its transportation contract. District officials did not periodically review the transportation contract to determine if they were making payments in accordance with its terms. Additionally, District officials did not always update the terms and conditions of the contract when they renewed it, resulting in a contract that, on its face, does not reflect several current practices. As a result, the District incurred up to $71,500 in expenses which, according to the contract, should have been the Contractor's responsibility. In addition, the Board has not established written policies and procedures for payroll. As a result, the Treasurer did not fully reconcile the payroll bank account or record $11,581 in interest earnings. Employees did not always submit time records to the payroll department in a timely manner. Finally, five employees had access to certain functions within the computerized payroll system that they did not need for their regular job duties. Utica City School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials established a Property Loss and Liability (PL&L) Reserve at the end of the 2005-06 fiscal year and funded it with excess fund balance, totaling over $2 million, to cover unanticipated shortfalls in State revenue. This is not a proper use for a PL&L reserve. The District's unappropriated fund balance was already at the maximum permitted by law, which was 2 percent of the District's 2006-07 budget. We also found that the District did not obtain request for proposals for professional service providers, as required by their policy for seven of the eight service providers we tested for an aggregate of $1,177,000. Additionally, District officials did not competitively bid eight of the 25 vendors we tested for a total of approximately $146,000 in expenditures. Furthermore, the claims auditor was not independent of the Business Office function and did not perform a thorough review of all claims before approving them for payment. Valley Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
At June 30, 2008, the EBALR had a balance of $4.2 million, which was more than four times the amount of the related liability. Therefore, the EBALR was overfunded by a total of $3.3 million. The District established this reserve without a Board resolution. The District also used a total of more than $900,000 from this reserve in the 2003-04 and 2004-05 fiscal years for improper purposes. The Board appointed a Treasurer annually and referred to the Treasurer being paid a "retainer," rather than a salary, as would be the case generally with an officer. The manner in which the Treasurer has been compensated indicates that the District treated the Treasurer as if she were an independent contractor. However, the Treasurer’s responsibilities cannot be delegated to an independent contractor. The District’s procurement policy did not require using competition when obtaining professional services. Finally, District officials need to improve controls over computer data. Valley Stream Union Free School District #24[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials did not retain an unreserved, unappropriated fund balance within the statutory limit. As of June 30, 2008, the unreserved, unappropriated fund balance in the general fund totaled $3.09 million, which was more than three times the $1.02 million allowed by Law. This excessive fund balance resulted mainly from operating surpluses that were either not allocated to legal reserves or used to reduce real property taxes. In addition, the District's claims auditing process is not appropriately designed and operating effectively. We reviewed 38 claims totaling $22,055 and found that the Board did not properly audit 18 claims totaling $13,006, which contained various deficiencies related to itemization and documentation. Finally, we found that controls over the student activities account are not appropriately designed. Valley Stream Union Free School District #24[complete audit - pdf]

Internal Controls Over Selected Operations
Although the Board has adopted a purchasing policy, District officials did not always ensure that employees complied with the policy. We tested payments made to nine professional services providers who were paid a total of $456,983 during our audit period. District officials procured services from five of the professional service providers, totaling $198,624, without the benefit of competition. In addition, the District paid two of these providers $102,090 for legal services without a written agreement. District officials did not have a procedure in place to ensure that criminal background checks were performed and filed with New York State Education Department's Office of School Personnel Review and Accountability (OSPRA) for a sample of five individuals (three independent contractors and two agency-provided therapists) who had, or were expected to have, direct contact with students. Finally, internal controls over the District's IT system also need to be strengthened. Valley Stream Union Free School District #30[complete audit - pdf]

Internal Controls Over Non-Payroll Cash Disbursements
Overall, we found that the District's internal controls over non-payroll cash disbursements had been appropriately designed and were operating effectively. Except for minor deficiencies, which we discussed with District officials to help them improve controls and compliance with certain related law and regulations, we found no significant deficiencies in the records we examined. Van Hornesville-Owen D. Young Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials need to improve internal controls over cash disbursements. The Treasurer's access rights to computer data are incompatible with the duties of the Treasurer. District officials have also not established formal written policies or procedures regarding wire transfers and electronic funds transfers. We also found that the District could save taxpayers up to $54,000 per year in the cost of processing checks by performing the service in-house rather than contracting with the Mid-Hudson Regional Information Center. Generally, we found controls over payroll were appropriately designed and operating effectively. Finally, although the District's controls over information technology were generally appropriately designed, our audit indentified some weaknesses in access controls that need to be addressed. Wallkill Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The Board did not establish adequate controls over the administration of its summer programs. It has been the District's practice to allow the Foundation and the Parent-Teacher Association Counsel (PTA) to provide services to summer programs for the District without entering into written agreements with either of these entities prior to the performance of services. In 2006-07, the District paid over $225,000 to the Foundation and in 2007-08, that amount increased to over $282,000. The PTA provides services to the summer recreation program, which netted approximately $18,000 in 2006-07, and approximately $39,000 in 2007-08. In addition, District officials have not established comprehensive policies and procedures to ensure employees receive only payments and benefits to which they are entitled. We also found that the Board was provided with incomplete Treasurer's reports. Finally, the District needs to improve controls over its information technology operations. Wantagh Union Free School District[complete audit - pdf]

Internal Controls Over Purchasing
The Board appointed the Business Manager as the District's purchasing agent. The purchasing agent is responsible for authorizing all purchases by approving purchase orders. We found that the purchasing agent did not always ensure that goods and services were purchased in accordance with the District's procurement policy and regulations and pertinent laws. The purchasing agent did not ensure compliance with the provision in the District's regulation requiring oral or written quotes for purchases under competitive bidding thresholds or the proper documentation of sole source and emergency situations. Watertown City School District[complete audit - pdf]

Financial Condition and Procurement
District officials consistently overestimated expenditures by a total of approximately $6.7 million for the past five years. As a result, the District had operating surpluses totaling $2.8 million in four of the last five years, and did not need to use the majority of the $2.7 million of fund balance which the Board appropriated as a revenue source in the general fund budgets. Despite its budgetary surpluses, the District also increased its real property tax levy by more than $1.8 million – a total of 38 percent - over the last five years. The District used its annual surpluses to increase various reserves and trust account balances. As of June 30, 2009, the District reported nine general fund reserves with balances totaling $4.6 million. The District reported that it did not use, or overfunded, four reserves, which collectively totaled nearly $2.4 million, and used $60,000 from another reserve for an unauthorized purpose. In addition, the District maintained a debt service reserve in the debt service fund at $4.2 million, much of which was not used to pay associated debt service payments. The District also maintained an unauthorized Other Post Employment Benefits Accrued Liability Reserve (OPEB), with a balance of approximately $122,561, in the trust and agency fund. Finally, the District also needs to improve its procurement policy and practices. Wayland-Cohocton Central School District[complete audit - pdf]

Internal Controls Over Purchasing
Based on the results of our testing, we found that the internal controls over purchasing are appropriately designed and operating effectively. We determined that District officials and employees made purchases in accordance with the District's purchasing policy, and that all purchases were made for appropriate District purposes. Wayne Central School District[complete audit - pdf]

Regional Information Center
Based on inquiries we made of the RIC management and our review of policies and procedures during our examination of technology services the RIC provided to component (or cross-contracting) school districts, we concluded that, as of November 18, 2008, controls were adequately designed. Wayne-Finger Lake BOCES[complete audit - pdf]

Internal Controls Over Information Technology and Gasoline Credit Cards
BOCES officials have not adopted comprehensive IT policies and procedures that provide guidance to BOCES employees on all aspects and appropriate use of IT systems and data. Additionally, BOCES did not effectively safeguard its computer data. However, BOCES officials have adopted a sound credit card policy that clearly outlines when credit cards may be issued and how they are to be used. Furthermore, BOCES officials have developed supplementary procedures which require that all purchases of gasoline for BOCES vehicles must be recorded in a log maintained in each vehicle, and any staff holding a BOCES gasoline credit card must submit all of their receipts to the Business Office. Western Suffolk BOCES[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District appointed an independent contractor as Treasurer, although statute and regulation clearly indicate that an independent contractor cannot be a school officer. In addition, the District failed to segregate the Treasurer's cash receipts and disbursement duties. Although we did not identify inappropriate payments, failing to segregate duties increases the risk that errors could occur and not be detected. In addition, District personnel generally did not solicit RFPs when they procured professional services and continued to use the same professionals year after year. Finally, District officials have not developed comprehensive IT policies and procedures that provide guidance to District employees on all aspects and appropriate use of IT systems and data. West Hempstead Union Free School District[complete audit - pdf]

Reserve Funds and Liabilities
District officials did not properly establish or use reserve funds. In addition, District officials did not properly record retiree health insurance costs and related liabilities. At June 30, 2008, the District had seven reserve funds with a cumulative balance of over $7.2 million. Approximately $4.1 million of these amounts should not have been reserved and/or were misreported and could have been used for District operations and/or to reduce the tax levy. In addition, the District also incorrectly reported $138,787 in a dental insurance reserve. District officials also improperly recorded, and thereby overstated, two liabilities by approximately $3 million. As a result, over $7.1 million should have been classified as general fund unreserved fund balance and used for District operations. West Irondequoit Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District's system of internal controls did not adequately segregate the cash-related duties of the Business Manager or provide adequate compensating controls to provide for an effective system of checks and balances over safeguarding District assets. We also found weaknesses in internal controls over information technology (IT). The Board did not adopt a formal written security plan or a disaster recovery plan. In addition, we found weaknesses in internal controls over information technology (IT). The Board did not adopt a formal written security plan or a disaster recovery plan. Finally, we found that the District had established an adequate system of internal controls over claims processing and that the controls were working effectively. West Park Union Free School District[complete audit - pdf]

Financial Condition and Interest in Contracts
District officials routinely overestimated appropriations and underestimated revenues. While the District appropriated at least $250,000 in fund balance each year, it has not been needed or used because the District's budgetary practices have consistently resulted in operating surpluses totaling nearly $2.5 million over the four years ending June 30, 2009. Despite these budgetary surpluses, the District also increased its real property tax levy by more than $1 million over the same four years. The District has used these surpluses to increase various reserves and trust account balances. As of June 30, 2009, the reported general fund and debt service reserves amounted to $5.1 million; however, there was limited or no use of the balances in four of the District's reserves, which totaled more than $2.7 million at June 30, 2009. The District also maintained an unauthorized retirement health trust in the trust and agency fund with a total reported balance of $782,086. Combined, more than $3.4 million held in these reserves was idle money that could have been used for District operations and/or to reduce the tax levy. We also found District management did not have a system in place to make District officials and employees aware of statutory requirements concerning interests in contracts, to identify outside occupations or business interests of District officials and employees, or to monitor proposed procurements to prevent conflicts of interest. Williamson Central School District[complete audit - pdf]

Internal Controls Over Payroll
Overall, we found that the District had established an adequate system of internal controls over payroll processing and that the controls were working effectively. Except for a few minor issues, which we addressed with District officials, we found no significant deficiencies in the payroll records we examined. Willsboro Central School District[complete audit - pdf]

Internal Controls Over Financial Condition
District officials did not prepare reasonable budgets for the 2004-05 through the 2007-08 fiscal years. District officials consistently overestimated expenditures and underestimated revenues - even though data was often available to develop more accurate budget estimates - and made budget transfers far in excess of budgeted amounts disclosed to voters. As a result, the District generated operating surpluses totaling $7.6 million during this period. District officials put the majority of the $1.9 million average annual surplus in reserve funds, appropriating only $250,000 in each of these years to reduce the next year's tax levy. As of June 30, 2007, balances in the District's five reserves in the general fund totaled $3.8 million; three of these reserves are overfunded and/or were used to pay for costs that did not meet statutory requirements. The District is also holding $3.2 million in the debt service fund, most of which has no identifiable purpose. With more accurate budgets and better fiscal management practices, real property taxes in the District would likely have been substantially lower. We estimate that about $2 million in taxes were unnecessarily levied in the 2007-08 fiscal year alone. Wilson Central School District[complete audit - pdf]

Control Environment
The Board did not establish internal control policies and procedures or provide oversight in key areas of operations. There were no formally adopted/approved written policies for some key business operations. Although there were formally adopted/written policies for limited business operations, some of the written policies were found to be very old and there was no evidence to indicate that the Board reviews and/or updates written policies on a periodic basis. In addition, District management allowed the District's unappropriated, unreserved fund balance to exceed the amount necessary and permitted by law. District officials also consistently overestimated appropriations over the last four fiscal years. The Business Manager did not provide the Board with necessary interim financial reports. Finally, the Board failed to act promptly on observations and recommendations that were included in recent management letters prepared by the District's independent public accountants and observations and recommendations made by the District's internal auditor. York Central School District[complete audit - pdf]

Internal Controls Over Cash Management and the Internal Audit Function
The District did not update its collateral and custodial agreements for its deposits in banks. In addition, District officials allowed a vendor to withdraw funds directly from a District bank account. Finally, the BOCES employee serving as the internal auditor is not independent in performing the internal audit function. This current arrangement is likely to put the BOCES employee in the position of evaluating significant District services or programs that are provided to the District by BOCES, the individual's employer. Yorkshire-Pioneer Central School District[complete audit - pdf]