DiNapoli: Lax Supervision of Credit Card Use
and Purchasing at Cheektowaga CSD
Contractor Was Also Wrongly Enrolled in Retirement System
The Cheektowaga Central School District’s insufficient controls over purchasing, credit card use, and employee retirement system enrollment put hundreds of thousands of tax dollars at risk according to an audit released by State Comptroller Thomas P. DiNapoli.
“These are tax dollars,” DiNapoli said. “Cheektowaga school officials have to watch how those dollars are being spent. Purchases should be reviewed before they’re made. And district credit cards should not be abused. Now more than ever, every dime counts, and when those dimes belong to the taxpayers, school officials have to be more vigilant than ever.”
DiNapoli’s auditors found that the district:
- did not properly audit claims for payment. Of 75 claims auditors examined totaling $187,088, 61 totaling $169,866 had one or more deficiencies. Deficiencies included insufficient supporting documentation, no evidence of appropriate prior authorization for purchase, and no evidence of receipt or approval to pay;
- allowed the routine use of “confirming” purchase orders, after the purchases were made. Although the district’s total budget was not exceeded, these control weaknesses limited management’s ability to plan procurements, control the budget, and prevent unauthorized purchases;
- allowed the treasurer to perform transfers and journal entries without independent oversight. All 15 journal entries affecting cash that auditors examined, totaling $4,448,494, had deficiencies such as no evidence of supervisory review/approval or lack of documentation. Also, district books were not reconciled with bank accounts for at least two months; and
- improperly classified a contractor as an employee and enrolled this individual in the employee retirement system (ERS), and district officials improperly reported seven part-time employees as working full-time.
DiNapoli recommended that the board and district officials:
- properly audit and approve all claims prior to payment, making sure purchases are for authorized district purposes;
- monitor the distribution and use of credit cards to ensure they’re used for district purchases, and within credit limits as authorized by the board;
- ensure more than one person is responsible for all phases of financial transactions or that the person handling these transactions is properly supervised;
- strengthen controls over the classification of workers, and monitor their effectiveness to ensure that only valid public employees are enrolled in ERS; and
- contact ERS and make the appropriate adjustments to service credit earned for all part-time employees incorrectly reported as working full-time.
With some exception, district officials generally agreed with the majority of the Comptroller’s recommendations and indicated they have taken or plan to take corrective action.
Click here for a copy of the audit.
School District Accountability
In order to improve accountability of the state’s schools, DiNapoli’s office will audit all of New York’s 834 school districts, Board of Cooperative Educational Services (BOCES) and charter schools by 2010. The State Comptroller’s office has completed 530 school audits and approximately 200 school audits are currently underway.