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December 8, 2009

DiNapoli’s Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Colton-Pierrepont Central School District, Oneida-Herkimer-Madison Board of Cooperative Educational Services and Rondout Valley Central School District.

“My office’s audits of school districts and BOCES help schools improve their financial management practices,” DiNapoli said. “These audits are tools for schools to make sure proper policies and procedures are in place to protect taxpayer dollars and provide students with the best possible education.”

Colton-Pierrepont CSD – Internal Controls Over Financial Operations (St. Lawrence County)
Auditors found the duties of the district’s business manager were not adequately segregated, placing most aspects of the financial cycle under the control of one individual. Board policy states the business manager’s responsibilities include preparing journal entries, recording disbursements, and performing transfers between district accounts and wire transfers to external accounts. Further, the business manager processes all payroll and non-payroll cash disbursements and assigns user access rights to the district’s computerized financial system. Auditors’ tests of cash disbursements, bank and wire transfers and payroll did not identify any material exceptions.

Oneida-Herkimer-Madison BOCES – Internal Controls Over Selected Financial Activities (Herkimer, Oneida, Madison counties)
The audit found BOCES officials improperly set aside monies collected from component school districts for post-retirement health insurance costs and for future potential capital projects. As of June 2008, BOCES had approximately $6 million in district funds set aside for these purposes that were not authorized by law. Subsequent to the completion of audit fieldwork, the capital budget monies totaling approximately $2.1 million were returned to the districts in June 2009. Auditors also determined that BOCES officials did not establish adequate internal controls over non-payroll cash disbursements and over cash receipts.

Rondout Valley CSD – Internal Controls Over Selected Financial Operations and Cost Savings (Ulster County)
Auditors found the district reported an unreserved, unappropriated general fund balance in June 2008 of $5.4 million, which was 9 percent of the district’s 2008-09 budgeted appropriations and exceeded the 4 percent allowed by law. In addition, the district reported a liability for retiree health insurance even though there was no liability to report, and a significant portion of fund balance was reported as reserved for compensated absences even though the board did not establish a reserve for that purpose. If these liabilities were not accrued and this fund balance was not reserved, the unreserved, unappropriated general fund balance would have been $8.5 million or 14 percent of the district’s 2008-09 budgeted appropriations. Auditors also determined the district could save, on average, $40,000 annually by printing checks internally, rather than outsourcing this function. Finally, Education Law requires each board member to complete a minimum of six hours of training on the financial oversight, accountability and fiduciary responsibilities of board members within the first year of his or her term. Auditors found two board members did not obtain the required training.

Click on the links above for a copy of the audit. If you have any questions or would like a comment from the Comptroller’s office regarding the audits above, please contact the Press Office at 518-474-4015.

School District Accountability
In order to improve accountability of the state’s schools, DiNapoli’s office will audit all of New York’s school districts and Boards of Cooperative Educational Services by 2010. The State Comptroller’s office has completed 695 school audits and approximately 35 school audits are currently underway.



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