Nonresident Tuition
The District has a process in place to identify nonresident students receiving educational services from the District. Officials effectively identified and billed for qualified foster students during our scope period. However, District officials made several calculation errors in the billing invoices submitted to other school districts for foster students. As a result, the District under-billed approximately $17,800 for eight foster children during the last two fiscal years (2008-09 and 2009-10). In addition, officials were unaware that they should seek reimbursement from the district of origin for nonresident students attending nonpublic schools within the District and receiving special education services from the District. Alden Central School District [complete audit - pdf]

Budget Review
We have reviewed the 2011-12 proposed budget for the Greater Amsterdam School District and found that the significant revenue and expenditure projections in the tentative budget appear reasonable. Greater Amsterdam School District[complete audit - pdf]

We found that school districts can improve controls over their online banking processes. Our tests of 1,817 online transfers at these six districts found that all the transfers were appropriate and properly recorded. However, we also identified risks in online processing activities at all the districts. For example, while we found varying levels of online banking controls in place at all six districts, five districts lacked a comprehensive online banking policy that clearly describes the district's online banking activities, identifies the employees who are authorized to perform them, and provides for verification of the accuracy and legitimacy of transfer transactions. We also found that four districts allowed employees to perform online transfers from non-district computers that are not subject to district security protections. It is also important that districts maintain adequate information technology controls that protect district computers from malicious software and allow access to district-approved websites. We found that one district lacked controls that help ensure employees access the internet in a safe and appropriate manner. Controls Over Online Banking in School Districts[complete audit - pdf]

Internal Controls Over Medicaid Reimbursement
We found that the District did not process all of the claims for 26 Medicaid-eligible students with IEPs, identify the Medicaid-eligibility status of 12 Medicaid-eligible students with IEPs or submit claims for services they received, or identify the potential Medicaid eligibility status of another six students with IEPs who received free school lunches. The District did not get reimbursed for these services because District officials had not established policies and procedures for controlling the Medicaid reimbursement process. As a result, the District did not claim $25,751 for IEP-related services provided to these students. By extending the error rate we identified in our three samples to their respective student populations, we estimate that the District did not claim $295,660 (25 percent) in potential Medicaid reimbursements for IEP services during the 2008-09 year. Auburn Enlarged City School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
We found that the Board had not adopted comprehensive written policies and procedures to provide guidance and internal controls for cash receipts. As a result, we found that cash receipts were not properly accounted for or deposited timely. In addition, the Board had not adopted comprehensive written policies and procedures for processing payroll. Consequently, there was a lack of segregation of duties, and compensating controls were either not in place, or not operating effectively. As a result, employee time records for additional hourly work were not submitted in a timely manner. We also found that internal controls over the District's fiscal management system and network were inadequate. AuSable Valley Central School District[complete audit - pdf]

Internal Controls Over Information Technology
We found that internal controls over the District's fiscal management system were inadequate. Because users were granted access to functions of the financial software applications that they did not need in order to fulfill their day-to-day job responsibilities. In addition, audit logs were not generated and reviewed by someone independent of the Business Office operations, and the District did not have a formal IT disaster recovery plan. Averill Park Central School District[complete audit - pdf]

We found that LP-powered buses cost more than the diesel alternative. However, New York State currently provides NYSERDA grant funds to bridge the difference in cost. We also found that LP fuel costs - with help from a Federal tax credit - are lower, and that maintenance of LP buses is less expensive. However, paying for LP infrastructure (fueling stations) could add to a district's start-up costs for using LP buses. If government tax credits for LP-powered buses continue to be available, and if surcharges on diesel-powered buses continue to increase, LP-powered buses can be a lower-cost alternative to diesel-powered buses. LP fuel is also safer to use and store than diesel fuel. A Comparison of Liquid Propane-Powered and Diesel-Powered School Buses[complete audit - pdf]

Internal Controls Over Selected Financial Activities
We found that the Board has not established critical controls over its budget process. We estimate that between accumulating fund balance in excess of the statutory limit and significantly overfunding a reserve, the District has accumulated more than $12.1 million in taxpayer funds inappropriately. In addition, the District maintained an EBALR that was over-funded by approximately $4.4 million. District officials did not solicit competition for services procured from seven professionals who received payments totaling $524,172 during our audit period. District officials also did not obtain the required number of quotations for three purchases totaling $13,650, as required by the District's procurement policy. The Board did not establish formal policies and District officials did not establish procedures for the protection and use of facsimile signatures disks. Finally, the District needs to strengthen internal controls over certain areas of information technology. Baldwin Union Free School District[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Bayport–Blue Point Union Free School District[complete audit - pdf]

Budget Review
Based on the results of our review, we found that the significant revenue and expenditure projections in the preliminary budget are reasonable. Beacon City School District[complete audit - pdf]

Custodial Staffing Levels and Overtime Costs
We determined that the District can save money by decreasing or adjusting their custodial staffing levels to meet the industry average and by hiring part-time employees to provide substitute coverage. Making these staffing changes and ensuring that overtime hours are only used as necessary and the associated costs- closely monitored and controlled, the District could potentially save District taxpayers up to $712,000 and sharply reduce the $661,000 in overtime costs annually. Bedford Central School District[complete audit - pdf]

Budgeting Practices and Internal Controls Over Transportation State Aid
The Board adopted budgets that underestimated revenues by a total of $3.6 million and overestimated expenditures by a total of $10.5 million, resulting in revenues exceeding expenditures by approximately $6.0 million over the last five years. As a result, the District has accumulated fund balance that exceeds the statutory limit by approximately $5.6 million and has levied more in taxes than were needed to fund operations by that same amount. We also found that the Board has paid for compensated absences totaling $571,191 over the last five fiscal years out of the general fund rather than the reserve fund for that purpose. Internal controls over transportation State aid were not adequate. As a result, two buses that were purchased during the 2007-08 fiscal year were not reported to SED for approval for transportation State aid. Had we not notified District officials of this oversight, the District would have lost transportation State aid totaling approximately $137,000. Beekmantown Central School District[complete audit - pdf]

Internal Controls Over Financial Activities and Information Technology
District officials did not properly segregate the Treasurer's duties and did not implement procedures for the electronic transfer of funds as required by Board policy. We also found that the duties related to performing the electronic transfers were not properly segregated and that agreements with the District's banks had deficiencies. District officials did not comply with and enforce the District's purchasing policies for the procurement of goods and services when competitive bidding was not required by law. Finally, District officials have not developed a disaster recovery plan, and have not established adequate controls to protect the District's file servers and confidential data stored on the servers. Berne-Knox-Westerlo Central School District[complete audit - pdf]

Internal Controls Over Budgeting and Purchasing
The District did not have statutory authority for a reserve fund that had a balance of $1.89 million in the 2010-11 fiscal year. Therefore, the District's general fund unreserved fund balance should have been reported as $5.7 million, which was 6.5 percent of the subsequent year's budget and in excess of the statutory limit. In addition, District staff made purchases from employee-owned businesses totaling $5,838 in violation of Board policy. They also entered into professional service contracts totaling $718,800 and purchased other items not subject to competitive bidding requirements totaling $16,800 - without seeking price competition - in violation of Board policy. Bethlehem Central School District[complete audit - pdf]

Custodial Staffing Levels and Access Rights
District officials have not implemented adequate performance measures to efficiently manage staffing levels at its buildings and grounds department. If District officials used meaningful performance measures to determine the most efficient way to use their custodial staff resources, the District could eliminate the need for an outside contractor and save District taxpayers up to $344,000 annually. In addition, the Treasurer and a payroll clerk were allowed greater access rights to the District's financial system than is required to effectively perform their job functions. Briarcliff Manor Union Free School District[complete audit - pdf]

Non-Resident Tuition
Twenty-one non-resident students attended the District in 2009-10, and 19 non-resident students attended the District in 2010-11, representing approximately 13 percent of the District's 150 students. According to the Board's adopted policies and related resolutions, the tuition for these non-resident students could have totaled $256,225 for the fiscal years 2009-10 and 2010-11. However, we found that the District only charged tuition totaling $144,575 for these students. The District has collected $100,525 of the tuition charged, with $42,800 still expected to be collected for 2010-11. The remaining $1,250 is lost revenue for one student as the District failed to collect an outstanding balance for the 2009-10 school year. Bridgehampton Union Free School District[complete audit - pdf]

Financial Operations
We found that the School paid claims totaling $329,017 before they were audited. The failure to audit claims prior to payment resulted in the School overpaying two vendors by $8,319, and it increases the risk that the School could pay for goods that are not received, services that are not rendered, and claims that are not legitimate, reasonable, or for proper School purposes. Also, the School paid six claims totaling $85,215, of 51 claims examined, later than the 60-day time period that its purchasing policy required claims to be paid within. For example, the School paid a $15,462 invoice for health insurance 93 days after the invoice was dated. I t is important for School officials to ensure that claims are approved and paid by the due date to avoid late fees and to take advantage of any discounts offered for timely payment of claims. We also found that the resident school district bills were accurate. Brighter Choice Charter School for Boys[complete audit - pdf]

Internal Controls Over Personal, Private and Sensitive Information and Information Technology
The District has not effectively implemented procedures to safeguard personal, private and sensitive information. Consequently, we found that District personnel were using social security numbers as employee identifiers on paper and electronic correspondence that was routinely prepared and distributed by department managers. In addition, the District's Record Retention Officer was not overseeing District staff to ensure sensitive information was being properly disposed of in a timely manner in accordance with law. We also found that internal controls over IT were not appropriately designed and operating effectively. The District has not established policies and procedures for acceptable use, granting access rights, and did not adopt a formal disaster recovery plan. Brockport Central School District[complete audit - pdf]

Health Insurance Costs
District officials did not actively monitor the financial operations of the State-Wide Schools Cooperative Health Plan (SWSCHP) or seek competition in acquiring health insurance benefits. We found that had the District considered other options, it could have saved approximately $1 million in health insurance benefit costs over the past three fiscal years. Bronxville Union Free School District[complete audit - pdf]

Both BOCES have been generating significant and growing surpluses because they routinely overbill for CoSer services, and regularly have priced CoSer services higher than necessary to cover CoSer costs. We found that BOCES set tuition rates using historical enrollment rates rather than current year enrollment projections from districts. Additionally, BOCES do not make mid-year pricing adjustments based on actual program participation that would reduce overbilling. As a result, BT BOCES' surplus grew 45 percent (from $7.3 million to $10.5 million) and OU BOCES' surplus rose 141 percent (from $3.8 million to $9.1 million) between 2006-07 and 2008-09. We found that school districts served by BT and OU BOCES do not include significant surpluses, which averaged $500,000 per participating district in 2008-09, on their financial statements because neither BOCES provides individual districts with an estimate of their surplus refunds until mid-way through the next fiscal year. Finally, BT BOCES accumulated unreserved fund balance from one CoSer in violation of Education Law, and incorrectly reported these monies on its financial statements. BOCES Treatment of the Annual Surplus From CoSer Operations[complete audit - pdf]

Internal Controls Over the Business Office
The Board did not address Business Office operations to ensure that incompatible duties were properly segregated, nor did they establish sufficient compensating controls to address the lack of segregation. The District did not have comprehensive written policies and procedures in place to provide adequate guidance and internal controls over purchasing and payroll processing, financial software user rights and bank reconciliations. Cambridge Central School District [complete audit - pdf]

Budget Review
Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative/proposed budget are reasonable. Campbell-Savona Central School District[complete audit - pdf]

Internal Controls Over Business Office Operations
District officials did not ensure that internal controls over Business Office operations were adequate to safeguard District assets. The Treasurer did not control the use of her signature, user access rights to the financial software were not assigned in accordance with job duties, cash disbursement and payroll duties were not adequately segregated, and the District did not have sufficient bonding insurance for employees responsible for disbursing District funds. Although we did not find exceptions during our audit tests, because of these weaknesses, inappropriate payments could be made without detection or correction. Candor Central School District[complete audit - pdf]

Internal Controls Over Information Technology
We found that District officials did not establish adequate IT policies and procedures, and District employees did not use District-owned computers in accordance with the Board's adopted policy. A teacher's District computer was used to access pornographic websites, and District employees spent 314 hours during the audit period accessing five non-job-related sites from District computers, which we estimate cost District taxpayers $9,834 in wasted productivity. Further, District personnel spent 1,691 hours, with an estimated salary value of $52,962, on a social networking site. Finally, District officials did not have a disaster recovery plan or classify the District's data according to its sensitivity and importance in the event of system disruption. Carmel Central School District[complete audit - pdf]

Internal Controls Over Administrators' Private Business Interests
The Board and BOCES officials have created a work environment where there is an inappropriate blending of employees' public responsibilities and their private business interests. We found that private work hours and public work hours cannot be distinguished. In fact, some employees' BOCES work responsibilities mirror the work they do in their private business enterprises. They provide the same services for the same exact school districts they serve as a BOCES employee, at times using materials in their private business that they developed as a BOCES employee. In addition, we also found an Assistant Superintendent, whose 2009-10 salary was $152,527, also "contracts" with BOCES in a barter arrangement to provide additional services to BOCES and is allowed to run his private business out of the BOCES offices. This individual also provides his services to some of the same school districts through his private business enterprise that he also serves as a BOCES employee. Cayuga-Onondaga Board of Cooperative Educational Services[complete audit - pdf]

Medicaid Revenue
Medicaid-eligible claims for at least 10 students were not submitted for reimbursement because District officials responsible for Medicaid reimbursements were not aware of the services that these students had received. In addition, District officials did not submit claims for students they knew received IEP-related services, case reviews, or transportation services due to a lack of documentation. In other cases, the District had documentation but did not submit it, or the services were not provided under the direction of a licensed therapist or speech pathologist. As a result, Medicaid claims for reimbursement for 50 students, totaling $301,008 were not submitted. If these claims had been submitted and approved, the District and New York State would have received 25 percent of the cost, totaling $75,252 each. Central Islip Union Free School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Internal Controls Over Selected Financial Activities
During the 2009-10 fiscal year, the District's purchasing agent routinely approved purchases without available appropriations, and the Superintendent did not make budget transfers throughout the year or submit them to the Board for approval, as required. Instead, District officials waited until June 30, 2010 to make $3.1 million in budget transfers; these transfers included correcting 75 budget line items that had been over-expended by a total of $2.6 million throughout the year. While the Board received monthly budget status reports throughout the year, Board members did not address negative balances in budget line items. In addition, the purchasing agent did not ensure that the District solicited price quotes for four of the 10 purchases, totaling $8,461, as required by the Board-adopted policy and procedures. Finally, the District does not have comprehensive IT policies and written procedures in place that adequately address all major areas of IT operations and inform employees on how computers should be used. Center Moriches Union Free School District[complete audit - pdf]

We found that the districts did optimize the use of OGS and/or BOCES contracts to procure goods and services in a cost-effective manner. We reviewed the purchases of 20 goods and services totaling $11.76 million during our audit period and found that the districts used OGS contracts (34 percent) or BOCES contracts (45 percent) for 16 purchases totaling $9.29 million (79 percent). The districts generally procured the remaining 21 percent of these purchases, totaling $2.47 million, by using a competitive bidding process, obtaining quotes prior to making the purchase, or, for some items (e.g., textbooks, software), purchasing from a sole source provider. Selected Central New York School Districts'[complete audit - pdf]

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

Legal Service Costs
The District has contracts with two separate legal firms, one as general counsel and one as counsel for labor relations. We found that there was a potential duplication of services in the terms and conditions stated in the two contracts, as both contracts included services for labor relations. Neither contract was specific as to which type of labor relations each counsel would handle. Further, the District's legal costs were high relative to all other Districts statewide. If the District had achieved the average costs of comparable school districts in the region, it would have saved as much as $462,000 in legal services costs during fiscal years 2007-08 through 2009-10. District officials entered into the two legal service contracts without soliciting competition, and has retained the services of the same general counsel since 1949 and the same labor relations counsel for the past 16 years. Clarkstown Central School District[complete audit - pdf]

Financial Condition
District officials financed construction and legal costs associated with a capital project by recording improper interfund loans to the capital project fund. As a result, available fund balance was consistently overstated. Because the capital project fund did not have the financial resources to repay more than $1 million interfund loans, we calculated that the reported fund balance of $1.5 million at June 30, 2010 was actually about $497,000. Also, officials have annually issued revenue anticipation notes (RANs) to finance District operations. The District currently lacks the fiscal resources to properly comply with the statutory requirements for issuing RANs and still pay District bills. Clinton Central School District[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Cohoes City School District[complete audit - pdf]

Shared Transportation Facility
We calculated the difference between construction costs of two separate bus garages and of a shared transportation facility. Certain costs would be duplicated by building two separate bus garages. For example, with two bus garages, both Districts would be paying for land, site work, and architect and legal services. By having one shared facility these types of costs are reduced. Using the architect's cost projections, we estimate that by building a new shared facility instead of building separate facilities, the Districts could save taxpayers about $1.9 million just in construction costs alone. In addition, if the Districts could share buses, they would need fewer total buses. We estimate that they could collectively purchase one less bus each year and save about $100,000 annually. Colton-Pierrepont School District and Parishville-Hopkinton School District [complete audit - pdf]

Fund Balance and Reserves
We found that the Board and District officials consistently overestimated expenditures and underestimated revenues, which resulted in annual operating surpluses, and appropriated fund balance they did not need, resulting in increases to fund balance of $2.8 million over the last four fiscal years. Further, the District's unreserved, unappropriated fund balance exceeded the amount allowed by law in each of the last four years. We estimate that the District has over $1.89 million in excess fund balance and unnecessary reserves that could be used to benefit taxpayers. Corinth Central School District[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Corning City School District[complete audit - pdf]

Internal Controls Over Online Banking
The District conducts online banking with five banks and performs electronic transfers with four of them. Although the District has informal electronic transfer procedures and a policy governing the investment of District funds, it does not have formal, written policies and procedures over online banking to adequately safeguard the money routinely transferred between bank accounts. The District does not have any online banking agreements with two of the four banks that process its electronic transfers, and its online banking agreements with the other two banks were incomplete and contained deficiencies. The District's Chief Financial Officer (CFO) and Treasurer are not using a dedicated computer when performing online banking transactions. The District has an increased risk of being exposed to security risks on computers used for online banking by permitting access to websites that are not used primarily for business purposes. Finally, access to the District's bank websites is not adequately secured because the CFO and Treasurer do not properly log-in and log-off the banking websites. Coxsackie-Athens Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
District officials prepared and presented general fund budgets that consistently overestimated appropriations. For the three-year period 2007-08 through 2009-10, District officials overestimated appropriations by a total of $4.86 million. These budgets resulted in operating surpluses of more than $1.1 million in 2008-09 and 2009-10. To manage general fund balance levels, officials appropriated fund balance, made transfers of surplus moneys to various reserves, and accumulated other moneys in a Debt Service Reserve. By appropriating fund balance as a financing source and transferring moneys to reserves outside the budget process, District officials were able to keep fund balance within the legal limit. In addition, the District has weaknesses in internal controls over daily cafeteria register receipts, prepaid moneys, and vending machine receipts. Finally, District officials need to improve internal controls to effectively safeguard the District's computer system and data. Dover Union Free School District[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Dryden Central School District[complete audit - pdf]

Employee Benefit Accrued Liability Reserve Fund and Cost Savings Opportunities
We found that although the District properly established an EBALR, they did not fund the reserve in an appropriate manner. The reserve balance as of June 30, 2010 was $1.75 million. The District's liability for this benefit, based on accrued and unused sick leave balances at June 30, 2010, was estimated to be $333,046. Therefore, the EBALR is overfunded by $1.42 million. Further, we determined that the District has the potential to achieve cost savings of $100,420 by sharing bus routes with neighboring districts and monitoring fuel use, and cost savings of $82,890 by expanding the payment in lieu of health insurance benefits option to additional employees. Dunkirk City School District[complete audit - pdf]

Budget Review
Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget appear reasonable. East Moriches Union Free School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
District officials allowed the Board President, Vice President, and a Board member to continue receiving health insurance coverage while neglecting to reimburse the District. As of June 2010, the two Board members had health insurance coverage even though the Board President owed $9,017, and the other Board member owed $6,655, for a total of $15,672. In addition, the Vice President defaulted on his health insurance payments from June 2009 through November 2009, owing a balance of $1,282. However, on January 1, 2010, he finally paid the District this amount and cancelled his health insurance. Furthermore, District officials failed to procure professional services totaling $2.4 million through the use of competition, and allowed two professionals to be paid $495,023 despite the lack of written agreements. Finally, District officials inaccurately projected a June 30, 2010 fund balance of $13,153,000 when preparing District's 2010-11 budget. In fact, the District's audited financial statement showed a June 30, 2010 fund balance of $17,793,047. East Ramapo Central School District[complete audit - pdf]

Financial Condition and Health Insurance Benefits
We found that over the past three years District officials used non-transparent practices to reduce fund balance levels to within statutory limits rather than using surplus monies to reduce the tax levy as required by statute. District officials did not disclose their intent during the budget process to use $1.5 million to fund various reserves. Instead they simply transferred excess fund balance at year end. Further, for the fiscal years 2006-07 through 2009-10 District officials appropriated more than $4.6 million of fund balance to finance operations. However, because the District consistently experienced operating surpluses over this period, the appropriated fund balance was not actually used to finance operations. We also identified significant procedure and control deficiencies over the monitoring and reviewing of health insurance benefits. Eden Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
We found that the Board inappropriately delegated the discretionary functions of approving purchase orders, journal entries and wire transfers to its business consultant. Consequently, the business consultant was responsible for approving all District purchases, including the purchase of his own services. In addition, he approved journal entries and wire transfers for the two months reviewed totaling $25.4 million, representing a combined 93 percent of all such activity for those two months. The District also paid four former employees $9,820 for unused vacation leave that was not expressly authorized by their employment agreements, or by Board resolutions. District officials generally did not solicit competition when obtaining professional services and continued to use the same professionals year after year. We reviewed payments made to 10 professionals, totaling $1.23 million, and found that six of the professionals, who were paid $1 million, were hired without the benefit of competition. Finally, internal controls over the District's IT system need to be improved. Elmont Union Free School District[complete audit - pdf]

Audit Follow Up
Based on our limited procedures, it appears that the District has implemented almost all of our recommendations. Of the 15 audit recommendations, 14 were implemented and one was partially implemented. Evans-Brant Central School District[complete audit - pdf] | [2006 audit report - pdf]

Budget Review
Based on the results of our review, we found that the significant revenue and expenditure projections in the tentative budget appear reasonable. Fabius-Pompey Central School District[complete audit - pdf]

Internal Controls Over Claims Auditing and Contractual Expenditures
The Board appointed a claims auditor to audit and approve claims prior to payment. However, the claims auditor did not always perform an adequate review. Although she compared the invoices to the purchase order and check, she did not always compare invoices to the contracts or bid documents. During our audit period, the District paid $961,347 to 10 buildings and grounds vendors, $123,371 to three legal services vendors, and $160,254 to four printing and mailing vendors for goods and services in excess of $10,000. We found no material deficiencies in the District's purchasing operations for the legal services and printing and mailing services. However, the District did not seek competition for two of the buildings and grounds vendors and did not have a comprehensive contract that covered adequate documentation of prices for a third buildings and grounds vendor. Florida Union Free School District[complete audit - pdf]

Online Banking
The Board did not adopt an online banking policy and did not develop procedures for online banking activities. In addition, online banking duties were not properly segregated and account accessibility was not properly controlled. Furthermore, the Treasurer and Deputy Treasurer did not use proper procedures when accessing and exiting online banking sessions. Finally, the Treasurer and Deputy Treasurer did not receive appropriate online banking training and access to the District's bank accounts has not been monitored. As a result, District funds are at risk. Fonda-Fultonville Central School District[complete audit - pdf]

Financial Management
We found that District officials did not provide for effective financial planning and management of budget estimates. While District officials did a good job of controlling expenditures, District budgets routinely overestimated appropriations. As a result, the District generated more than $2.3 million in operating surpluses over a three-year period. We also found that four District reserves funded by budget surpluses had unsupported balances totaling $2.3 million at June 30, 2010. Combining the District's unreserved fund balance over the legal limit and the unsupported balances in the four reserves, the District has accumulated $4.1 million in excess funds that should be used to benefit taxpayers. Franklinville Central School District[complete audit - pdf]

Internal Controls Over Transportation Services and Unauthorized Health Insurance
The District is not using effective internal controls to monitor its student transportation services. Neither District officials nor the vendor could provide us with a copy of the regular daily run contract. Due to changes in school facilities and enrollment and the lack of routing software, the Board cannot ensure that regular daily bus routes are efficient to limit the cost to District taxpayers. In addition, we found that the vendor erroneously included mileage for additional runs in the calculation of District fuel available in the vendor's tank. As a result, the District's fuel balance was understated by 8,085 gallons, with an approximate value of $20,700, for the period July 1, 2009 to June 30, 2011. In addition, the District has not collected more than $13,000 for unauthorized health insurance payments made for a former Superintendent. The District continues to provide him with health insurance coverage, at his own expense, without authorization of the Board. Fredonia Central School District[complete audit - pdf]

Internal Controls Over Purchasing
The Board adopted written purchasing policies and procedures outlining the purchasing process, including the procurement of goods and services. However, the policy did not require bid and quote documentation to be attached to the purchase orders for purchases under the bid threshold. Also, District officials did not always follow the Board-adopted policies. As a result, over $383,000 in purchases were either not properly reviewed and approved by the purchasing agent, were not properly audited, or did not contain documentation that more than one vendor was quoted. Galway Central School District[complete audit - pdf]

Virtual Desktops: Cost Savings and Energy Conservations
The District had established a proposed computer replacement schedule as part of its 2009 – 2013 Technology Plan. However, due to budget constraints, the District could not make the computer purchases that had been planned for the 2010-11 fiscal year. With the assistance of the Technology Coordinator, we determined that of the District's 399 instructional desktop workstations, 270 could reasonably be part of a virtual desktop setup. We then determined that the District could provide these 270 work stations using 59 computers and 211 virtual workstations, instead of 270 desktop computers. For our calculations, we assumed a three-year replacement cycle. Therefore, 90 workstations would be replaced annually. We estimated the total savings for the District over this three-year cycle to be $173,862. Geneseo Central School District[complete audit - pdf]

Internal Controls Over Medicaid Reimbursement
We found that the District is not properly processing its claims for Medicaid reimbursement. The District lacked written policies and procedures to define the responsibilities for collecting data and documentation, identifying eligible students, submitting and reconciling claims, and monitoring the reimbursement process during the 2008-09 fiscal year. As a result, in the 2008-09 fiscal year the District did not claim an estimated $175,064 in potential Medicaid reimbursements for IEP-related services, Targeted Case Management (TCM), and TCM ongoing service coordination. Geneva City School District[complete audit - pdf]

Employee Health Insurance Cost Reduction Strategies
Overall, we found that BOCES had implemented various strategies to reduce the costs of health insurance coverage for their employees, retirees, and employee's surviving spouses. These cost-savings strategies included participation in a self-funded insurance plan, establishing pre-tax cafeteria plans with flexible spending accounts and offering employees payments in lieu of health insurance, which resulted in almost $2.4 million in cost savings during our audit period. Greater Southern Tier Board of Cooperative Educational Services[complete audit - pdf]

Internal Controls Over Payroll and Fundraising
Internal controls over payroll were not adequate to protect District's assets. The Board neither entered into formal employment agreements with administrative employees nor adopted District-wide policies to define compensation provided such employees. As a result, questionable payments of more than $100,000 were made to three administrative employees and the former Superintendent. Further, the District's controls over financial operations did not prevent the accounting for the activities of a golf-fundraiser through District accounting system although such activities are not a proper school district function. Greenburgh-North Castle Union Free School District[complete audit - pdf]

Claims Processing
We found deficiencies in the design of the District's internal controls over claims processing. The Board has not passed a resolution authorizing the payment of claims prior to audit and approval by the claims auditor. The claims auditor does not report to the Board on a regular basis. Instead, the claims auditor contacts the Board only if there is a particular reason or problem. Approved warrants are not recorded in the Board minutes. The Board does not require documentation of the necessity for hand-drawn checks and the claims auditor has never questioned the need for a hand-drawn check to be prepared and printed outside of the normal warrant cycle. Guilderland Central School District[complete audit - pdf]

Internal Controls Over Purchasing and Fuel Inventories
We found that District officials did not seek competitive bids, as required, for two of 10 purchases totaling $57,500, or obtain the required number of written or verbal quotes, as stated in the SBA's guidelines for purchases under the bidding threshold, for five of 21 purchases totaling $18,344. The District also paid four of seven professional service providers a total of $183,600 without soliciting competition. Finally, District officials should improve controls over gasoline and diesel fuel inventory. The District could not account for 3,123 gallons of fuel valued at $6,739 because the District has not established policies and procedures to effectively control these inventories. Hannibal Central School District [complete audit - pdf]

Health Insurance Costs and Custodial Staffing Levels and Overtime Costs
We compared the District's health insurance benefit costs for the last four fiscal years to a similar health insurance benefits plan. Had District officials investigated alternate providers of health insurance benefits and changed plans in 2006-07, the District and participants could have saved approximately $2.9 million during the last four fiscal years. The Department of Facilities employs approximately 23 full-time equivalent (FTE) custodians more than called for by the American School and University (ASU) standards. We estimate that if the Department's custodial staffing levels were at the ASU standards, the District could potentially save up to $1.6 million annually in salaries and benefits. In addition, the Department has not identified approximately $350,000 of custodial overtime by categories such as mandatory, program related, and non-program related. Harrison Central School District[complete audit - pdf]

We found that school districts can improve controls over their online banking processes. Our tests of 1,817 online transfers at these six districts found that all the transfers were appropriate and properly recorded. However, we also identified risks in online processing activities at all the districts. For example, while we found varying levels of online banking controls in place at all six districts, five districts lacked a comprehensive online banking policy that clearly describes the district's online banking activities, identifies the employees who are authorized to perform them, and provides for verification of the accuracy and legitimacy of transfer transactions. We also found that four districts allowed employees to perform online transfers from non-district computers that are not subject to district security protections. It is also important that districts maintain adequate information technology controls that protect district computers from malicious software and allow access to district-approved websites. We found that one district lacked controls that help ensure employees access the internet in a safe and appropriate manner. Controls Over Online Banking in School Districts[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Hilton Central School District[complete audit - pdf]

Financial Condition and Energy Savings
The District has not taken adequate action to address the excessive general fund balance or adopt realistic budgets. As a result, at June 30, 2010, the District reported an unreserved, unappropriated general fund balance of approximately $1.7 million. This amount is approximately 18 percent of the ensuing year's appropriations and exceeds the statutory limit by more than $1.3 million. The District could potentially achieve cost savings by using reduced-watt fluorescent lamps and high-efficiency ballasts for lighting. We estimate the District could potentially save more than $162,000 over the life of the upgrades. Hinsdale Central School District[complete audit - pdf]

Financial Condition and Public High Cost Aid
District officials did not prepare reasonable budgets for the 2005-06 through the 2009-10 fiscal years. District officials underestimated revenues by $3.6 million and overestimated appropriations by $6.5 million over this period. As of June 30, 2010, we estimate that the District has more than $1.5 million in excess funds that could be used to benefit taxpayers. In addition, District officials have not properly filed State aid claims for public high cost aid in a timely manner and as a result the District has lost more than $401,000 in aid. Furthermore, it could have potentially lost an additional $189,000 for the 2008-09 fiscal year. However, because we notified District officials of this during our fieldwork, they were able to submit the required forms by the deadline. Holland Central School District[complete audit - pdf]

Software Cost Savings and the Composting Program's Environmental Impact
The District realized cost savings of approximately $47,000 by using its free e-mail application versus upgrading its old e-mail system. In the fall of 2009, District officials implemented a composting program at their intermediate school with grades three through six. Through this composting effort, the District reduced the amount of cafeteria waste for both schools to approximately 76 pounds per day, or approximately six tons per school year. As an added benefit, the District saves about $1,500 annually through a reduction in tipping fees and the purchase of garbage bags. Homer Central School District[complete audit - pdf]

Internal Controls Over Information Technology
We found significant deficiencies involving the security of the District's computerized information during our audit period. District officials have not implemented measures to encrypt sensitive data located on the District's servers, and they were not able to determine whether the District's third-party vendors were adequately protecting the District's sensitive data. The District had an inadequate segregation of duties within the Business Office because the purchasing agent served as the system administrator for the automated financial accounting software and the Treasurer, senior account clerk, and Business Administrator had full access rights to the computer system. The District's audit logs did not contain sufficient information to allow District officials to adequately review and determine the appropriateness of the system users' actions, and District officials did not review the audit logs. Also, District Officials have not performed a risk assessment to determine where IT risk (or threats) exists and what procedures could mitigate such risk, and they have not developed and implemented security awareness training to periodically inform end users about District policies and standards. Hoosic Valley Central School District[complete audit - pdf]

Budgeting Practices and Internal Controls Over Selected Financial Activities
During the past three fiscal years District officials routinely overestimated appropriations and underestimated revenues even though data was available to help them develop more accurate budget estimates. As a result of these practices, the District generated more than $5.1 million in operating surpluses over a three-year period. Further, District officials overfunded an employee benefits accrued liability reserve (EBALR) by $3.7 million. The District's continued practice of retaining fund balance in excess of the amount allowed by law and overfunding its EBALR account resulted in the District levying approximately $5 million more in taxes than were needed to fund operations for the 2009-10 fiscal year. District officials also need to improve controls over information technology and payroll payments to interim officials. Hudson Falls Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Financial Condition and Internal Controls Over Cafeteria Receipts
The Board did not adequately monitor its fund balance. Consequently, the District has accumulated approximately $1.95 million in excess funds that should be used to benefit taxpayers. The District retained at least twice the amount of fund balance allowed by law in each of the last four fiscal years' budgets. The District's budgets resulted in operating surpluses in three out of the last four fiscal years. Therefore, none of the fund balance that was appropriated in those three years was actually used, and the District's year-end fund balance actually increased rather than decreased. Finally, the District has not established adequate internal controls over cafeteria cash receipts. Ilion Central School District[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Iroquois Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

We found that LP-powered buses cost more than the diesel alternative. However, New York State currently provides NYSERDA grant funds to bridge the difference in cost. We also found that LP fuel costs - with help from a Federal tax credit - are lower, and that maintenance of LP buses is less expensive. However, paying for LP infrastructure (fueling stations) could add to a district's start-up costs for using LP buses. If government tax credits for LP-powered buses continue to be available, and if surcharges on diesel-powered buses continue to increase, LP-powered buses can be a lower-cost alternative to diesel-powered buses. LP fuel is also safer to use and store than diesel fuel. A Comparison of Liquid Propane-Powered and Diesel-Powered School Buses[complete audit - pdf]

We found that the districts did optimize the use of OGS and/or BOCES contracts to procure goods and services in a cost-effective manner. We reviewed the purchases of 20 goods and services totaling $11.76 million during our audit period and found that the districts used OGS contracts (34 percent) or BOCES contracts (45 percent) for 16 purchases totaling $9.29 million (79 percent). The districts generally procured the remaining 21 percent of these purchases, totaling $2.47 million, by using a competitive bidding process, obtaining quotes prior to making the purchase, or, for some items (e.g., textbooks, software), purchasing from a sole source provider. Selected Central New York School Districts'[complete audit - pdf]

Internal Controls Over Extra-Classroom Activities
Although the Board established a policy for the activity fund, the policy is not adequate because it does not provide specific guidance for the financial management and recordkeeping of the activity fund, and it has not been updated since 2001. The District developed an extra-curricular handbook (handbook) to supplement the Board policy; however, the handbook has not been formally adopted by the Board. Furthermore, while the handbook is more comprehensive than the District policy, it still does not establish adequate internal controls over extra-curricular activity monies. Greater Johnstown School District[complete audit - pdf]

Internal Controls Over the Treasury Function
District management did not take sufficient action to fully implement our prior audit recommendations concerning the Treasurer's duties, and the Board did not effectively monitor management's implementation of corrective action. In response to our prior audit, management formally assessed and revised the Treasurer's user rights on the computerized accounting system. However, management did not address other risks that resulted from continuing to assign conflicting job duties to the Treasurer such as responsibility for both the custody of cash and preparing bank reconciliations. Jordan-Elbridge Central School District[complete audit - pdf]

Financial Condition
As of June 30, 2010, the District overstated certain liabilities by $6 million and overfunded certain reserves by a total of $1.85 million. Had the liabilities been properly accounted for and the reserves reasonably funded, the combined total of $7.85 million would have increased the District's actual unreserved, unappropriated fund balance to $8.5 million at the end of the 2009-10 fiscal year, representing 52 percent of the ensuing year's appropriations of $16.2 million. In addition, we found that District officials borrowed money the District did not need in amounts ranging from $1.5 million to $2 million, and incurred associated debt issuance and interest costs totaling almost $195,000, during the last three completed fiscal years. Kendall Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Internal Controls Over Selected Financial Activities
District officials did not ensure that agreements with professional service providers were sufficiently detailed and did not adequately monitor contract performance. As a result, the District paid for security services that it may not have received from one service provider. Further, the District made payments totaling $40,216 over contract maximum amounts for three contracts. The District's lack of comprehensive policies and procedures has allowed control deficiencies to exist in the areas of bank agreements, dedicated computers, Internet usage, and online banking access. In addition, one Board member had a prohibited interest in a District contract, and another Board member did not disclose his interest in a District contract, as required. The District did not require its vendor bus drivers to maintain ridership calendars, and therefore, the District was unable to submit Medicaid claims for reimbursement totaling $114,620. Finally, the District needs to improve its internal controls over information technology. Kingston City School District[complete audit - pdf]

Administrative Costs Relating to Instructional Technology Operations and Claims Processing
At an average salary of $89,719 for technology administrators, the District could save approximately $209,942 if it chose to operate its instructional technology program with technology administrators equal to twice the average of other similar districts. In addition, by revaluating the amount of resources utilized for videographer and website services, the District could potentially save an additional $68,000. Finally, the Board has not adopted a written job description, policies, and/or procedures to provide specific instructions and communicate its expectations to the claims auditor. As a result, the claims auditor, who has served in that position for the past 10 years, was not aware of the requirement to report directly to the Board. Lakeland Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Internal Controls Over Capital Assets
We found that the District had improved its centralized control system over the District's inventories. Lansingburgh Central School District[complete audit - pdf]

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

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Virtual Desktops: Cost Savings and Energy Conservation
The District currently uses a traditional desktop configuration for the computers in its computer labs. This includes nine locations that have multiple stations with a total of 60 computers. We found that if the District were to replace all 60 computers with virtual desktop technology, the District would save $23,292 over a three-year period. Livingston Manor Central School District[complete audit - pdf]

We found that school districts can improve controls over their online banking processes. Our tests of 1,817 online transfers at these six districts found that all the transfers were appropriate and properly recorded. However, we also identified risks in online processing activities at all the districts. For example, while we found varying levels of online banking controls in place at all six districts, five districts lacked a comprehensive online banking policy that clearly describes the district's online banking activities, identifies the employees who are authorized to perform them, and provides for verification of the accuracy and legitimacy of transfer transactions. We also found that four districts allowed employees to perform online transfers from non-district computers that are not subject to district security protections. It is also important that districts maintain adequate information technology controls that protect district computers from malicious software and allow access to district-approved websites. We found that one district lacked controls that help ensure employees access the internet in a safe and appropriate manner. Controls Over Online Banking in School Districts[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Internal Controls Over Payments to Substitute Employees
The District generally followed the policies and procedures for paying substitute employees and paid the proper amounts. However, there was one instance where a retired teacher who earned substitute teacher wages in 2009, from which the District purposely withheld $4,100 in wages in order to avoid exceeding the threshold established by Retirement and Social Security Law. Malone Central School District[complete audit - pdf]

Transportation Cost Savings
We found that District officials contracted with a consulting firm to perform a study that included an analysis of the efficiency of the District's transportation operation. As of December 2010, District officials were in the process of evaluating the recommendations in the study report, but had not yet developed performance measures. Our audit, conducted as of June 30, 2010, determined that the District can save money by reducing excess capacity on buses, eliminating school runs, and sharing transportation for students with disabilities with neighboring Districts. By making these changes, the District could save $1,282,692. Mamaroneck Union Free School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Cost Savings
The District replaced 76 of its laptops with netbooks, creating cost savings of approximately $38,000 during our audit period. District officials could realize approximately $50,000 in additional savings if they continue to replace laptops with netbooks. The District purchased and installed wireless routers in-house instead of contracting out for the purchase and installation of this service, achieving savings of approximately $36,000 during our audit period. In addition, we determined that the District could have achieved an additional $46,500 in cost savings over the past three years by offering a health insurance buyout incentive to more employees. Marathon Central School District[complete audit - pdf]

We found that school districts can improve controls over their online banking processes. Our tests of 1,817 online transfers at these six districts found that all the transfers were appropriate and properly recorded. However, we also identified risks in online processing activities at all the districts. For example, while we found varying levels of online banking controls in place at all six districts, five districts lacked a comprehensive online banking policy that clearly describes the district's online banking activities, identifies the employees who are authorized to perform them, and provides for verification of the accuracy and legitimacy of transfer transactions. We also found that four districts allowed employees to perform online transfers from non-district computers that are not subject to district security protections. It is also important that districts maintain adequate information technology controls that protect district computers from malicious software and allow access to district-approved websites. We found that one district lacked controls that help ensure employees access the internet in a safe and appropriate manner. Controls Over Online Banking in School Districts[complete audit - pdf]

Medicaid Revenue Enhancements
We found that District officials did not claim a total of $255,285 in costs, and therefore did not realize a total of at least $63,821 in reimbursement revenues, for IEP-related services, special transportation, and ongoing service coordination provided to Medicaid-eligible students in the 2008-09 fiscal year. Massapequa Union Free School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Internal Controls Over Retirement Reporting and Cash Disbursements
District officials did not implement formal procedures for retirement reporting. Retirement reports prepared by a payroll clerk that were submitted to NYSLRS were not reviewed for accuracy or approved by an appropriate official. As a result, five employees improperly received service credit for 534.3 days they did not earn. We notified NYSLRS of this misreporting so that corrective action can be initiated to ensure these employees do not receive benefits to which they are not entitled. We also found that the District's internal controls over cash disbursements are appropriately designed and operating effectively to safeguard cash. Miller Place Union Free School District[complete audit - pdf]

Budget Review
Based on the results of our review, we found that the significant revenue and expenditure projections in the preliminary budget are reasonable. Monroe-Woodbury Central School District[complete audit - pdf]

Information Technology Cost Savings
District officials recognize that although computer networks are essential to today's educational programs, they are major consumers of electricity. The IT department's staff has taken a number of steps to lower the costs associated with operating the District's information technology infrastructure, including programming computers to shut down automatically every day and consolidating physical servers. We estimated these actions saved the District $11,000 in annual software costs and at least $9,700 in annual electricity costs. Monticello Central School District[complete audit - pdf]

Internal Controls Over Professional Services and Claims Auditing
The Board has adopted a comprehensive purchasing policy that requires the use of a request for proposal (RFP) to procure professional services. However, District officials did not always use RFPs to obtain professional services. Additionally, the District paid certain professional service providers without the benefit of written agreements. As a result, the District may have paid more than necessary when obtaining these services. We also found that the claims auditor did not perform his duties in accordance with the District's claims auditor policy and that the District paid 45 claims totaling $191,742 prior to the review and approval of the claims auditor. Moriah Central School District[complete audit - pdf]

Transportation Cost Savings
We determined that the District can save money by reducing excess capacity on buses, and sharing transportation for students with disabilities with other districts. By making these changes to improve transportation efficiency, the District could achieve as much as $2.2 million in annual cost savings. In addition, the District did not have a process for tracking approved transportation contracts or timely reconciling transportation expenditures and as a result the District's State Transportation Aid may be reduced by approximately $938,000. The District also had missed the opportunity to claim an additional $30,900 in expenditures which were attributable to approved contracts and would have provided approximately $24,700 in additional aid to the District. Newburgh Enlarged City School District[complete audit - pdf]

Employee Benefit Accrued Liability Reserve Fund and Student Transportation Operations
Although the District properly established an EBALR, it did not fund the reserve in an appropriate manner. The EBALR is overfunded by $8.1 million. In addition, by increasing bus occupancy, eliminating bus routes, and sharing common routes with neighboring districts, the District could potentially save in excess of $418,000 annually in transportation costs. This amount represents approximately 20 percent of the District's student transportation costs in the 2009-10 fiscal year. Newfane Central School District[complete audit - pdf]

Fund Balance and Internal Controls Over Selected Financial Activities
District officials have retained fund balance in excess of the legal limit over the last five fiscal years, which has resulted in the District raising over $3 million more in taxes than were needed to fund District operations. In addition, the Business Manager did not submit the appropriate forms with the State Education Department (SED) for the District to receive transportation aid for six buses purchased during the 2007-08 and 2008-09 fiscal years, and therefore the District could have lost approximately $464,000 in transportation aid. Weaknesses also exist in the controls over the Business Office's financial operations. Finally, internal controls over extra-classroom activity funds were inadequate. Northern Adirondack Central School District[complete audit - pdf]

Internal Controls Over Payroll and Employee Benefits
We identified weaknesses in internal controls over the District's payroll and employee benefits functions. The Board did not formally authorize certain employees' salaries and benefits and/or properly document such authorization, and management did not adequately segregate staff payroll duties or provide compensating oversight. The Treasurer is responsible for the entire payroll process, payroll authorizations are not sufficiently thorough, and there is no independent reconciliation of the authorized payroll with the printed checks. Access to the District's computerized payroll program is also not properly limited or monitored. These control deficiencies leave the District vulnerable to payroll-related errors or irregularities that may not be detected and corrected. Northville Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
The Board has not adopted written policies addressing electronic banking transactions and District officials have not developed specific written procedures for wire transfers and electronic funds transfers. Of the 43 transfers, five transfers totaling $4,298,702 were not executed in accordance with the District's informal procedures. District officials did not always solicit competition by issuing RFPs when obtaining professional services as prescribed by the District's procurement policy. We tested 14 professional service contracts totaling $667,023 and found that District officials did not request RFPs for five contracts totaling $190,475. Finally, District officials have not implemented comprehensive information technology (IT) policies and procedures to sufficiently assign responsibility for access to the financial software system, and to require the monitoring of remote access activities. North Shore Central School District[complete audit - pdf]

Internal Controls Over Information Technology
We found that the Board has adopted an IT policy. However, it needs to be modified to address certain IT risks, such as those arising from the use of external hardware devices or Internet browsing to prohibited sites. We also identified other areas in need of improvement. For example, the District's Internet filtering device does not sufficiently limit access to sites without a discernible business purpose, and can be overridden by the business staff. In addition, computers with access to the financial accounting software can download files, such as streaming videos that could introduce malicious software and place the District's IT system and data at risk. North Warren Central School District[complete audit - pdf]

Audit Follow Up
Based on our limited procedures, it appears that the District has implemented most of our recommendations. Of the 10 audit recommendations, eight were implemented and two were partially implemented. Oakfield-Alabama Central School District[complete audit - pdf] | [2007 audit report - pdf]

We found that the districts did optimize the use of OGS and/or BOCES contracts to procure goods and services in a cost-effective manner. We reviewed the purchases of 20 goods and services totaling $11.76 million during our audit period and found that the districts used OGS contracts (34 percent) or BOCES contracts (45 percent) for 16 purchases totaling $9.29 million (79 percent). The districts generally procured the remaining 21 percent of these purchases, totaling $2.47 million, by using a competitive bidding process, obtaining quotes prior to making the purchase, or, for some items (e.g., textbooks, software), purchasing from a sole source provider. Selected Central New York School Districts'[complete audit - pdf]

We found that school districts can improve controls over their online banking processes. Our tests of 1,817 online transfers at these six districts found that all the transfers were appropriate and properly recorded. However, we also identified risks in online processing activities at all the districts. For example, while we found varying levels of online banking controls in place at all six districts, five districts lacked a comprehensive online banking policy that clearly describes the district's online banking activities, identifies the employees who are authorized to perform them, and provides for verification of the accuracy and legitimacy of transfer transactions. We also found that four districts allowed employees to perform online transfers from non-district computers that are not subject to district security protections. It is also important that districts maintain adequate information technology controls that protect district computers from malicious software and allow access to district-approved websites. We found that one district lacked controls that help ensure employees access the internet in a safe and appropriate manner. Controls Over Online Banking in School Districts[complete audit - pdf]

Both BOCES have been generating significant and growing surpluses because they routinely overbill for CoSer services, and regularly have priced CoSer services higher than necessary to cover CoSer costs. We found that BOCES set tuition rates using historical enrollment rates rather than current year enrollment projections from districts. Additionally, BOCES do not make mid-year pricing adjustments based on actual program participation that would reduce overbilling. As a result, BT BOCES' surplus grew 45 percent (from $7.3 million to $10.5 million) and OU BOCES' surplus rose 141 percent (from $3.8 million to $9.1 million) between 2006-07 and 2008-09. We found that school districts served by BT and OU BOCES do not include significant surpluses, which averaged $500,000 per participating district in 2008-09, on their financial statements because neither BOCES provides individual districts with an estimate of their surplus refunds until mid-way through the next fiscal year. Finally, BT BOCES accumulated unreserved fund balance from one CoSer in violation of Education Law, and incorrectly reported these monies on its financial statements. BOCES Treatment of the Annual Surplus From CoSer Operations[complete audit - pdf]

Internal Controls Over Cash Disbursements
Our review of 75 payments totaling $273,000, made in September 2009, and 25 payroll disbursements totaling $29,000, made from July 1, 2009 to May 31, 2010, found no irregularities or inconsistencies between canceled checks and authorized warrants or certified payrolls. However, we found weaknesses in internal controls over cash disbursements which increase the risk of errors and improper payments. The Treasurer does not control her electronic signature or signature plate and, while she does receive the bank statements before sending them to BOCES for reconciliation to the District's accounting records, performs only a cursory review of them which is not sufficient to identify any discrepancies that could indicate improper payments. No one at the District verifies the reconciliation provided by BOCES against the bank statements and canceled checks. Additionally, the printed payroll checks cannot be checked for accuracy because they arrive at the District already sealed. District officials also do not receive and review change reports which would provide a compensating control. Oriskany Central School District[complete audit - pdf]

We found that the districts did optimize the use of OGS and/or BOCES contracts to procure goods and services in a cost-effective manner. We reviewed the purchases of 20 goods and services totaling $11.76 million during our audit period and found that the districts used OGS contracts (34 percent) or BOCES contracts (45 percent) for 16 purchases totaling $9.29 million (79 percent). The districts generally procured the remaining 21 percent of these purchases, totaling $2.47 million, by using a competitive bidding process, obtaining quotes prior to making the purchase, or, for some items (e.g., textbooks, software), purchasing from a sole source provider. Selected Central New York School Districts'[complete audit - pdf]

We found that LP-powered buses cost more than the diesel alternative. However, New York State currently provides NYSERDA grant funds to bridge the difference in cost. We also found that LP fuel costs - with help from a Federal tax credit - are lower, and that maintenance of LP buses is less expensive. However, paying for LP infrastructure (fueling stations) could add to a district's start-up costs for using LP buses. If government tax credits for LP-powered buses continue to be available, and if surcharges on diesel-powered buses continue to increase, LP-powered buses can be a lower-cost alternative to diesel-powered buses. LP fuel is also safer to use and store than diesel fuel. A Comparison of Liquid Propane-Powered and Diesel-Powered School Buses[complete audit - pdf]

Shared Transportation Facility
We calculated the difference between construction costs of two separate bus garages and of a shared transportation facility. Certain costs would be duplicated by building two separate bus garages. For example, with two bus garages, both Districts would be paying for land, site work, and architect and legal services. By having one shared facility these types of costs are reduced. Using the architect's cost projections, we estimate that by building a new shared facility instead of building separate facilities, the Districts could save taxpayers about $1.9 million just in construction costs alone. In addition, if the Districts could share buses, they would need fewer total buses. We estimate that they could collectively purchase one less bus each year and save about $100,000 annually. Colton-Pierrepont School District and Parishville-Hopkinton School District [complete audit - pdf]

Budget Review
Based on the results of our review we found that the significant revenue and expenditure projections in the tentative budget are reasonable. Patchogue-Medford Union Free School District [complete audit - pdf]

Internal Controls Over Financial Condition
The District has accumulated more than $2.6 million in excess reserves. District officials routinely overestimated expenditures and underestimated revenues even though data was available to develop more accurate budget estimates. As a result of these practices, the District generated more than $3 million in operating surpluses over a four-year period. Over the past four fiscal years, District officials have made more than $2.8 million in unbudgeted transfers to various reserves. As of June 30, 2010, balances in the District's seven general fund reserves totaled $6.6 million. Pavilion Central School District[complete audit - pdf]

Fund Balance and Reserves
We found that the Board and District officials have not properly managed fund balance in accordance with statute. The District has accumulated approximately $5.5 million in excess fund balance and unnecessary reserves that could be better used for the benefit of taxpayers. Because the Board and District officials routinely overestimated expenditures and underestimated revenues, the District generated operating surpluses totaling more than $2.7 million over the last five fiscal years. To stay within the legal limit for retaining fund balance, District officials transferred excess fund balance to various reserves at the end of the fiscal year. However, District officials did not disclose their intent to fund reserves during the budget process. Perry Central School District[complete audit - pdf]

Budgeting Practices
We found that the Board routinely adopted budgets that were realistic and supported for revenues, however expenditures were consistently overestimated. For example, we compared the District's budgeted expenditures with actual results for the last three fiscal years and found that the District overestimated expenditures by a total of $11.4 million. Additionally, during the same three-year period, the District's budgets included appropriated fund balance totaling $11,413,441, which should have resulted in operating deficits. In reality, the District's budget resulted in an operating surplus in each of the last three years. Therefore, none of the fund balance that was appropriated was actually used. These budgeting practices occurred even though the District's last three management letters from their independent auditors contained an audit comment to the Board that they over budgeted expenditures and they appropriated fund balance that was not used. Peru Central School District[complete audit - pdf]

Internal Controls Over Payroll
Although the payroll clerk has developed an informal system to process payroll, the Board has not established written policies and procedures for payroll processing, District officials have not adequately segregated payroll duties and each employee's responsibilities have not been defined. Management has not instituted mitigating controls, such as verification of payroll changes, or conducting a payroll audit. Phoenix Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Operations
The District has not administered Extra Classroom Activity (ECA) fund moneys, which totaled more than $318,000 in 2009-10, in accordance with its own regulations or those of the New York State Commissioner of Education. District officials failed to establish a standard workday by contract or Board resolution for 117 of 304 employees in seven job titles. Additionally, the District did not retain signed forms on file acknowledging New York State and Local Retirement System (NYSLRS) membership notification to 83 of the 100 optional employee files that we reviewed. The District also needs to improve its controls over information technology. Plainedge Union Free School District[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Pocantico Hills Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Putnam Valley Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Internal Controls Over Payroll
The District has established an adequate system of internal controls over payroll to safeguard District assets. District officials have implemented specific procedures to ensure that the individuals included on each payroll are bona fide District employees, are paid approved salaries and wages, and receive only those benefits to which they are entitled. Riverhead Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Transportation Contract
District officials have not solicited bids or obtained RFPs for transportation services since July 1992. For the past 18 years District officials extended the contract annually as it expired. However we found that District officials were generally unfamiliar with the terms of the contract, and never updated it to reflect changing conditions. In July 2010, District officials hired a transportation consultant (consultant) to determine if the contract was in the best interest of the District. The consultant informed District officials of the terms of the original contract and determined that extending the contract would be most beneficial to the District. While we are glad that the District's contract has been verified as reasonable, District officials could have ended up with a contract that was not a good deal for the District because they did not periodically use an RFP process and they were not aware of the terms of the existing contract. Roscoe Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Internal Controls Over Purchasing
Overall, we found that the District had established adequate internal controls over purchasing and that these controls were working effectively. Sachem Central School District[complete audit - pdf]

Non-Resident Tuition
The Board adopted a non-resident tuition rate of $3,000 per student for 2010-11. The maximum tuition the Board could charge according to the SED formula was $52,179 per student. In 2010-11, five of the District's 18 students were non-residents for whom the District billed and collected tuition totaling $15,000. We found no evidence that students from other districts significantly increase the District's costs. Therefore, while the District is not charging the SED approved rate, the tuition it is collecting helps cover a small portion of the District's costs. Sagaponack Common School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Financial Condition and Internal Controls Over Information Technology
The District's adopted budget for the 2007-08 fiscal year contained an inaccurate estimate of State aid revenues, in excess of the State Education Department's (SED's) published estimates. This resulted in an operating deficit of $1.9 million. Although the District had revenue shortfalls in the 2008-09 year, it did not have an operating deficit. However, the District again overestimated State aid in the 2009-10 fiscal year, which brought the total operating deficit to $1.5 million. These combined operating deficits reduced the unreserved fund balance in the District's general fund to a deficit of over $1.1 million at June 30, 2010. Further, as a result of revenue shortfalls, District officials found it necessary to issue a $3 million revenue anticipation note (RAN) in July 2009 and a $4.9 million RAN in June 2010 to meet cash flow needs during the 2009-10 and 2010-11 fiscal years. Finally, District management needs to improve controls over IT. Saugerties Central School District[complete audit - pdf]

Internal Controls Over Cash Receipts and Disbursements
The Board has not adopted sufficient formal policies and procedures that address the collection and deposit of all District moneys, online banking, and electronic and wire transfers. Consequently, District personnel did not issue pre-numbered receipts, as required, and did not deposit 20 of the 40 receipts, totaling $8,900, in a timely manner. In addition, the District did not have an online banking agreement with one bank that processes its electronic transfers, and its online banking agreement with the other bank was incomplete and contained deficiencies. Finally, we found no requirement for secondary or independent authorization for intra-bank transfers, and no written confirmations for four of the five inter-bank wire transfers that we tested. Schalmont Central School District[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Schuylerville Central School District[complete audit - pdf]

Transportation Costs and Financial Condition
The District could save $21,300 in salary-related costs annually and $98,000 for replacing a bus by consolidating and eliminating bus routes. It could also save $1,200 annually by using the State bid for diesel fuel. The District has failed to follow proper budgeting practices. As of June 30, 2009, the unreserved, unappropriated general fund balance totaled $1,021,550, which represented 10.8 percent of the $9.5 million in appropriations for 2009-10. This was approximately 2 1/2 times the amount allowed by law. Further, approximately $867,000 was held in reserves at June 30, 2009 that are funded in excess of documented needs. The 2009-10 fiscal year ended with an operating surplus of about $246,000. After transferring $529,728 into reserves, $394,000 into capital projects, and increasing the amount of fund balance appropriatied for the subsequent year's budget by $221,427, the unreserved and unappropriated fund balance decreased to $206,112, representing approximately 2 percent of the 2010-11 budget. However, approximately $700,000 was held in reserves at June 30, 2010 that continue to be funded in excess of documented needs. Scio Central School District[complete audit - pdf]

Internal Controls Over Selected Financial Activities
Internal controls over claims processing are appropriately designed, but are not always operating effectively. The claims auditor generally certified the warrants after checks were released and did not provide adequate documentation to indicate when she actually audited the District's claims. We also found that the District did not use a competitive RFP process for selecting audit firms at least every five years, as required by law. Scotia-Glenville Central School District[complete audit - pdf]

Energy Cost Savings
The District has been offered donated natural gas by the local landfill. The landfill is currently flaring (burning off) excess methane gas, which could be used to generate additional natural gas, with the installation of conversion equipment. The costs to the District of accepting this donated gas would include construction costs of laying pipeline to the gas supply and connecting to the Frank Knight Elementary school and the High School/Middle School campus. District officials indicated they will not accept this offer until they have determined that the initial outlay of capital required for the project will have a reasonable payback period, and that the landfill has acquired the equipment necessary to transform the methane gas into a useable supply, which is expected in 2012. The District annually spent an average of $19,500 on natural gas for the Frank Knight Elementary School and $65,300 for the High School/Middle School Campus. Thus, the District could save approximately $84,800 annually by accepting donated gas for the three schools. Seneca Falls Central School District[complete audit - pdf]

Internal Controls Over Purchasing
The District has comprehensive policies and procedures in place over the purchasing process. The District's procedures provide guidance to help ensure that the District obtains the best quality of goods and services at the lowest possible price. The District's purchasing process uses networked software to electronically initiate and process purchasing transactions. We examined 80 out of approximately 5,600 claims, totaling $1.7 million out of approximately $30 million. We did not find any material discrepancies in the claims we examined. Overall, we found that the District had established adequate internal controls over purchasing and that these controls were working effectively. Sherburne-Earlville Central School District [complete audit - pdf]

Internal Controls Over Cash Disbursements
We found that the internal controls over cash disbursements are appropriately designed and operating effectively. The District has established an adequate system of checks and balances for both accounts payable and payroll disbursements. Sherrill City School District[complete audit - pdf]

Financial Condition
The District's fund balance declined significantly from an unreserved general fund balance of approximately $4.1 million at June 30, 2006 to an unreserved fund deficit of approximately $2.8 million at June 30, 2008. This was a decline of approximately 167 percent. Although the District overexpended certain of its appropriations during the 2006-07 fiscal year, such as employee benefits by a total of $837,000, which reduced the unreserved fund balance to about $1.5 million, the deficit occurred primarily because the District did not receive approximately $3.3 million of prior years' State aid that it had expected to collect in the 2007-08 fiscal year, and about $1.8 million in 2008-09. However, by closely monitoring the budget, reducing expenditures, utilizing reserve funds, and increasing real property taxes, the District was able improve its financial position and achieve a positive $2.5 million fund balance at June 30, 2010. Shoreham-Wading River Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Internal Controls Over the Claims Audit Function and Information Technology
The Board did not appoint a claims auditor in accordance with State Education Department (SED) regulations. The Board appointed the Onondaga-Cortland-Madison Board of Cooperative Educational Services (OCM BOCES) Central Business Office to serve as the District's claims auditor for the 2008-09 and 2009-10 fiscal years. However, this arrangement is specifically prohibited by SED regulations. In addition, the Board appointed a District employee as deputy claims auditor to audit District claims payable to OCM BOCES. There is no authority in Law to appoint more than one claims auditor. We reviewed 20 claims totaling $573,663 to ensure the claims were proper and supported. We did not find any material discrepancies. In addition, the Board has not established written policies and procedures that address computer user access, monitoring activity through audit logs and change reports, or disaster recovery. Solvay Union Free School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Enrollment and Billing
We found that the School accurately billed the school districts of residence and, overall, the School maintained adequate supporting documentation. However, our review identified some issues with proof and/or verification of current residence. For example, five students did not have proof of residence documentation on file. South Buffalo Charter School[complete audit - pdf]

We found that school districts can improve controls over their online banking processes. Our tests of 1,817 online transfers at these six districts found that all the transfers were appropriate and properly recorded. However, we also identified risks in online processing activities at all the districts. For example, while we found varying levels of online banking controls in place at all six districts, five districts lacked a comprehensive online banking policy that clearly describes the district's online banking activities, identifies the employees who are authorized to perform them, and provides for verification of the accuracy and legitimacy of transfer transactions. We also found that four districts allowed employees to perform online transfers from non-district computers that are not subject to district security protections. It is also important that districts maintain adequate information technology controls that protect district computers from malicious software and allow access to district-approved websites. We found that one district lacked controls that help ensure employees access the internet in a safe and appropriate manner. Controls Over Online Banking in School Districts[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Budgeting Practices
The Board routinely adopted budgets that were conservative, particularly for expenditures. For the last five fiscal years, the District overestimated expenditures by a total of approximately $4.8 million. The conservative budget estimates resulted in revenues exceeding expenditures by approximately $2.8 million over the last five years. Furthermore, the District's spending plans made it appear that the District would appropriate a portion of its accumulated fund balance each year to close projected budget gaps. In reality, the District's budget resulted in an operating surplus in the last five completed fiscal years (as shown in Table 1) and no fund balance was ever used as a source of financing in those years. Stillwater Central School District[complete audit - pdf]

Internal Controls Over Information Technology
District officials have not established adequate internal controls to effectively safeguard the District's computer system and data. The District has not established breach notification or disaster recovery policies. It also does not have effective policies and procedures in place regarding remote access, and there is inadequate security for its server and wiring closets. Finally, the IT system administration duties are performed by an individual who also performs financial duties. These duties are incompatible. Taconic Hills Central School District[complete audit - pdf]

Debt Refinancing
District officials did not provide us with any documentation to show that they performed the necessary analysis of potential debt refinancing measures that may have identified ways to reduce interest costs over the life of the District's debt. Union Free School District of the Tarrytowns[complete audit - pdf]

Follow Up
Of the 16 audit recommendations, nine recommendations were implemented, two recommendations were partially implemented and five recommendations were not implemented. Union Free School District of the Tarrytowns[complete audit - pdf] | [2008 audit report - pdf]

Budget Review
Based on the results of our review, we found that the significant revenue and expenditure projections in the proposed budget are reasonable. Enlarged City School District of Troy[complete audit - pdf]

Financial Condition and Special Education Services
We found that District officials adopted budgets that were overstated during the 2008-09 and 2009-10 fiscal years and maintained inaccurate account balances in the District's accounting records at the end of the year. As a result, the District had more than $9 million in unreserved fund balance in the general fund at June 30, 2010. This represents approximately 39 percent of the $23.1 million total appropriations for the 2010-11 fiscal year and approximately $8.1 million more than the amount allowed by law. In addition, the District does not submit claims for Medicaid reimbursement. We determined that, if the District submits Medicaid claims for reimbursement going forward, it could enhance its revenue by $244,707 over the next three years. Alternatively, the District would save $224,292 over the next three years if it continued with the decision to not submit claims for services provided and discontinued its service contracts with BOCES. Trumansburg Central School District[complete audit - pdf]

We found that LP-powered buses cost more than the diesel alternative. However, New York State currently provides NYSERDA grant funds to bridge the difference in cost. We also found that LP fuel costs - with help from a Federal tax credit - are lower, and that maintenance of LP buses is less expensive. However, paying for LP infrastructure (fueling stations) could add to a district's start-up costs for using LP buses. If government tax credits for LP-powered buses continue to be available, and if surcharges on diesel-powered buses continue to increase, LP-powered buses can be a lower-cost alternative to diesel-powered buses. LP fuel is also safer to use and store than diesel fuel. A Comparison of Liquid Propane-Powered and Diesel-Powered School Buses[complete audit - pdf]

Internal Controls Over the Internal Audit Function and Information Technology
We found that the Board did not establish an internal audit function as required by Education Law. First, in February 2007, the Board appointed a local CPA firm as their internal auditors without seeking the competitive proposals that are legally required. Further, despite the fact that the Board paid the CPA a nominal fee in 2007, and reappointed the same CPA firm as internal auditors from 2008 through 2010, the Board never required an actual annual risk assessment, audit plan or actual internal audit to be performed. In addition, although procedures have been developed for establishing and disabling user accounts, the procedures do not address the timeliness of disabling the accounts, and management does not monitor the roster of network users to ensure that user accounts have been disabled in a timely manner. Tupper Lake Central School District[complete audit - pdf]

We found that LP-powered buses cost more than the diesel alternative. However, New York State currently provides NYSERDA grant funds to bridge the difference in cost. We also found that LP fuel costs - with help from a Federal tax credit - are lower, and that maintenance of LP buses is less expensive. However, paying for LP infrastructure (fueling stations) could add to a district's start-up costs for using LP buses. If government tax credits for LP-powered buses continue to be available, and if surcharges on diesel-powered buses continue to increase, LP-powered buses can be a lower-cost alternative to diesel-powered buses. LP fuel is also safer to use and store than diesel fuel. A Comparison of Liquid Propane-Powered and Diesel-Powered School Buses[complete audit - pdf]

We found that LP-powered buses cost more than the diesel alternative. However, New York State currently provides NYSERDA grant funds to bridge the difference in cost. We also found that LP fuel costs - with help from a Federal tax credit - are lower, and that maintenance of LP buses is less expensive. However, paying for LP infrastructure (fueling stations) could add to a district's start-up costs for using LP buses. If government tax credits for LP-powered buses continue to be available, and if surcharges on diesel-powered buses continue to increase, LP-powered buses can be a lower-cost alternative to diesel-powered buses. LP fuel is also safer to use and store than diesel fuel. A Comparison of Liquid Propane-Powered and Diesel-Powered School Buses[complete audit - pdf]

Internal Controls Over Online Banking and Personal, Private, and Sensitive Information
The District did not have a banking agreement with each bank that it uses for electronic transfers. In addition, the Treasurer's method of accessing the banking websites is not secure. As a result, District funds are at risk of loss and misuse. Based on our testing, we found no inappropriate or unauthorized transfers of District funds. In addition, District officials have not developed procedures to properly sanitize computer equipment before disposal. As a result, personal, private and sensitive information under the District's control is at risk of misuse. Voorheesville Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Internal Controls Over Financial Operations
The Board did not fully comply with the requirements of the 2005 School District Accountability Legislation. Specifically, one Board member did not obtain the required training as to his financial oversight responsibilities. Although the Board did appoint a claims auditor, she did not report directly to the Board or perform a satisfactory audit of claims. We also found that the Business Manager circumvented the Board's policy by making budget transfers totaling approximately $1.1 million, without obtaining the required Board approval. In addition, internal controls over financial operations are inadequate. For example, the Board's policy manual does not provide for the proper segregation of duties and Business Office employees have the ability to circumvent any internal controls in place. Finally, employees have received buy-out and longevity payments totaling $59,670 to which they may not have been entitled. Waterford-Halfmoon Union Free School District[complete audit - pdf]

Electronic Document Distribution and Purchasing
The District could achieve cost savings and reduce its impact on the environment by distributing more information, such as the annual school calendar, staff directory, school newsletters and student progress reports electronically rather than using the traditional paper method. For example, we determined that the District could have realized cost savings of approximately $18,500 by providing its 2009-10 calendar information in an electronic format. In total, we estimated that the District could save approximately $24,000 annually and be more environmentally friendly by distributing certain information in an electronic format. In addition, the Board and District officials did not effectively monitor District purchasing. Waterloo Central School District[complete audit - pdf]

Information Technology Controls in School Districts
The vulnerabilities we identified in the audits are not discussed in these reports due to the sensitivity of this information. Rather, we have communicated our findings separately to District officials so they could take corrective action. Watertown Central School District[complete audit - pdf]

Energy Management
District administration and management have taken a number of steps to reduce utility expenditures in the District's three main buildings which have resulted in a reduction in the kilowatt hours (kWh) and therms used to facilitate normal day-to-day operations. The District's reduction of energy consumption also reduced total utility expenditures, despite the fact that, according to the New York State Energy Research and Development Agency (NYSERDA), since 2003, the price of natural gas has increased by 123 percent and the price of electricity has increased by 32 percent. Wayland-Cohocton Central School District[complete audit - pdf]

Controlling Payroll and Overtime Costs
We found internal control weaknesses within the District’s payroll processing including advance salary payments to most regular employees, which necessitated recovery of $8,064 from employees who did not work the entire pay period, and circumvention of post-retirement earnings limitation statutes by delaying the payment of $13,388 in wages to a retiree. District officials also have not established effective policies and procedures to monitor and control overtime costs and to ensure that only necessary overtime hours are incurred. In addition, they have not established policies and procedures for maintaining sufficiently detailed timekeeping records. As a result, District officials do not effectively monitor the use of overtime and the District incurred over $1.8 million of overtime costs over two fiscal years for which the District did not require written pre-approval, supporting documentation, and verification of time worked. We identified potential annual cost-savings opportunities of at least $80,000 if the District better controlled its overtime. Webster Central School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]

Financial Condition and Business Office Cost Savings
District officials consistently overestimated certain budgeted appropriations, which resulted in operating surpluses totaling $2 million for the three year period ending June 30, 2010. To stay within the legal limit for retaining fund balance, District officials transferred excess fund balance to its reserves at year-end. These transfers were not part of the budget process, and taxpayers were therefore unaware that they had occurred. The District's Employee Benefit Accrued Liability Reserve was overfunded by $1.7 million at June 30, 2010. The District also funded four additional reserves that had questionable balances totaling $1.2 million at June 30, 2010. We also found that the District's outsourcing of their accounts payable service to BOCES cost over $45,000 more during 2009-10 than if the District had performed this function in-house. In addition, the District's internal controls over the check signing process were reduced by transferring this function to BOCES. Westfield Academy and Central School District[complete audit - pdf]

We found that the districts did optimize the use of OGS and/or BOCES contracts to procure goods and services in a cost-effective manner. We reviewed the purchases of 20 goods and services totaling $11.76 million during our audit period and found that the districts used OGS contracts (34 percent) or BOCES contracts (45 percent) for 16 purchases totaling $9.29 million (79 percent). The districts generally procured the remaining 21 percent of these purchases, totaling $2.47 million, by using a competitive bidding process, obtaining quotes prior to making the purchase, or, for some items (e.g., textbooks, software), purchasing from a sole source provider. Selected Central New York School Districts'[complete audit - pdf]

We found that the districts did optimize the use of OGS and/or BOCES contracts to procure goods and services in a cost-effective manner. We reviewed the purchases of 20 goods and services totaling $11.76 million during our audit period and found that the districts used OGS contracts (34 percent) or BOCES contracts (45 percent) for 16 purchases totaling $9.29 million (79 percent). The districts generally procured the remaining 21 percent of these purchases, totaling $2.47 million, by using a competitive bidding process, obtaining quotes prior to making the purchase, or, for some items (e.g., textbooks, software), purchasing from a sole source provider. Selected Central New York School Districts'[complete audit - pdf]

Audit Follow-Up
Based on our limited procedures, it appears that the District has made significant progress in correcting the problems we identified in our initial report. Of the 35 audit recommendations, 32 recommendations were implemented, two recommendations were partially implemented, and one recommendation was not implemented. William Floyd Union Free School District[complete audit - pdf] | [2006 audit report - pdf]

Internal Controls Over Information Technology and Online Banking
We found that the District has not established sufficient controls over its IT system. District officials have not established a formal security plan, do not adequately monitor system activity, and have not established appropriate controls over remote access and backing up system data. In addition, the Board has not established a formal online banking policy and procedures governing electronic and wire transfers. The Business Manager serves as the online banking contact/administrator for all of the District's online banking activity and has online access to the bank accounts for transactional purposes. However, she also records transactions and has the responsibility for monitoring all electronic banking activity with limited oversight by other District officials. With these incompatible duties, the Business Manager could initiate an online wire transfer to an unauthorized bank account without immediate detection. Windham-Ashland-Jewett Central School District[complete audit - pdf]

Financial Condition
We found that the District's deficits were overstated and that the District's financial condition is much better than has been reported. This error occurred because District officials did not accurately calculate and report the District's liability for compensated absences, which resulted in overstated general fund deficits. It appears that the District will end the 2009-10 school year with no accumulated deficit. Additionally, the District's 2007-08 and 2008-09 budgets knowingly did not include accurate State aid revenue estimates. Finally, District officials did not prepare a budget of revenues anticipated for the school lunch fund; as a result it has had an ongoing deficit in its school lunch fund. Wyandanch Union Free School District[complete audit - pdf]

We used computer-assisted techniques to compare the names of 22,422 retirees and dependents whose health insurance benefits were paid by the 20 districts to the records in the Death Master File (DMF), which is maintained by the Social Security Administration (SSA). The DMF includes more than 87 million records of deaths that have been reported to the SSA. SSA compiles the list to ensure that all those receiving Social Security benefits are entitled to them, and are still living. Our test showed that 10 districts had paid health insurance premiums for only 27 ineligible individuals, including 18 retirees, eight dependents, and one surviving spouse. Twenty-four of the individuals had died within the past three years, while one had died in 2007, a second in 2005 and a third retiree had died in 1999. These 10 school districts paid a total of $240,668 for deceased retirees' and dependents' insurance coverage, or less than four hundredths of a percent of the $693 million paid to health insurance providers for their current and retired employees. Health Insurance for Retirees – Limiting the Costs of Providing Benefits[complete audit - pdf]