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January 12, 2010

DiNapoli’s Office Completes BOCES Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Broome-Delaware-Tioga Board of Cooperative Educational Services, Monroe #1 BOCES and Ulster County BOCES.

“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.”

Broome-Delaware-Tioga BOCES – Financial Operations (Delaware, Broome and Tioga counties)
Auditors found BOCES officials did not ensure that all moneys due were received, recorded and deposited because the internal controls over cash receipts were weak to non-existent. As a result, BOCES officials during November 2008 could not account for $3,800 paid by students. In addition, BOCES officials could not verify that credit card refunds totaling $12,000 were for the correct amounts or paid to the correct individuals, nor could they verify that career and technical education (CTE) materials and supplies totaling $85,898 were purchased for instructional purposes, or if the moneys received for CTE services were properly charged and deposited. In addition, the purchasing agent and department heads did not ensure that purchases were authorized, for appropriate purposes, or made at the lowest cost. Finally, the Board did not ensure that fund balances and reserve balances were necessary and used for appropriate purposes. As a result, BOCES accumulated reserve funds totaling $5.5 million for employee benefits and unemployment insurance, balances which significantly exceed amounts reasonably needed to meet related liabilities.

Monroe #1 BOCES – Management Oversight and Controls Over Selected Financial Operations (Monroe County)
The audit found the board failed to adequately oversee the BOCES operations, setting a poor “tone at the top” that allowed numerous deficiencies in BOCES operations to develop and escalate. Three BOCES Board members did not publicly disclose their potential interest, as required by Education Law, in BOCES’ property lease with the Monroe #1 Educational Foundation. BOCES leased a bus garage owned by the BOCES head bus mechanic, who also controlled BOCES parts inventory and equipment, supervised BOCES mechanics and ran a private used car dealership out of the facility. The board also failed to perform sufficient market value analyses prior to entering into leases on behalf of BOCES, as required by Education Law, or to adopt resolutions explaining why such leases were in the best financial interest of BOCES. Finally, BOCES officials also did not develop payroll policies for compensatory time, employee time sheets, or the monitoring of off-site work.

Ulster County BOCES – Internal Controls Over Selected Financial Activities (Ulster County)
Auditors found the Ulster BOCES generally complied with the requirement to return surpluses to the component districts. However, BOCES officials withheld amounts erroneously accrued and accumulated in the general fund as Other Post-Employment Benefits (OPEB) Payable (approximately $12.8 million) from refunds due to the component districts. BOCES’ internal controls over payroll also need to be improved. Auditors also found that internal controls over cash receipts collections in the business office were not properly designed or operating effectively. The audit also disclosed that BOCES entered into professional services contracts with a contractor that also identifies the wife of a BOCES official as the consultant. The BOCES official did not disclose his interest in the professional services contracts in writing to the board as required, and there is no evidence that the board approved the contracts. Finally, BOCES officials did not establish adequate internal controls to effectively safeguard BOCES’ computer systems and data.

Click on the links above to view the audits. 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 725 school audits and approximately six school audits are currently underway.



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