FOR RELEASE:

Miller Place School Overall Generally Well Managed,
but Audit Identifies Some Areas for Improvement

The Miller Place School District has made positive changes to improve financial management and limit spending, according to an audit released today by New York State Comptroller Alan G. Hevesi. Auditors also identified areas for improving policies for spending on travel, lodging, meals and other expenses.

The audit, which covered the period of July 1, 2002 to August 31, 2004, examined administrative expenses for the school district. The audit stemmed in part from a petition of 600 district residents requesting an outside examination of the district's business practices. This is the 12 th audit completed by the Comptroller's office of Long Island school districts.

“The best way to fight fraud is to develop strong financial checks and balances and regularly check to ensure they are being followed,” Hevesi said. “I commend the Miller Place School Board for responding quickly to the audit findings, improving their control procedures and developing new policies. I urge the board to be vigilant in their fiscal oversight responsibilities and carefully monitor these new policies.”

In their response to the audit, President of the Miller Place School District Board of Education Claire Mangelli and Superintendent Donald K. Carlisle, Ed.D., said “We take your findings seriously, and are grateful that the audit report contains suggestions that could further strengthen our already established and implemented internal controls, policies and procedures.” Their full response is included in the audit.

Findings include:

• Credit Card Charges. The district paid about $46,000 for credit card expenses. Auditors found that the district had assigned credit cards to particular staff and established limits on the cards as far back as 2001, but had no policy on how the cards could be used. Of the claims tested, auditors found that 89 of 244 charges either did not have supporting documentation or did not provide adequate justification for the purchases, such as $1,900 for a cupboard and benches, storage containers for $148 and a leather journal for $89. Auditors also questioned whether the superintendent's purchase of two leather briefcases for $353 on his district credit card was a personal expense. Auditors recommended that the district closely examine this expense.
• Travel for District Managers and Board of Education Members. More than $53,000 was spent on travel related expenses. While the district required travelers to attach supporting documentation to expense claims, officials did not always follow these procedures. The district also had no limit on what officials could spend on meals or lodging. For instance, auditors found that 25 of 29 expense claims for lodging exceeded the federal per diem up to $145 per night.
• Meals. $21,800 was spent on meals and refreshments at 265 events. No supporting documentation was provided to indicate why these expenses should be paid by the district, nor did the district have a policy governing spending on meals.
• Cell Phone Usage. The district spent about $40,000 on 39 cell phones. While the district received some reimbursement for personal calls, auditors found that the district did not have a written policy for cell phone use or monitor whether personal calls had been made.
• Taxpayer Complaint Regarding Rumor of Cushioned Pension. Auditors looked into a complaint that the recent 35 percent tax increase within the last two years was used to pay for "a golden parachute" that someone retired with. However, auditors examined employment and termination agreements and found that no senior-level administrators had retired within the 26-month audit period. Therefore, auditors did not find any information to substantiate the golden parachute rumor.

Auditors noted that the district responded promptly to the audit findings and improved their internal controls, including adopting policies for cell phones, travel and meals. In addition, the district detailed the duties of the internal claims auditor and adopted a new credit card policy.

Auditors recommended that the board of education:

• Review the superintendent's purchase of leather briefcases with his district credit card and recover the cost of the items if they were determined to be personal expenses.
• Require adequate documentation for each expense claim in order to verify that it was a necessary expense.
• Set limits for what it will spend on lodging.
• Ensure that new policies are enforced.

The Miller Place School District has approximately 3,300 students, four educational buildings and about 350 employees. Its 2004-05 operating budget is $46 million.

Click here for a copy of the audit

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