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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

COMMUNITY Charter School – Conflict of Interest Policy (2012M-60)


Released: June 15, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the School's process of addressing potential conflicts of interest for the period July 1, 2007, to March 12, 2012.

Background

The COMMUNITY Charter School is located in Erie County. The School is governed by a Board of Trustees that currently has six members. The Board appoints a Principal, who is responsible, along with the Business Administrator and other administrative staff, for the day-to-day management of the School under the direction of the Board. The School's operating expenses for the 2010-11 fiscal year were approximately $3.7 million.

Key Findings

  • The former Board President engaged in business transactions with the owner of a construction company to which the School has paid $2.4 million since 2007. The Board, however, did not follow the School's conflict of interest policy because it did not determine whether this relationship resulted in a conflict of interest as the policy requires.
  • School officials did not use competitive procedures to obtain these construction services, and did not produce a written contract that stated the scope of the work or the basis of payment.

Key Recommendations

  • Ensure that officials comply with the conflict of interest policy.
  • Ensure that the School obtains contracted services at the most favorable terms and conditions. Consider revising the School's by-laws to include the use of competitive processes for such procurements. Ensure that the Board enters into and has available written contracts that clearly define the scope of services to be provided and the terms and conditions for payment.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236