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November 10, 2009

 

DiNapoli's Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Beacon City School District, Hammond Central School District, Otsego Northern Catskills Board of Cooperative Educational Services, Valley Stream Union Free School District #24 and Valley Stream Union Free School District #30.

"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."

Beacon City SD - Internal Controls Over Selected Financial Operations (Dutchess County)
Auditors found the district did not develop adequate procedures to effectively procure quality professional services at reasonable prices. Auditors found that district officials did not solicit competitive proposals or quotes for four professional services vendors. Auditors also found that during the audit period, the district paid more than $840,000 to three firms for architectural and engineering services and more than $120,000 to a firm for legal services. In addition, the district did not have written contracts with two of these vendors totaling more than $344,000. Auditors also found that the board did not adopt formal policies related to wire transfers. Finally, district officials did not store back-up copies of computer data in a secure off-site location.

Hammond CSD - Internal Controls Over Selected Financial Operations (Jefferson and St. Lawrence counties)
The audit found the treasurer performed incompatible cash disbursement and bank reconciliation duties. Although compensating controls were established, they could be enhanced by having someone other than the treasurer receive bank statements and cancelled checks for review prior to the reconciliations being performed. In addition, the procedures for claims auditing were not followed, resulting in 47 of the 165 claims tested, totaling $387,889, not being listed on warrants to indicate they had been audited and approved by the board.

Otsego Northern Catskills BOCES - Financial Operations (Otsego, Delaware, Greene and Schoharie counties)
Auditors found BOCES personnel did not fully comply with Education Law, and BOCES' policy, to ensure fingerprint-supported criminal history background checks were performed and filed with the New York State Education Department (SED) for employees who had direct contact with students. Auditors also found that two vendors had access to and the ability to withdraw funds directly from BOCES' bank accounts. Finally, the business official did not develop comprehensive operational procedures to ensure that cash receipts were accounted for properly. Records maintained were not sufficient, duplicate press-numbered receipts were not accounted for properly, cash receipt transactions were not reviewed, and monies were not deposited in a timely manner and intact.

Valley Stream UFSD #24 - Internal Controls Over Selected Financial Operations (Nassau County)
Auditors found district officials did not retain an unreserved, unappropriated fund balance within the statutory limit. As of June 2008, the unreserved, unappropriated fund balance in the general fund totaled $3 million, which was more than three times the amount allowed by law. This excessive fund balance resulted mainly from operating surpluses that were neither allocated to legal reserves nor used to reduce real property taxes. In addition, the district's claims auditing process was not appropriately designed and operating effectively. Auditors reviewed 38 claims totaling $22,055 and found that the board did not properly audit 18 claims totaling $13,006, which contained various deficiencies related to itemization and documentation.

Valley Stream UFSD #30 - Internal Controls Over Selected Operations (Nassau County)
The audit found that although the board adopted a purchasing policy, district officials did not always ensure that employees complied with the policy. Auditors found district officials procured services from five professional service providers, totaling $198,624, without the benefit of competition. In addition, the district paid two of these providers $102,090 for legal services without a written agreement. District officials did not have a procedure in place to ensure that criminal background checks were performed and filed with SED for five individuals who had direct contact with students.

To view the audits above, visit: http://www.osc.state.ny.us/localgov/audits/index.htm. If you have any questions or would like a comment from the Comptroller's office regarding the audits above, please call Emily DeSantis 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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