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July 28, 2009

DiNapoli’s Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Alexandria Central School District, Caledonia-Mumford Central School District, Grand Island Central School District and Olean City 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.”

Alexandria Central School District – Internal Controls Over Cash Receipts and Disbursements (Jefferson and St. Lawrence counties)
Auditors found district officials did not establish appropriate policies or procedures to adequately safeguard financial resources in the business office. They did not segregate financial duties related to cash receipts and disbursements or properly segregate duties within the computerized accounting system. Furthermore, the treasurer did not adequately control the application of his facsimile signature to checks. While auditors’ review of transactions did not identify any exceptions, district officials must correct these control weaknesses to reduce the risk of unauthorized payments or the loss or theft of cash receipts.

Caledonia-Mumford Central School District – Internal Controls Over Selected Financial Operations (Genesee, Livingston and Monroe counties)
The audit found the district did not establish adequate internal controls over extra-classroom activity (ECA) funds. Specifically, the district did not monitor ECA activities, did not properly segregate the cash receipts duties and did not keep adequate records. As a result, approximately $4,000 in ECA funds was stolen by the former central treasurer, who later admitted to petit larceny, was prosecuted in County Court, and made restitution for the $4,000 admittedly taken. Additional reported bookstore thefts and other discrepancies totaling $3,154 occurred during the audit. District officials also did not ensure computer data was safeguarded.

Grand Island Central School District – Internal Controls Over Financial Condition and Potential Conflict of Interest (Erie County)
Auditors found the district accumulated approximately $3.5 million that should be used to benefit taxpayers by paying one-time expenditures, funding necessary reserves, reducing debt or reducing the tax levy, in accordance with applicable statutory requirements. While the district appropriates approximately $2 million in fund balance each year, it is not used as intended because the district’s budgetary practices consistently resulted in operating surpluses during the last four fiscal years. In addition, the district improperly reported a Debt Reserve in the general fund and did not have a plan to use Debt Reserve monies, which totaled more than $900,000 in June 2008. The district also overstated its reserve for encumbrances by an average of $650,000 each year. Finally, auditors evaluated a potential conflict of interest with the board president, relative to his employment with an architectural firm that the district hired. Based in part upon written representations from the board president and an individual from the architectural firm, a prohibited conflict of interest does not appear to exist.

Olean City School District – Internal Controls Over Information Technology and Purchasing (Cattaraugus County)
Auditors found the district did not develop comprehensive information technology risk assessments and disaster recovery plans; did not properly secure all of its information technology hardware; did not properly separate user access and administrative functions within applications; and did not require proper computer password and access protocols. The District also did not follow General Municipal Law or its own procedures because it did not competitively bid three commodities totaling $103,100. If the district had used the State-awarded contract to purchase its fuel, it could have saved more than $1,200. The district did not obtain requests for proposals for three vendors, who received a total of $376,000.

Click on the above links 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.



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