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December30, 2008

DiNapoli’s Office Completes 216 School Audits in 2008;
On Track to Meet March 2010 Deadline to
Audit All Public Schools and BOCES

State Comptroller Thomas P. DiNapoli’s office completed 216 school audits in 2008 and is on track to meet the office’s March 31, 2010 deadline to audit all public schools and Boards of Cooperative Educational Services, according to his office’s 2008 Annual Report on the School District Accountability Initiative released today.

The State Comptroller’s office has completed 548 school audits since 2005 and has approximately 200 audits currently underway. DiNapoli’s office will begin audits of all remaining school districts and BOCES by June 30, 2009.

“My office’s audits are a resource for both school officials and taxpayers to ensure that public money is spent efficiently and appropriately,” DiNapoli said. “Education is a major expense for taxpayers and a major investment for New York. Every dime counts and my office’s audits work to make sure school districts are using sound financial management practices, while providing school officials with the guidance they need to manage and spend tax dollars responsibly.”

Common Themes
The report summarizes the findings of school audits completed this year and identifies systemic problems found in schools, including:

  • inappropriate payments to school officials when they leave a district (found in 7 percent of audits) or for personal services that they are not entitled to in their contracts (16 percent);
  • deficiencies in the claims audit process to ensure expenses are appropriate (36 percent); and
  • weaknesses in the security of the districts’ IT systems (44 percent).

For example, in an audit of the Liverpool Central School District (Onondaga County), auditors found the district overpaid the former superintendent by $26,275 as well as a payment of $67,790 to the former superintendent for unused leave that could not be substantiated with documentation.

In addition, the report noted 11 school districts, or 5 percent, received audits with positive findings. Overall, auditors found the systems of controls in place at these school districts were well designed and operating effectively.

Special Audits
DiNapoli’s office completed 55 school-related, special subject audits in 2008. Auditors reviewed Employee Benefit Accrued Liability Reserve (EBALR) Funds at 251 school districts and determined that school district officials reserved $407 million more than necessary to pay for anticipated liabilities.

Auditors also examined eight districts in northeastern New York and found weak internal controls and policies prevented the districts from claiming at least $3.1 million in Medicaid reimbursable expenses and consequently losing out on $1.54 million in revenue for the districts and state to share.

Retirement System Reporting
In March, DiNapoli’s office completed an audit of attorney Lawrence Reich’s relationships with five Long Island school districts and determined each of the districts incorrectly reported Reich as an employee to the New York State and Local Retirement System. The Retirement System subsequently revoked Reich’s pension benefit. In addition, auditors visited more than 300 participating employers and examined the employers’ relationships with their legal counsel and other professional service providers. To date, DiNapoli’s office has revoked the memberships or rescinded service credit of 46 individuals.

Resources for Local Officials
In collaboration with Cornell University’s Community and Rural Development Institute, in September DiNapoli’s office launched the Local Official Training Clearinghouse Web site (, which is a searchable online training database for local government and school district officials. In addition, the Comptroller’s office in October offered the first in a series of free online tutorials about best practices in financial management. The first tutorial discussed effective cash management. Additional tutorials will be offered in 2009.

This year, DiNapoli’s office also launched the Web site Open Book New York ( that provides taxpayers and local officials with detailed information on how state and local governments spend money and allows them to compare year-to-year revenue and spending trends.

DiNapoli’s office also publishes a series of how-to guides to assist local governments and school officials in prudently managing and spending taxpayer dollars. In 2008, new guides were released on such topics as Personal Service Cost Containment, Management’s Responsibility for Internal Controls, Understanding the Budget Process and Financial Condition Analysis. These guides are available on the State Comptroller’s Web site at:

Click here for a copy of the 2008 Annual Report on the School District Accountability Initiative.


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