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December 22, 2010


DiNapoli's Office Completes School and Local Government Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the: Romulus Central School District – Internal Controls Over Medicaid Reimbursement; Le Roy Central School District – Financial Management; Greenburgh-North Castle Union Free School District – Internal Controls Selected Financial Activities – Audit Follow Up; Village of Cambridge – Records and Reports; and Town of Blooming Grove – Internal Controls Over Selected Financial Activities.

“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.”

Romulus Central School District – Internal Controls Over Medicaid Reimbursement (Seneca County)
DiNapoli’s auditors found that the district lacked written policies and procedures to define the responsibilities for collecting data and documentation, submitting and reconciling claims, and monitoring the reimbursement process during the 2008-09 fiscal year. Further, while the claims processing vendor provided the claims reports and reconciled the claims submitted against those approved for payment by the Office of the Medicaid Inspector General (OMIG), district officials did not follow up on denied claims and did not reconcile the claims approved for payment by OMIG with the Medicaid reimbursements received. As a result, the district did not claim and receive $41,080 in potential Medicaid reimbursements for IEP-related services during the 2008-09 year.

Le Roy Central School District – Financial Management (Genesee County)
Auditors from DiNapoli’s office found that the district accumulated more than $2 million that should have been used to benefit taxpayers by paying one-time expenditures, funding necessary reserves, reducing debt and/or reducing the tax levy, in accordance with applicable statutory requirements. The board did not adopt a comprehensive financial management policy and failed to prepare reasonable budgets for the four-year period 2006-07 through 2009-10. District officials overestimated appropriations and underestimated revenues by a total of $6.5 million over this period, even though data was often available to develop more accurate budget estimates. As a result of these practices, the district generated operating surpluses totaling more than $4 million. District officials also used the majority of the annual surpluses to fund reserves. As of June 30, 2010, balances in the district’s three general fund reserves totaled $2.4 million. District officials were unable to provide adequate justification for the establishment and funding for these reserves, and did not properly use the reserve funds.

Greenburgh-North Castle Union Free School District – Internal Controls Selected Financial Activities – Audit Follow Up (Westchester County)
DiNapoli’s auditors noted that of the 11 distinct audit recommendations included in DiNapoli’s report, five recommendations were implemented, one recommendation was partially implemented, and five recommendations were not implemented.

Village of Cambridge – Records and Reports (Washington County)
DiNapoli’s auditors found that the board did not clearly define the clerk-treasurer’s accounting responsibilities and duties. As a result, the clerk-treasurer did not maintain timely and accurate accounting records and reports or file annual financial reports with the State Comptroller’s Office as required. Auditors also found that the clerk-treasurer had not been providing the board with periodic financial reports during the year for use in monitoring village operations. Further, the board did not audit, or cause to be audited, the records and reports of the clerk-treasurer or any other officers and employees who received or disbursed moneys on behalf of the village. Therefore, the board’s ability to monitor the village’s fiscal affairs was impaired.

Town of Blooming Grove – Internal Controls Over Selected Financial Activities (Orange County)
Auditors from DiNapoli’s office found that the town comptroller prepared, and the board approved, structurally unbalanced budgets for the water and sewer funds that did not provide sufficient revenues to finance expenditures. Overestimated revenues resulted in revenue shortfalls, fund deficits, and unauthorized inter-fund loans from the general fund which totaled $1.3 million at the end of the 2009 fiscal year. For the three-year period 2007 through 2009, the overstated revenues resulted in revenue shortfalls totaling $150,061 for the water fund and $293,892 for the sewer fund. In addition, town officials did not always comply with state law and policy requirements for the use of competition when making purchases or procuring professional services. Finally, the comptroller – who is also the town’s purchasing agent and is responsible for auditing and approving claims for payment in addition to budgeting, recordkeeping, financial reporting, and system administration for the town’s financial software – did not enforce compliance with the town’s purchase order system, did not properly approve purchases, allowed payment of invoices without sufficient itemization, and approved payment to the town’s independent auditor for financial reports that had not been received.

If you have any questions or would like a comment from the Comptroller’s Office regarding these audits, please call Nicole Hanks at 518-474-4015, or send an email to



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