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Audit Finds
Good Financial Controls and Oversight at Locust Valley School District
Three Additional LI Schools to Be Audited
Internal financial controls and policies for spending at the Locust
Valley school district have been improved and the board of education
is providing effective oversight, according to an audit released today
by State Comptroller Alan G. Hevesi.
This is the 16th Long Island school audit released to date. Audits
for another six Long Island school districts are still in progress
including Brentwood, East Islip, Manhasset, Three Village, William
Floyd and Wyndanch, as well as Nassau County BOCES. Hevesi announced
that his office will also be auditing the Center Moriches, Mineola
and Patchogue-Medford school districts.
In the Locust Valley audit, auditors reviewed the period of July 1,
2002 to August 31, 2004 and examined administrative expenses. Auditors
found that the district had already improved many of its financial
practices including hiring a firm to conduct a review of internal controls,
improving written policies for cell phones, travel and meals, and securing
an outside internal claims auditor.
“I commend the Locust Valley school district and the board of
education for making good financial management practices a priority,” Hevesi
said. “The district proactively assessed its internal controls
and took positive steps to address weaknesses. In the few administrative
areas where auditors found room for improvement, the board has acted
to implement our recommendations or indicated that it would carefully
consider our other recommendations.”
In response to the audit, Anthony L. Singe, superintendent of schools,
said “We have believed from the onset that impropriety uncovered
in some neighboring districts does not exist in Locust Valley. While
the audit report provides this reassurance, we have reviewed, and will
incorporate into our procedures, your recommendations to further strengthen
our internal controls.” His full response and the board’s
action plan is included in the audit, as well as the auditors’ investigation
into taxpayer complaints.
Findings include:
- Credit Card Charges. $16,300 was charged to two credit cards. 58
out of 113 credit charges tested by auditors did not have necessary
receipts, but had been paid by the district. The district later
provided auditors with additional documentation and explanations
for these charges. Prior to the state audit beginning, the district
had already canceled its credit cards.
- Travel Expenses. $42,200 was spent on travel-related expenses.
While the board had travel policies requiring that receipts were
attached to reimbursement claims, 20 percent of the claims tested
by auditors did not contain proper documentation. Additionally,
the board had not set limits as to what it would pay for lodging.
- Cell Phones. $23,900 was spent on cell phone usage. Of the six
months of claims tested totaling $4,657, auditors found that the
district paid about $2,400 (51 percent) for minutes over the allotted
usage plans. Auditors were not able to locate documentation as
to why officials were using the phone over their plan allowances,
nor did district officials have a standard policy for reviewing
bills and seeking reimbursement for calls. Despite not having written
policies, auditors noted that the superintendent reimbursed the
district for about $688 for personal calls. In December 2004, the
district adopted a written cell phone policy.
- Meals and Refreshments. $67,000 was spent on meals and refreshments
at 388 events. The district did not have a policy governing spending
on meals during the audit period. However, claims from the school
lunch program generally contained information about what meals
and refreshments where provided and for what meetings, but other
meal expenditures totaling $46,860 paid directly to local vendors
were not adequately documented in many cases. In December 2004,
the district adopted a meal policy that outlines when it is appropriate
to provide meals.
- Internal Claims Auditor. The internal claims auditor also worked
as a part-time typist clerk in the accounting office and reported
to the assistant superintendent for business and personnel as well
as the board of education, which could jeopardize her independence.
The district appointed an accounting firm in September 2004 to
solely review claims and report to the board.
- Internal Controls in the Business Office. Some of the duties of
the business administrator/treasurer needed to be better segregated
to improve internal controls such as separating who signs the checks
and handles cash from who records receipts and prepares bank reconciliations.
The district identified ways that it has added additional precautions
to better segregate duties in its response.
Auditors recommended that the district:
- Require that every expense claim contain enough supporting documentation
to ensure that expenses are for legitimate school business.
- Establish a reasonable maximum per diem for lodging
- Amend its cell phone policy to better address personal use and
reimbursements
- Better segregate the duties currently performed by the business
administrator to further improve internal controls.
The Locust Valley school district has approximately 2,280 students,
five educational buildings, about 450 employees and an operating budget
of about $54 million.
Click here for a copy of the audit.
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 |
