|
Central Islip School
District Audit Identifies Excessive Spending on Travel, Lax Controls
and Policies
The Central Islip school district paid for excessive, questionable
and unsupported travel and other expenses for school board members,
including a $399 per night hotel suite and extended trips at out-of-state
conferences, according to an audit released today by New York State
Comptroller Alan G. Hevesi. Auditors found that the district lacked
basic internal financial controls, had inadequate policies governing
spending and had few receipts to verify expenses.
The audit findings have been referred to the office of Suffolk County
District Attorney Thomas J. Spota.
The audit specifically identified $75,581 dollars of questionable
expenses including:
- $56,620 in credit card charges not supported by receipts or invoices;
of these, $9,500 could not be traced to a legitimate business purpose
and $3,258 was spent on extended travel at out-of-state conferences.
- $8,326 in payments improperly made to the superintendent and assistant
superintendent as reimbursement for vacation time. As a result
of the audit, the district recovered these funds.
- $6,900 in payments for mileage reimbursement that lacked detailed
information to justify that travel was for school purposes.
- $3,735 spent on internet and phone service for board members
In addition, auditors found that the district spent $57,430 on expenses
for which there were no policies, including:
- $28,430 spent on meals and refreshments at school meetings and events
with no supporting documentation
- $29,000 spent on cell phones.
“The lack of accountability at the Central Islip schools puts
the district at substantial risk for wrongdoing,” Hevesi said. “There
was so little documentation that auditors could not determine whether
expenses were legitimate or not and the Central Islip school board
failed to meet its fiduciary responsibilities to taxpayers. The level
of questionable spending may not reach the magnitude of other Long
Island districts, but poor internal controls can lead to larger problems
down the road. I urge district officials to take decisive action to
properly safeguard taxpayer money and significantly improve internal
controls. To this moment, they have not committed to do so in spite
of their receipt of the draft of this audit. We will return within
one year to see if critical reforms have been implemented.”
The audit covered the period of July 1, 2002 to August 31, 2004 and
examined administrative expenses for the school district and complaints
from local residents regarding questionable expenses of board members.
For the majority of the audit period, Jerry Jackson was the superintendent
until Fadhilika Atiba-Weza took this position in June 2004. This is
the 13th school district to be audited on Long Island by the Comptroller’s
office and another 10 audits are pending.
Auditors found that the district had no policy for credit card use.
In fact, the superintendent and board members had not attached any
receipts to credit card claims totaling $82,873. Officials later supplied
some documentation to auditors, but no receipts could be found for
about 68 percent ($56,620) of the charges. While auditors were able
to match most of the undocumented credit card charges to conferences
that officials attended, they could not verify that all these charges
were business-related because of the lack of documentation.
At least another $9,500 in credit card charges could not be traced
to any legitimate business purposes. For example, a board member charged
$1,726 for trips to Rochester and Albany, including $47 charged at
the Egg, a performing arts venue in Albany. No explanation was provided
for these trips, and auditors found no indication that school conferences
were being held in these cities at the time these trips were taken.
Auditors also noted that the district had no limit on what officials
could spend on meals or lodging and found that some board members charged
excessive travel costs to the district. For instance, in March 2004
one board member reserved a two-bedroom hotel suite in Orlando costing
$399 per night, while other board members reserved hotel rooms costing
between $179 and $289 a night even though the conference brochure identified
23 conference hotels in Orlando costing from $79 to $222 per night.
The federal per diem lodging rate for Orlando was $95 per night. Auditors
found that the district improperly paid $3,258 for board members to
stay extra days before and after conferences and paid unnecessary costs
for rental cars.
Other findings include:
- Weaknesses in Internal Claims
Audit Process. The business administrator
overruled the decision of the internal claims auditor to deny 11
reimbursement claims by board members because of a lack of documentation.
In addition, the district paid 23 claims totaling $82,873 in credit
cards expenses even though there were no receipts to support the
more than 500 charges made. The internal claims auditor indicated
that she did not require receipts or explanations for expenses,
and approved credit card claims if they contained the superintendent’s
signature.
- Improper Payment of Vacation Time. The current superintendent was
paid $4,000 for unused vacation days not provided under his contract.
In addition, the former assistant superintendent was allowed to
cash in $10,982 worth of vacation time even though a collective
bargaining agreement specified that he was eligible to cash in
$6,656, resulting in an overpayment of $4,326. The district later
recovered these funds from the superintendent and assistant superintendent.
- Questionable Mileage Reimbursements. Auditors also found that $6,900
of mileage claims from board members generally did not include
where travel started and stopped, or the purpose of the trips.
For instance, in one month, one board member claimed between
20 and 60 miles each day, with the exception of five days, with
no details other than miles driven.
- No Internet and Phone Service
Policy for Board Members. While no
policy existed on providing phone and Internet service to board
members, the district reimbursed four members about $3,735 for
personal phones and Internet service.
- No Policy for Meals. $28,430 was spent on meals and refreshments
at 186 meetings and events. The district did not have a policy
governing spending on meals, and generally no supporting information
was provided to indicate why these expenses should be paid by the
district.
- No Cell Phone Policy. Another $29,000 was spent on 50 cell phones.
The district did not have a policy on cell phone use. It is true
that many of the phones were walkie-talkies and could not make
outside calls.
The school district disputed that the expense claims denied by the
internal claims auditor were overridden and indicated that credit cards
assigned to one individual may have, in fact, been used by others.
Auditors made 13 recommendations to the district including scrutinizing
further questionable expenses identified, requiring receipts for all
expenses, adopting a written policy limiting travel expenses and strengthening
the internal claims auditor position.
Although auditors found that the district has taken some first steps
to improve internal controls and adopted new written policies for meals,
credit cards and cell phones in response to the audit, the superintendent
said in his written response to the audit that the district would in
the future inform the Comptroller’s office of steps the district
would take in response to the audit but provided no specifics. The
full response of the district is included in the audit, along with
responses from two former board members and the school business administrator.
“While technically school districts have 90 days to submit a
corrective action plan in response to the audit, every other district
audited on Long Island provided detailed information of how they would
address the auditors’ recommendations prior to the final audit
being issued,” Hevesi said. “It is irresponsible that Central
Islip did not respond to the audit’s concerns at this point.”
The Central Islip school district has about 6,500 students, eight
educational buildings and about 1,030 employees. The district’s
operating budget is approximately $122 million.
Click here for a copy of the audit.
###
Albany Phone: (518) 474-4015 Fax:(518)
473-8940
NYC Phone: (212) 681-4825 Fax:(212) 681-4468
Internet: http://www.osc.state.ny.us
E-Mail:press@osc.state.ny.us |
