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July 14, 2009

DiNapoli’s Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Brasher Falls Central School District, Edgemont Union Free School District, Franklin Square Union Free School District, Greenburgh-Graham Union Free School District and Red Creek 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.”

Brasher Falls Central School District – Internal Controls Over Purchasing and Payroll (Franklin County)
Auditors found the district’s controls over purchasing were appropriately designed and operating effectively. However, district officials did not establish policies and procedures to adequately segregate payroll duties or provide for effective compensating controls. Auditors’ testing did not disclose any significant exceptions. District officials have already begun to implement mitigating controls to offset the lack of segregation of duties in the payroll area.

Edgemont Union Free School District – Internal Controls Over Professional Services and Computer Access Rights (Westchester County)
The audit found the district’s purchasing policy did not require district officials to use competition. As a result, district officials made payments for professional services, totaling $248,139, during the 2007-08 fiscal year without seeking competitive proposals or quotations. In addition, the board did not adopt procedures to ensure that access to the district’s computerized data is restricted.

Franklin Square Union Free School District – Internal Controls Over Selected Financial Operations (Nassau County)
Auditors’ found the district’s procurement procedures were not appropriately designed or operating effectively. District officials did not solicit competitive proposals prior to selecting six professional service providers who were paid $267,379. Auditors also found the district did not competitively bid four purchases and three public work contracts, totaling $177,074, as required. Also, there was no evidence that district personnel attempted to obtain quotes for 13 purchases totaling $23,607. The district’s check-signing process was not adequately designed or operating effectively. Auditors also found the district improperly classified an independent contractor, an attorney, as an employee and enrolled this individual in the New York State and Local Retirement System.

Greenburgh-Graham Union Free School District – Internal Controls Over Selected Financial Activities (Westchester County)
Auditors determined the board needs to improve its oversight of district operations. Three of nine board members did not complete training that is required by State Education Law. Auditors also found that all nine board members did not properly disclose their interest in contracts with the Graham Windham Agency and one board member did not properly disclose her interest in contracts with a bank. Board members were unaware that personnel in the district’s business office were receiving a five-percent salary increase annually. Finally, the claims auditor did not report directly to the board. As a result of these weaknesses, board members did not receive sufficient training, maintain an environment of transparency or ensure that employees received only the compensation that was authorized. In addition, the effectiveness of the claims audit process was diminished.

Red Creek Central School District – Internal Controls Over Selected Financial Activities (Cayuga and Wayne counties)
Auditors found the district properly established reserve funds, but the balance retained in the Employee Benefit Accrued Liability Reserve was not calculated properly. In addition, the liability and insurance reserves had no activity since their creation and therefore, they are not necessary. Auditors calculated that the district has overfunded these three reserves by approximately $1.28 million. Had these moneys been reported as general fund unreserved fund balance, real property taxes would have been reduced, since the board would have been required to comply with the statutory limits for fund balance.

Click on the links to view the audits above. 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.



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