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November 13, 2007

DiNapoli: Hauppauge SD Should Improve Financial Oversight

Better financial controls and oversight by the Hauppauge Union Free School District could have reduced tax increases for the 2005-06 school year, according to an audit State Comptroller Thomas P. DiNapoli released today. Additionally, if school officials had accurately estimated and recorded encumbrances, they could have reduced the tax levy by about $1 million in one of the 2002, 2003 or 2004 school years.

“School districts have to make sure education resources are used as effectively and efficiently as possible. School officials have to watch every dollar and provide proper oversight of district finances,” DiNapoli said.

The audit found the district used inaccurate financial condition information and its unreserved fund balance exceeded the statutory limit of two percent, both of which contributed to higher than necessary tax levies in recent years.

Auditors also found that the district’s computerized financial system lacked the security necessary to prevent former employees from accessing the system and altering data. Moreover, the board violated its own contracting policies and, in at least once instance, a vendor was paid nearly $68,000 for services that were not included in its contract.

DiNapoli recommended that school officials take the following corrective action:

  • properly train staff charged with handling district finances and provide the board with accurate and timely financial reports;
  • project realistic and accurate year-end unreserved fund balances;
  • institute written policies establishing controls and direction over payroll, personnel and cash transactions, and that the same person isn’t handling all phases of these transactions; and
  • tighten controls over – and access to – the district’s computer system.

The district generally agreed with the audit’s findings and its full response is included in the audit.

School District Accountability
In order to improve accountability of the state’s schools, State Comptroller Thomas P. DiNapoli’s office will audit all of New York’s 832 school districts, Board of Cooperative Educational Services (BOCES) and charter schools by 2010. The State Comptroller’s office has completed more than 290 school audits and approximately 235 audits are currently underway.

Click here for a copy of the audit.



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