East Meadow Schools Strengthen Oversight of Funding
Following
State Audit
Comptroller Finds Internal Control Weaknesses, but No Wrongdoing
East Meadow Union Free School District officials have improved oversight
of financial operations, strengthened policies for travel expenses
and set new limits on meal expenses after an audit
released today by
State Comptroller Alan G. Hevesi identified internal control weaknesses.
An audit released in 2003 also found comparable internal controls problems
and lax policies regarding reimbursements for travel, meal and other
expenses.
This is the eighth audit that Comptroller Hevesi’s office has
completed of Long Island school districts.
“While auditors found weak financial controls and instances
when travel and meal policies were not followed at the East Meadow
School District, auditors found no instances of wrongdoing,” Hevesi
said. “I urge the board of education to take steps to improve
internal controls and strengthen its oversight role to ensure that
tax dollars are being managed and spent appropriately. I recommend
that the District implement all of the auditors’ recommendations
and carefully monitor its new policies.”
The Comptroller’s office last audited the East Meadow School
District for the period of July 1, 2001 through June 30, 2002. At that
time, auditors found that the District spent more than $9,000 on meals
without proper documentation. In addition, auditors found that the
District had improperly reimbursed officials for conference expenses,
did not comply with its own procurement policy and had poor internal
controls.
In the audit released today that examined administrative expenses
such as travel, conferences, meals, cell phones and credit cards from
July 1, 2002 through August 31, 2004, auditors identified concerns
regarding internal controls, reimbursement rates and a lack of policy
guidance from the board that were similar to the previous audit. Findings
include:
- The board of education did not provide independent oversight over the
claims payment process. Neither the board nor the internal claims auditor
actually reviewed each claim for appropriateness. Instead, the board
reviewed a monthly report prepared by District staff of expenses more
than $300 and relied on District personnel to ensure that the claims
were legitimate. The internal claims auditor did review a sampling
of claims, but did not document which claims he reviewed.
- The District spent nearly $67,000 on travel and conference expenses.
Some travel claims did not contain detailed receipts, and the board
did not have a policy establishing how much the District would pay
for lodging, and its daily meal reimbursement rate of $118 was significantly
higher than the federal per diem rate. The District later lowered
this rate to $85 per day.
- $61,350 was spent by the District for meals and refreshments at 890
meetings. Although the board had adopted a policy in January 2003
that identified when meals could be provided, set a limit of $15
per person and required approval from the superintendent, auditors
found that 10 out of 48 claims tested exceeded the $15 limit by up
to $49 per person.
- $4,900 was spent on three credit cards assigned to District personnel.
Auditors found that the board had not adopted a policy outlining
how officials should use the credit cards. In addition, officials
had not attached invoices or receipts to 32 charges tested by auditors,
however, documentation for all the charges was later provided.
- The District spent approximately $19,200 on about 46 cellular phones.
Despite the fact that the board did not have written policy on the
use of cell phones, auditors found that officials monitored cell
phone usage and watched for minutes in excess of what the plan allowed.
- The treasurer did not control when her signature was affixed to District
checks. Instead staff in other departments, who also have access
to district financial records, affixed the treasurer’s signature
on checks using a signature plate or disk that they controlled.
Auditors found that in recent months, District officials have implemented
several new policies. For example, in January 2005, the board expanded
the duties of the internal claims auditor. His responsibilities now
include conducting a thorough review of each expense claim to ensure
that all claims have the appropriate documentation and monitoring staff
compliance with District policies. In March 2005, the board created
an audit oversight committee, comprised of two members of the board,
to regularly meet with the internal claims auditor, treasurer and the
District’s independent auditors and report on financial matters
to the full board.
Auditors recommended that the District officials and board:
- Designate the responsibility of auditing and approving claims to
the internal claims auditor.
- Monitor and enforce compliance with recently adopted or revised
travel, meal, credit card and cell phone policies.
- Reduce the meal reimbursement provided to District officials in
its travel policies and for off campus meetings to the rate recommended
by the Internal Revenue Service and consider establishing maximum
per diem rates for lodging.
- Require that all claims for meals and refreshments provided at
school events detail who attended the event, when the meeting occurred
and why meals were needed.
- Ensure that the treasurer controls when her signature is affixed
to checks and compare signed checks to approved claim warrants
and certified payrolls.
In a written response to the audit, Dr. Robert R. Dillon, the East
Meadow superintendent of schools, generally agreed with the auditors’ recommendations
for improving internal controls but disagreed with recommendations
to limit meal and travel costs. His full response is included in the
audit. The audit also contains responses to seven taxpayer concerns
that were investigated during the audit.
The East Meadow School District has approximately 8,000 students,
nine educational buildings and about 1,200 employees. The District’s
2004-05 operating budget is $134 million.
Click here for a copy of the audit released today.
Click here for a copy of the audit released in 2003.
###
Albany Phone: (518) 474-4015 Fax:(518)
473-8940
NYC Phone: (212) 681-4825 Fax:(212) 681-4468
Internet: http://www.osc.state.ny.us
E-Mail:press@osc.state.ny.us |
