FOR RELEASE:

The Lawrence, Manhasset and Hempstead school districts in Nassau County and the Brentwood school district in Suffolk County will be the subject of in-depth audits by the New York State Comptroller's Office, Comptroller Alan G. Hevesi announced today. A fifth audit will examine administrative expenses in at least 15 other districts, including East Meadow, Locust Valley, North Shore, Plainedge, Syosset, and Westbury in Nassau and Three Village, Central Islip and Wyandanch in Suffolk. A process is underway to select the remaining districts for the fifth audit.

“I promised three weeks ago that by the beginning of August, my Office would begin five school district audits on Long Island in response to the scandals in the Roslyn and William Floyd school districts,” Hevesi said. “I believe that most school district officials are honest, hard-working professionals and most schools are well-managed. But the public clearly needs assurance that their school dollars are being spent properly. We are conducting these audits to help restore public confidence in the schools and to identify problems and mismanagement.

“We received information about 30 school districts and we chose to look at the ones where an audit seemed most likely to be useful,” Hevesi said. “But allegations are just that, allegations. I have no knowledge that anyone in any of these districts has done anything improper and no one should jump to any conclusions. It is my hope that these audits will be useful in improving operations, but will find no impropriety. However, if there is wrongdoing, we will expose it and will hold accountable those who are responsible. We will refer any potentially criminal issues to District Attorneys Denis Dillon and Thomas Spota and cooperate with them to support the excellent work they are doing.”

The four audits of specific school districts will review in detail internal controls over all basic financial operations - purchasing, payroll, cash collections, accounting, etc. ¾ and include significant testing of individual transactions in each of these areas. The fifth audit will look at the administrative expenses such as credit card usage, meals and travel in at least 15 districts.

“Even the most detailed audit is not a guarantee of protection against fraud and mismanagement. It can only work when it is one part of a layer of good management. The best protection is effective internal controls inside the school district. That's why we are quickly implementing the training program that I announced three weeks ago,” Hevesi said.

The Comptroller's training program includes the following components:

• Working cooperatively with the New York State School Boards Association (NYSSBA), Council of School Superintendents (NYSCOSS) and Association of School Business Officials (NYSABO), the Office of the State Comptroller (OSC) will participate in up to 20 hands-on training seminars during the 2004-05 school year. OSC staff will deliver training in the areas of internal controls, fraud prevention and detection, and auditing standards.
  
• OSC will co-sponsor a special seminar at the Council of School Superintendents state meeting in Saratoga Springs on September 21, where the Comptroller will deliver a keynote address on ethics and accountability.
  
• OSC will co-sponsor a conference entitled “Preserving the Public's Trust” with the Nassau-Suffolk School Board Association, the Nassau County Council of School Superintendents and the Suffolk County School Superintendents Association on Long Island on October 5. The Comptroller will speak on governance and accountability issues at the conference
  
• A statewide public teleconference for school board members and superintendents sponsored by OSC on “Leadership and Accountability: Preventative Medicine for Fraud” is scheduled for October 26, featuring remarks from the Comptroller and a panel of experts.
  
• OSC will update its training manuals and reference guides for use by school business officials and help to develop “sensible practices” materials for school superintendents and school board members.

The State Education Department (SED) and OSC are meeting to review existing regulations regarding the mandatory independent audits required of every school district. Additionally, under OSC's leadership, a working group composed of staff from SED, NYSCOSS, NYSSBA, NYSASBO and the State Society of Certified Public Accountants is meeting to develop a specific set of recommendations for strengthening auditing, training and financial oversight by school district officials and their boards. Areas under discussion include:

• Enhanced annual financial audit standards.
• Expanded internal control auditing and training by OSC and SED.
• Creation of school district audit committees.
• Selection and rotation of audit firms.
• Mandatory and recommended financial training for school officials.
• Ethics and disclosure standards.

Background on the four districts:

• Lawrence's 2003-2004 budget was $85.3 million. It has seven schools, 3,714 students and spent $20,303 per pupil, according to its 2004 report card.
• Hempstead's 2003-2004 budget was $110 million. It has 12 schools, 6,940 students and spent $15,091 per pupil, according to its 2004 report card.
• Manhasset had a 2003-2004 budget of $63.2 million, four schools, 2,624 students and spent $22,311 per pupil, according to its 2004 report card.
• Brentwood had a 2003-2004 budget of $209.2 million, 18 schools, 16,138 enrolled students, and an expenditure rate per pupil of $11,943 in 2004.

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