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December 10, 2009



DiNapoli: Utica CSD Overpaid $71,500 in Transportation Costs

Audit Finds Improper Access to Payroll System, Gaps in Payroll Protocol

The Utica City School District paid up to $71,500 more than necessary for expenses because the district failed to charge these expenses to its transportation contractor, according to an audit issued today by New York State Comptroller Thomas P. DiNapoli. The district also lacked written policies to guide employees on processing payrolls, granted five employees improper access to its payroll system, and may have overpaid teachers and other staffers due to inadequate timekeeping procedures.

"Utica taxpayers are willing to open their wallets to pay for a quality education for their children," DiNapoli said. "But those same taxpayers have the right to demand that their tax dollars will be spent the right way. Without stricter oversight and a designated official to organize timekeeping and other payroll procedures, the potential for misuse and abuse at Utica school district will continue to exist."

DiNapoliís audit, covering July 2007 to December 2008, found several lapses in the districtís enforcement of its contract terms with its transportation provider which cost the district up to $71,500 in extra costs. In one instance, the transportation contractor charged the district $12,192 for erecting a fence around a vacant lot in order to protect its buses as well as district employee vehicles from theft and vandalism. However, the districtís contract requires the contractor to provide adequate security for its vehicles, adding that ď(a)ny and all related costs shall be the responsibility of the contractor.Ē As such the contractor should have paid a portion of the expense for the fence.

Auditors also found that the contractor parked 27 special education buses in a district-leased office and storage facility without paying the district for using the space. In addition, the district paid $7,491 for goods and services that the contractor should have been responsible for. The audit attributed the lapses to a lack of appropriate internal controls and accountability, since there was no specific official responsible for student transportation.

In addition, the audit noted that the districtís treasurer did not reconcile the payroll bank account with the general ledger in a timely manner and had not recorded $11,581 in interest earnings. Auditors found no evidence of improper withdrawals from the payroll account.

The district also did not establish formal procedures for timekeeping. Staffers and supervisors occasionally submitted timesheets for extra time worked months after the employees performed the duties. Auditors tested 10 timesheets for teachers and teaching assistants and found errors in 50 percent of the sample, indicating the possibility of significant errors in the system. Auditors found inaccurately recorded leave time which resulted in the school district paying six employees for time that was not deducted from their leave records.

DiNapoli recommended that district officials:

  • designate an official or employee to oversee the transportation contract and monitor payments;
  • develop written procedures for preparing time records and payrolls;
  • maintain accurate leave records for all employees;
  • require the treasurer to reconcile the payroll account and general ledger each month; and
  • restrict user permissions within its payroll system to levels based on day-to-day duties.

District officials responded at length to the auditís conclusions. To view the full audit, including their full response, visit www.osc.state.ny.us/localgov/audits/schools/2009/utica.pdf.

State Government Accountability
The Office of the State Comptroller regularly audits state agencies, public authorities and New York City agencies. Auditors ensure that programs achieve their established goals, funds are used efficiently and assets are adequately protected against fraud, waste and abuse. DiNapoliís office completes approximately 200 state audits and annually identifies hundreds of millions in savings and fraud each year.



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