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November 3, 2009

DiNapoli’s Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Canandaigua City School District, Canton Central School District, Chautauqua Lake Central School District and Franklin-Essex-Hamilton Board of Cooperative Educational Services.

“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.”

Canandaigua City SDInternal Controls Over Selected Financial Operations (Ontario County)
Auditors found the district and the state each potentially lost approximately $335,114 in Medicaid reimbursement from July 1, 2007 through October 31, 2008 because the district lacked procedures to define the responsibilities for collecting data, documenting, submitting and reconciling claims. In addition, the district did not effectively monitor the reimbursement process. District officials did not effectively assign responsibilities to the treasurer to ensure there was a proper segregation of duties and did not establish sufficient compensating controls. Finally, although the district developed a comprehensive handbook and provided training to staff involved in extra-classroom activities, the district did not monitor the activities for compliance. As a result of these internal control weaknesses, extra classroom activity cash receipts were at risk of fraud or abuse.

Canton CSD – Internal Controls Over Payroll (St. Lawrence County)
The audit found internal controls over the district’s payroll process were not appropriately designed because the treasurer performed virtually every phase of the payroll process. Specifically, the Treasurer had user access rights in the district’s computerized payroll module which allowed her to enter new employees, activate and inactivate existing employees, and make changes in employees’ hourly and annual salary rates – including her own. She was also responsible for setting up employee payroll deductions and direct deposits, preparing and signing payroll checks, and maintaining payroll records. The treasurer processes the district’s payroll without any oversight.

Chautauqua Lake CSD – Internal Controls Over Reserves (Chautauqua County)
Auditors found the district’s capital reserve fund exceeds the amount approved by the voters by $400,000, and did not specifically associate debt issues with any portion of the unused fund balance totaling $519,455 in the debt service fund.

Franklin-Essex-Hamilton BOCES – Internal Controls Over Selected Financial Activities (Essex, Franklin and Hamilton counties)
The audit found internal controls over administrative staff compensation and expenses were not appropriately designed or operating effectively. As a result, six administrative staff members received compensation totaling $5,162 that was not authorized by the board. In addition, administrative staff did not use BOCES-provided vehicles and cellular phones in accordance with the board’s established policies. Although BOCES’ policy allows for only minimal personal use, auditors found a significant percentage of the mileage of certain administrator-assigned vehicles was for non-business purposes at an estimated value of $22,956. In addition, administrative staff members assigned cellular phones incurred more than minimal personal use and did not always reimburse BOCES for their personal cellular phone charges in a timely manner. Finally, auditors identified leave time valued at more than $58,950 that was neither credited nor used in accordance with the terms of applicable employment contracts or collective bargaining agreements.

View the audits above by clicking on link. If you have any questions or would like a comment from the Comptroller’s office regarding 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 school districts and Boards of Cooperative Educational Services by 2010. The State Comptroller’s office has completed 670 school audits and approximately 55 school audits are currently underway.


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