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October 26, 2007

DiNapoli Audit: Lafayette SD Must Improve
Contract Language to Avoid Unnecessary Payments

Internal Controls Generally Operating Effectively

While internal controls over separation payments at LaFayette Central School District generally operated sufficiently, the district paid a former administrator $6,770 in potentially unnecessary separation payments because the district did not clearly identify the benefits provided for in personal service contracts, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“Separation payments cannot be approximations. They must be made based on the actual leave credits earned by employees,” DiNapoli said. “If an employee does not work a full year, they should not be credited with a full year of leave credits. LaFayette needs to change its internal procedures to prevent any overpayment of taxpayer dollars for leave credits that were not earned.”

The audit found that the district, in general, designed appropriate internal controls over employee separation payments and that those controls are operating effectively. Seven of the eight separation payments reviewed were paid appropriately. However, ambiguous contract language may have led to an unnecessary separation payment for one former assistant superintendent.

Although the assistant superintendent only worked for the district for six months, district officials provided separation payments for a full year’s worth of unused leave. While the district’s personal contracts are specific regarding the number of leave days that will be earned annually, they are not clear on how many leave days an employee is credited with- when they work for less than a full year. In the case of the assistant superintendent, the calculated difference between a payment based on 12 months of leave time credits rather than six months was $6,770.

The absence of clear contract language regarding all pertinent aspects of employment, such as earned vacation and sick leave time, can lead to uncertainty about the rights, duties and responsibilities of all parties involved. Specifically, it raises questions about the legitimacy of the amount that was paid.

DiNapoli’s audit recommends that district officials ensure labor agreements include clearly written provisions for payouts of unused leave. In addition, the audit calls upon the board to provide for a pro rata adjustment or reduction in full benefits if the person leaves before completing the full year. The district generally agreed with the audit’s findings. The district’s full response is included in the audit.

Click here for a copy of the audit.

School District Accountability
State Comptroller Thomas P. DiNapoli requested and received an additional $2.7 million in 2007 to hire more staff to audit schools. In order to improve accountability of the state’s schools, the State Comptroller’s office will audit all of New York’s 832 school districts, Board of Cooperative Educational Services (BOCES) and charters schools by 2010. The State Comptroller’s office has completed more than 280 school audits and has approximately 225 audits currently underway.


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