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July 15, 2010

DiNapoli: BOCES Mishandled Taxpayer and District Monies

Maintained $79 Million in Unauthorized or Overfunded Reserves

Six Boards of Cooperative Education Services (BOCES) maintained $79 million in unauthorized or overfunded reserve funds, and failed to inform participating school districts as to why the funds were needed or what they would be used for, according to an audit released today by New York State Comptroller Thomas P. DiNapoli.

“BOCES is holding millions of dollars in unauthorized and overfunded reserves,” said DiNapoli. “This is particularly frustrating during these difficult times. This money should have been returned to school districts and taxpayers to lower their taxes. BOCES is a public organization. It should act in the best interest of the public and should be transparent when doing so.”

The six BOCES reviewed in this audit include: Capital Region, Madison-Oneida, Erie 1, Nassau, Rockland and Western Suffolk. The audit covered the period July 1, 2007 to June 30, 2009.  Auditors also reviewed historical reserve fund data for the period of July 1, 2005 to June 30, 2007.

As of June 30, 2009, the six BOCES had approximately $110 million in reserved funds.  DiNapoli’s auditors found that that the allocation of approximately $30.5 million to reserves during the audit period was not clearly reported to school districts by the BOCES. If the same unclear reporting techniques were used in prior years, then school districts were not clearly informed as to how and why BOCES reserved the entire $110 million, as well as another $19.5 million that they already spent from reserves during the audit period.

In addition, DiNapoli’s auditors noted the following regarding the $79 million maintained in unauthorized or potentially overfunded reserves:

  • $26.3 million was in eight reserves that BOCES are not authorized to establish; and
  • $52.7 million was in 19 reserves that BOCES could not document a need for by means of liability calculations or use plans.

Further, the auditors noted that $29.9 million in two of the 19 unsupported reserves were not used as allowed by law. Each of the six BOCES has one or more unsupported reserves.

DiNapoli recommended BOCES officials:
  • Ensure that participating and component districts are properly notified of BOCES’ intent to fund reserves;
  • Develop written plans for the funding and use of reserve funds; and
  • Review BOCES’ legally established reserves and determine if the balances are necessary and reasonable.

The results of the audit and recommendation have been discussed with BOCES officials and their comments were considered in preparing this report.

For a copy of the audit of the six BOCES, visit:
For a copy of the Capital Region BOCES audit, visit:
For a copy of the Madison-Oneida BOCES audit, visit:
For a copy of the Erie 1 BOCES audit, visit:
For a copy of the Nassau BOCES audit, visit:
For a copy of the Rockland BOCES audit, visit:
For a copy of the Western Suffolk BOCES audit, visit:


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