DiNapoli: Rensselaer City SD Financial Controls Weak;
More Than $300,000 in Purchases Made Without
Required Quotes or Bids;
Internal Auditor Lacks Independence
Due to weak oversight and insufficient financial controls, the Rensselaer City School District made $300,000 in purchases for which the district did not obtain the required quotes or bids, made questionable use of two grants, did not have an independent auditor in place, and did not make timely deposits of extra-classroom activity funds, according to an audit released by State Comptroller Thomas P. DiNapoli.
“School officials need to keep a close eye on the tax dollars they spend,” said DiNapoli. “This means enacting sound financial policies and procedures, and then actually following them. Taxpayers deserve nothing less.”
Among DiNapoli’s findings:
- Of 38 purchases reviewed by auditors, 18 totaling $304,718 were not competitively bid or were made without obtaining the required written or verbal quotes.
- The district made $23,886 in questionable expenditures of the Homeless Children and Youth Grant and charged $19,357 in tutoring expenses against the grant even though the district couldn’t identify the children who were tutored. Regarding the Universal Pre-Kindergarten grant, there were $4,147 in questionable expenditures and $11,043 charged to the grant without sufficient documentation.
- The district uses the Rensselaer-Columbia-Greene Board of Cooperative Educational Services (BOCES) for its internal auditor services. This does not meet professional auditing standards for independence given that:
- during 2006-07 the district spent $661,000 on other BOCES services during the same period; and
- the district is planning to enter into a lease agreement with BOCES, under which BOCES would lease space from the district for more than $120,000 a year.
- The board had not adopted policies and procedures governing extra-classroom activities as required by the state Department of Education and as a result records were inadequate and expenditures unexplained.
- The board did not have policies and procedures determining whether individuals should be classified as independent contractors or employees. However, auditors did not discover any incorrect classifications.
DiNapoli recommended that district officials:
- make purchases in accordance with the board-approved purchasing policy and applicable General Municipal Law, and maintain all required documentation;
- terminate the internal audit relationship with the Rensselaer-Columbia-Green BOCES and enter into an internal auditor arrangement that meets the independence requirements in Education Law and State Education Department guidance;
- create and maintain adequate policies and procedures surrounding the accounting for and expenditure of grant funds and ensure that grant expenditures are made and recorded in accordance with grant regulations;
- adopt adequate policies and procedures over extra-classroom activities and ensure that extracurricular activities fund accounts are maintained in accordance with district policy and the Regulations of the State Education Commissioner;
- designate someone independent of the extra-classroom funds to periodically review both the individual club records and central treasurer’s records to ensure they agree; and
- strengthen controls over worker classification processes to help ensure that they correctly determine the status of individuals who work for the district in compliance with the Guide and the regulations posted on the OSC website.
District officials generally agreed with DiNapoli’s recommendations and have initiated, or indicated they planned to initiate, corrective action.
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 490 school audits and approximately 200 school audits are currently underway.
Click here for copy of the audit report