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June 16, 2009

 

DiNapoli's Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Brocton Central School District, Genesee Valley Board of Cooperative Educational Services (BOCES), Livonia Central School District, West Hempstead Union Free School District, West Park Union Free School District and Yorkshire-Pioneer 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.”

Brocton Central School District – Internal Controls Over Extra-Classroom Activity Fund (Chautauqua County)
Auditors found district officials did not require clubs to maintain suitable cash receipt or cash disbursement records. As a result, club receipt records did not indicate the purpose or source of cash received and did not list the name of the individual remitting the funds to the club. Furthermore, check numbers and vendor names were not listed on club disbursement records. Auditors also noted the central treasurer receives funds from the club treasurer but does not formally acknowledge the transfer of club money.

Genesee Valley Board of Cooperative Educational Services – Internal Controls Over Selected Financial Activities (Genesee, Livingston, Steuben and Wyoming counties)
Auditors found BOCES did not properly estimate and disclose administrative and programmatic costs to its component districts regarding the funding and use of Employee Benefits Accrued Liability Reserves. BOCES intentionally over-estimated certain fringe benefit budget appropriations, resulting in over-charges to its districts, which contributed to consistent year-end surpluses. BOCES withheld $133,700 of the 2007-08 surplus without prior disclosure to the districts and used these funds to increase its EBALR. In addition, BOCES’ purchasing policy did not address the procurement of professional services.

Livonia Central School District – Cash Receipts (Livingston and Ontario counties)
Auditors found the treasurer received monies collected from the public and district staff that account for approximately $130,000 in collections annually. The treasurer received these payments, maintained custody of all unused receipt forms and books, recorded cash transactions in the accounting system, issued receipts to payees, and deposited the monies in the district’s bank account. As such, these duties were not properly segregated among staff, increasing the risk that errors could occur and not be detected. Auditors’ testing of receipts found no instances of fraud, waste, or abuse.

West Hempstead Union Free School District – Internal Controls Over Selected Financial Operations (Nassau County)
Auditors found the district appointed an independent contractor as treasurer, although statute and regulation clearly indicate that an independent contractor cannot be a school officer. In addition, the district failed to segregate the treasurer’s cash receipts and disbursement duties. Although auditors did not identify inappropriate payments, failing to segregate duties increases the risk that errors could occur and not be detected. In addition, district personnel generally did not solicit requests for proposals when they procured professional services and continued to use the same professionals year after year.

West Park Union Free School District – Internal Controls Over Selected Financial Operations (Ulster County)
Auditors found the district’s system of internal controls did not adequately segregate the cash-related duties of the business manager or provide adequate compensating controls to provide for an effective system of checks and balances over safeguarding district assets. Auditors also found weaknesses in internal controls over information technology. The board did not adopt a formal written security plan or a disaster recovery plan. Finally, auditors found the district established an adequate system of internal controls over claims processing and that the controls worked effectively.

Yorkshire-Pioneer Central School District – Internal Controls Over Cash Management and the Internal Audit Function (Wyoming, Erie, Cattaraugus and Allegany counties)
Auditors found the district did not update its collateral and custodial agreements for its deposits in banks. In addition, district officials allowed a vendor to withdraw funds directly from a district bank account. Finally, the BOCES employee serving as the internal auditor is not independent in performing the internal audit function. This current arrangement is likely to put the BOCES employee in the position of evaluating significant district services or programs that are provided to the district by BOCES, the individual’s employer.

Click here 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 518-474-4015.

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