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]
Read Related Letters to: Broome-Delaware-Tioga BOCES [pdf] | Orange-Ulster BOCES [pdf]

Segregation of Duties
The Consortium Treasurer's cash disbursement duties are not adequately segregated. In addition to receiving and paying claims invoices, the Treasurer records those transactions and maintains custody of all Consortium cash assets. She also executes all electronic transfers of Consortium moneys. Although the Administrator verifies the activity listed in each month's bank statement, this will detect issues only after they arise. Further, the Administrator is an employee of the law firm, whose salary is paid through the claims audit process, thus providing an interest in the claims he is reviewing. Finally, because the Treasurer does not maintain Consortium cash records, Consortium officials were unable to verify that the cash balances per the bank statements were accurate. In fact, the Treasurer could not provide us with any cash records to verify that cash was properly accounted for. This is a significant deficiency, being that the Consortium is responsible for safeguarding over $95 million in Participants' contributions. Broome-Tioga-Delaware County Health Insurance Consortium[complete audit - pdf]

Use of New York State and Board of Cooperative Educational Services Contracts
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]
Read Related Letters to: Central Square [pdf] | Jamesville-Dewitt [pdf] | Oneida [pdf] | Oswego [pdf] | West Genesee [pdf] | Whitesboro [pdf]

The Law and regulations exist to ensure that consumers can rely on the accuracy of vendor scales and other weighing and measuring devices, and can expect to pay advertised prices for their purchases. However, two of the six counties we audited did not comply with inspection requirements, and three counties failed to perform any price accuracy tests; therefore, consumers in some counties have little assurance that the goods they buy are correctly weighed or accurately priced. Counties can do a better job of protecting consumers by maintaining up-to-date inventories of retail businesses for both inspection and price testing purposes, and by documenting inspection and test results. It is also important that counties maintain complete records of the complaints they receive, and the actions they take to address them, so consumers can be confident that their concerns are investigated and resolved. Consumer Protection: Accuracy of Weights and Measures[complete audit - pdf]
Read Related Letters to: Broome County [pdf] | Clinton County [pdf] | Dutchess County [pdf] | Ontario County [pdf] | Schoharie County [pdf] | Tompkins County [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]
Read Related Letters to: Greater Amsterdam School District [pdf] | Highland Falls-Fort Montgomery Central School District [pdf] | Longwood Central School District [pdf] | Marcellus Central School District [pdf] | Oneonta City School District [pdf] | South Colonie Central School District [pdf]

Claims Processing in the Western Region of New York State
We reviewed all 166 claims, totaling $19.3 million, generated by these 21 projects and found that all payments made for these claimed expenses were for appropriate highway-related projects costs and were made in accordance with project specifications. As a result, taxpayers have assurance that ARRA funds are being used to pay for legitimate highway project costs. Federal Stimulus Program[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]
See related letters to: Central Islip Union Free School District [pdf], Huntington Union Free School District [pdf], Ithaca City School District [pdf], Kenmore-Tonawanda Union Free School District [pdf], Lakeland Central School District [pdf], Lindenhurst Union Free School District [pdf], Long Beach City School District[pdf], Mamaroneck Union Free School District [pdf], Massapequa Union Free School District [pdf], Port Washington Union Free School District [pdf], Ramapo Central School District [pdf], Rochester City School District [pdf], Sachem Central School District [pdf], Saratoga Springs City School District [pdf], Smithtown Central School District [pdf], Somers Central School District [pdf], South Country Central School District [pdf], Washingtonville Central School District [pdf], Westbury Union Free School District [pdf], Yonkers City School District [pdf]

We found that Court personnel in the Town of Phelps managed their Court well. However, we identified deficiencies in depositing, reconciling, or reporting of Court moneys in the other three Courts. The Justice in one Court told us that he performed monthly bank reconciliations, but he had no records to document that he had performed reconciliations or accountability analyses. Court personnel in the other two Courts did not deposit approximately $31,345 in a timely manner, did not perform monthly reconciliations of bank to book balances, and did not maintain accurate bail listings. Justices in the same two Courts had not properly segregated incompatible duties or established adequate procedures for reviewing the Court clerks’ work. One of these Courts also was late in filing the monthly report to the JCF in 22 instances. Internal Controls Over Selected Justice Courts’ Financial Activities[complete audit - pdf]
Read Related Letters to: Town of Junius [pdf] | Town of Phelps [pdf] | Town of Romulus [pdf] | Town of Tyre [pdf]

We found that the six counties generally used reasonable measures to ensure they saved money on nursing home drug purchases. The two counties that used bulk purchase methods to obtain their nursing home prescription drugs made economical purchases. Of the four counties that procured drugs from vendors on an individual prescription basis, we found that Suffolk County, which obtained a vendor using a request for proposals (RFP) process, and Livingston County, which used competitive bidding, paid less than the State contract prices for 90 percent and 57 percent, respectively, of the 30 drugs we tested. The other two counties paid slightly more than the OGS contract prices. We estimate that Onondaga County, which obtained its vendor using an RFP process, could have saved about $10,600, while Rensselaer County could have saved about $43,500 on total drug expenditures in 2009 by purchasing from the OGS contract. Saving Money on Nursing Home Drug Purchases[complete audit - pdf]
Read Related Letters to: Livingston [pdf] | Monroe [pdf] | Onondaga [pdf] | Rensselaer [pdf] | Rockland [pdf] | Suffolk [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]
Read Related Letters to: Bainbridge-Guilford Central School District [pdf] | Ithaca City School District [pdf] | Owego-Apalachin Central School District [pdf] | Trumansburg Central School District [pdf] | Union-Endicott Central School District [pdf] | Vestal Central School District [pdf]

Internal Controls Over Dependent Eligibility
Our review of the files of a sample of 52 dependents, selected randomly from the 1,149 dependents enrolled in the Plan, found no evidence of any documentation showing that these dependents met any of the eligibility criteria. Of the 52 dependents tested, 13 individuals (25 percent) could not provide evidence of dependent status, and are potentially ineligible for coverage by the Plan. Participants lacked such documentation because none of the Boards have adopted policies that require verifying dependents’ eligibility before enrolling them in the Plan and procedures for monitoring eligibility status. Based on a $2,000 to $5,000 annual savings per dependent and our 25 percent exception rate, the potential savings in Trust expenses could range from $574,500 to $1,436,250 annually. Wayne County Employee Health Care Plan Trust Participants[complete audit - pdf]
Read Related Letters to: Town of Butler [pdf] | Town of Palmyra [pdf] | Town of Rose [pdf] | Town of Savannah [pdf] | Wayne County [pdf] | Wayne County Water and Sewer Authority [pdf]