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December 15, 2009




DiNapoli’s Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Cayuga-Onondaga Board of Cooperative Educational Services, Malverne Union Free School District and Middle Country 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.”

Cayuga-Onondaga BOCES - Internal Controls Over Selected Financial Operations (Cayuga and Onondaga counties)
Auditors found there was a lack of board oversight over claims processing. In addition, BOCES personnel did not fully comply with established policies and did not formulate detailed procedures for claims auditing. Auditors also noted that credit card purchases were not reviewed or audited by the claims auditor.

Malverne UFSD – Internal Controls Over Selected Financial Activities (Nassau County)
The audit found the district reserved approximately $1.1 million more than necessary in its employee benefits accrued liability reserve fund. Further, the district did not use the EBALR funds to pay employees for compensated leave benefits; instead, the district used general fund appropriations for these costs and levied taxes to pay for them. Auditors also found the district’s unreserved fund balance of nearly $2.4 million exceeded the legal limit of 4 percent of the ensuing year’s budget by $639,000 as of June 2008. District officials told auditors this excess fund balance was intended to pay other post-employment benefit (OPEB) costs. However, since there is no legal authorization to reserve funds for OPEB expenditures, this amount is actually a part of the district’s unreserved fund balance. If the district’s unreserved fund balance were recalculated to include the excess EBALR monies, the district’s fund balance as of June 2008 would exceed the legal limit by $1.74 million. The district also paid five administrators a total of $226,714 for separation payments that were based on a collective bargaining agreement whose vague terms allowed administrators to determine their own method of calculating payment. The district paid the treasurer $19,350 as an independent contractor although statute and regulation clearly indicate that an independent contractor cannot be a school officer.

Middle Country CSD – Internal Controls Over Financial Activities (Suffolk County)
Auditors found the district accumulated approximately $12 million in unnecessary fund balance and various reserve funds that could be used to benefit taxpayers by paying one-time expenditures, funding necessary reserves, reducing debt or reducing the tax levy. The district’s unreserved and
unappropriated general fund balance as of June 2008 totaled $11.7 million, or 6 percent of the appropriations for the 2008-09 fiscal year which is 2 percent more than allowed by law. Furthermore, an additional $19.3 million was held in reserve funds and at least $8 million of that total was in excess of amounts required to fund the liabilities associated with those reserves. In addition, district personnel did not consistently solicit competition when seeking to obtain professional services. Auditors also found certain employees were overpaid and that payrolls were not properly certified. The district paid five employees $45,315 for separation payments that were greater than the amounts they were due per provisions of their collective bargaining agreements.

Click on the above links to view the audits or, visit: www.osc.state.ny.us/localgov/audits/index.htm. If you have any questions or would like a comment from the Comptroller’s office regarding the audits above, please call 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 700 school audits and approximately 30 school audits are currently underway.

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