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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Poughkeepsie City School District – Internal Controls Over Purchasing and Claims Processing (2012M-179)


Released: January 11, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine internal controls over claims processing and purchasing for the period July 1, 2010, to March 31, 2012.

Background

The Poughkeepsie City School District is located in the City of Poughkeepsie, in Dutchess County. The District is governed by the Board of Education which comprises five elected members. The District’s budgeted general fund expenditures for the 2010-11 and 2011-12 fiscal years were $81.2 million and $81.4 million, respectively.

Key Findings

  • The District spent more than $50,000 on a contract with a certified public accountant (CPA) to provide services as the District’s claims auditor and the CPA did not perform the services in accordance with the obligations set forth in the contract. Of the 50 claims we reviewed, 29 claims totaling $210,190 were approved without the necessary documentation to support the claim being audited.
  • The District purchased services for web hosting, spam, and virus filtering totaling $8,205 from a company owned by a District employee. Although this did not result in a prohibited conflict of interest, the employee did not disclose his interest in the company in writing to the supervisor or the Board as required by law.
  • District staff made purchases totaling $110,010 that did not comply with District policies and may not be the most economical use of taxpayer moneys.
  • 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.

Key Recommendations

  • Consult with its attorney to determine if the District can recover moneys paid for claims auditing services that were not properly rendered by the CPA firm. Ensure that all claims contain sufficient documentation prior to approving the claims for payment.
  • Publicly disclose, in writing, an interest in a District contract to an immediate supervisor and to the Board.
  • Ensure that purchasing policies and procedures are effectively communicated to all involved employees.
  • Periodically review computer system access rights and ensure that no employee has access to areas not required for their job.

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