Audit Finds Elmont School District Took Necessary
Steps to Improve Internal Controls and Policies
The Elmont Union Free School has strengthened financial oversight
and adopted policies to limit spending on meals, travel and other administrative
expenses after a State Comptroller’s audit and an independent
financial review of the district’s financial operations identified
areas for improvement, New York State Comptroller Alan G. Hevesi said
today.
The Comptroller’s audit released today examined administrative
expenses for the school district from July 1, 2002 to August 31, 2004.
Auditors found that duties were not properly segregated to ensure that
money was being spent appropriately and that some expenses did not
have proper documentation. Auditors did not identify any evidence of
wrongdoing and found that the district had already addressed many of
the control weaknesses identified. This is the eleventh audit that
Comptroller’s Hevesi’s office has completed of Long Island
school districts.
“I commend the Elmont School District for proactively taking
steps to assure taxpayers that the district is managing public money
responsibly and for making necessary improvements when auditors found
weaknesses,” Hevesi said.
Findings include:
- Credit Card Charges. $14,400 in charges was spent on seven credit cards
assigned to the superintendent and members of the board of education.
No written rules existed on how officials should use those cards.
In addition, auditors found that the district paid charges for things
such as meals, hotels, train tickets and airfare even though proper
documentation was not attached. In January 2005, the board of education
passed a policy requiring that an itemized receipt, the purpose of
the expense and the name of the individual who made the purchase
were attached to the expense claim to verify that expenses were prudent
and proper.
- Travel for District Staff and
Board Members. The district spent $24,500
on travel for managers and members of the board of education. The district
had no limit on what officials could spend on meals or lodging. The
district exceeded the federal per diem reimbursement rates for hotel
rooms by $3 to $96 per night and paid hotel tax when the district was
tax exempt.
- Cell Phone Usage. $33,100 was spent on 52 cell phones. Auditors found
that the district did not have a written policy for cell phone use
or who should get phones. However, the district did seek reimbursement
for personal calls.
- Meals for Meetings. The board provided no guidance on when it was
appropriate to provide meals and refreshments to employees. In total,
the district spent $18,800 for food at 92 meetings.
- Segregation of Treasurer’s Duties. The district did not properly
segregate the treasurer’s duties to provide an adequate set
of checks and balances over financial transactions. For example,
the treasurer controlled all phases of transactions including: preparing
deposits, transferring funds electronically, posting entries in the
accounting records, signing checks and performing bank reconciliations.
- Proper Review of Spending. Although the board had appointed an internal
claims auditor who reported to it directly, this individual also
worked as a stenographic secretary in the superintendent’s
office. Part of her responsibilities included preparing purchase
requisitions for supplies and conferences for this office. Therefore
she could not provide proper independent review of claims necessary
for good internal controls.
In recent months, the district had its independent auditors expand
their financial review to perform an in-depth review of expenses from
July 1, 2003 to June 30, 2004. The district has also hired new staff
to help segregate and realign business duties. In addition, the board
of education adopted a written policy that outlines rules for travel
and established the federal per diem for what the district will pay
for lodging expenses. A policy was also adopted related to providing
meals and refreshments and establishing a cap on daily meal expense
reimbursements.
Auditors’ recommendations include:
- The board of education should appoint an internal claims auditor
who does not report to a sole school district official that supervises
others who approve financial transactions and purchases goods.
- The internal claims auditor should require that every claim contain
enough supporting documentation to determine that it complies with
district policies.
- The board should monitor, enforce and update policies for cell
phones, credit cards, travel-related expenses and meals.
- To avoid paying taxes, district travelers should be ready with
proper identification and tax exempt forms.
In response to the audit, Superintendent Maria Palandra, Ph.D., said
that many recommendations of the auditors have been acted upon and
that the audit echoed an initiative underway at the district to improve
operations. She also said “The audit has contributed to the enhancement
of our fine school system and we hope that the Comptroller will re-establish
the practice of routinely auditing school districts and other public
agencies.”
Dr. Palandra’s full response is included in the audit, as well
as a response to five taxpayer complaints investigated as part of the
audit.
The Elmont School District has approximately 4,400 students, six education
buildings and about 660 employees. The district’s 2004-05 operating
budget was about $55 million.
Click here for a copy of the audit.
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