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October 22, 2009

Improved Oversight Needed at
Onondaga-Cortland-Madison BOCES

Onondaga-Cortland-Madison Board of Cooperative Educational Services (BOCES) kept approximately $1 million of surplus moneys to fund BOCES reserves without clearly disclosing this information to its component and participating districts, denying the districts a voice in how these moneys are spent, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“Transparency is the hallmark of good government,” DiNapoli said. “In tough fiscal times, when every dime counts, school districts and taxpayers are entitled to a say in how their money is spent. A million dollars could provide significant tax relief. This BOCES needs to be more open about its finances.”

DiNapoli’s auditors found BOCES overfunded its employee benefit and accrued liability reserve fund (EBALR) by $2.3 million and established a workers compensation reserve without legal authority.

Under General Municipal Law, employee benefit and accrued liability reserve funds can only be used for employees’ accumulated leave benefits that are paid directly to employees when they no longer work for the school district and administrative costs associated with these payments.

School districts cannot use EBALR funds to pay for other post-employment benefits, such as health or life insurance, yet BOCES had designated nearly $2.3 million of its EBALR reserves for those purposes.

In addition, BOCES established the workers’ compensation reserve without legal authority. This reserve had a balance totaling approximately $420,000 as of June 30, 2008. By establishing this reserve, BOCES kept district moneys that could otherwise have been used to finance the organization’s shared services, or allocated as surplus funds to participating school districts.

DiNapoli’s auditors also found deficiencies in BOCES’ claims auditing process.

DiNapoli’s auditors recommended BOCES officials:

  • Discontinue the use of the reserves that BOCES is not legally authorized to have. The funds in this reserve should be returned to operating funds and properly apportioned to the component and participating school districts;
  • Obtain Board approval to allocate surplus funds to the reserves at the end of the fiscal year;
  • Ensure that school districts are properly notified of BOCES’ actual results of operations, including all surplus funds due and any specific amounts allocated to reserves; and
  • Ensure that interest is appropriately allocated to reserve funds according to statutory requirements
  • Ensure the claims auditor position functions independently of the business office, and that it properly audits all claims before they are paid.

BOCES officials agreed with some of DiNapoli’s recommendations.

For a complete copy of the audit, visit

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 665 school audits and more than 60 school audits are currently underway.


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