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March 6, 2008

DiNapoli's Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Nassau County Board of Educational Services, Perry Central School District and West Valley Central School District.

“My office’s audits of school districts, charter schools 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.”

Nassau County Board of Educational ServicesInternal Controls
During the initial audit period, auditors found several instances where the board had either not established critical internal controls, or where existing controls were improperly designed or operating ineffectively. After the initial audit period, BOCES officials indicated that they had taken action to address the audit issues and concerns discussed during the audit. Therefore, in August 2007, auditors conducted additional fieldwork to substantiate their assertions.

Auditors found that, even though BOCES officials had taken some corrective action by adopting policies, procedures and regulations, their actions had not been implemented and therefore, were not always effective. For example, as of June 23, 2005, the board updated a policy to require that all claims be audited. However, a claims auditor was not appointed until August 2006, when the board created separate positions for the claims auditor and the internal auditor. Despite these actions, auditors found that 2006-07 claims for diesel fuel, travel-related expenditures, meals and credit card charges still lacked sufficient supporting documentation to allow for a proper audit of these claims. The audit also found that deficiencies still existed for the procurement of professional services, expenditures for travel and meals, and security of passwords. Finally, the audit found that, on average, BOCES officials were using BOCES’ cars 77 percent of the time for personal business. BOCES could have saved at least $189,000 over five years had it reimbursed its administrators for the business use of their personal vehicles at the BOCES approved mileage rate of 32 cents per mile.

Perry Central School DistrictInformation Technology (Wyoming and Livingston counties)
The audit found that internal controls over the district’s computerized financial system were inadequate. District personnel failed to put controls in place to protect servers and component parts, did not secure data backup tapes, and failed to implement a formal disaster recovery plan. In addition, the district was not adhering to the terms of its filter by-pass agreement nor monitoring the use of such by-pass.

West Valley Central School DistrictService Contract for the Internal Auditor (Cattaraugus County)
The district entered into an inter-municipal agreement with 17 other school districts and the Allegany-Cattaraugus Board of Cooperative Educational Services (BOCES) to provide for the internal audit function beginning December 18, 2006. The agreement indicates “the jointly employed internal auditor shall be considered an employee of BOCES for purposes of payroll administration and benefits.” In fiscal year 2005-06, the district spent approximately $1 million on services provided by BOCES. Based on the material nature of these payments by the district to BOCES, the BOCES employee would not be independent in performing the district’s internal audit function.

If you have any questions or would like a comment from the Comptroller’s office regarding any of the audits above, please call the Press Office at 518-474-4015.

School District Accountability
In order to improve accountability of the state’s schools, DiNapoli’s office will audit all of New York’s 834 school districts, Board of Cooperative Educational Services (BOCES) and charter schools by 2010. The State Comptroller’s office has completed 378 school audits and approximately 200 audits are currently underway.

Click here for copies of the above audits.

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