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October 13, 2009

DiNapoli’s Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Fayetteville-Manlius Central School District, Thousand Islands Central School District, Wallkill Central School District and Wantagh Union Free School District.

“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.”

Fayetteville-Manlius CSD – Internal Controls Over Selected Financial Activities (Madison and Onondaga counties)
The audit found district officials did not ensure that purchasing policies were implemented as designed. The board adopted a purchasing policy and administrative regulation, but district officials did not always follow the regulation for competitive bidding and obtaining price quotes for procurements below competitive bidding thresholds. In addition, district officials awarded professional service contracts without the benefit of competition and the board did not enter into written agreements with two professional service providers. Finally, internal controls over the cash-receipt process were not appropriately designed or operating effectively because district officials did not segregate recordkeeping and cash handling functions for health insurance contributions and there were no procedures to compare cash logs with bank statement deposits.

Thousand Islands CSD – Internal Controls Over Selected Financial Operations (Jefferson County)
Auditors found the board approved contracts and payments to three private corporations that were one-third owned by a board member. From July 2006 to June 2008, the district paid these corporations collectively more than $85,000 for various goods and services. Auditors concluded that the board member had a prohibited interest in the district’s contracts with these corporations and had not publicly disclosed his interest in these contracts. In addition, the board retained its authority to audit claims and authorize their payment but the board did not audit claims properly. District officials did not develop procedures for procuring goods and services that were not required to be bid, and determining at what dollar amount each method will be used. Finally, district management did not adopt written policies and procedures to provide internal controls over cash receipts for post-employment health insurance benefits and did not adequately segregate duties over an account clerk’s receipt of post-employment health insurance contributions.

Wallkill CSD – Internal Controls Over Selected Financial Operations (Orange and Ulster counties)
The audit found district officials need to improve internal controls over cash disbursements. The treasurer’s access rights to computer data were incompatible with the duties of the treasurer. District officials also did not establish formal written policies or procedures regarding wire transfers and electronic funds transfers. Auditors also found the district could save taxpayers up to $54,000 each year if it processed checks in house rather than contracting with the Mid-Hudson Regional Information Center. Generally, auditors found controls over payroll were appropriately designed and operating effectively.

Wantagh UFSD – Internal Controls Over Selected Financial Operations (Nassau County)
Auditors found the board did not establish adequate controls over the administration of its summer programs. The district allowed Wantagh Foundation for Educational Excellence and the Parent-Teacher Association Counsel to provide services to summer programs for the district without entering into written agreements with either of these entities prior to the performance of services. In 2006-07, the district paid more than $225,000 to the Foundation and in 2007-08, that amount increased to more than $282,000. The PTA provides services to the summer recreation program, which netted approximately $18,000 in 2006-07, and approximately $39,000 in 2007-08. In addition, district officials did not establish comprehensive policies and procedures to ensure employees receive only payments and benefits to which they are entitled. Auditors also found the board was provided with incomplete treasurer’s reports. Finally, the district needs to improve controls over its information technology operations.

Click on the above to view the audit. If you have any questions or would like a comment from the Comptroller’s office regarding the audits above, please contact 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 660 school audits and approximately 65 school audits are currently underway.


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