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October 30, 2009

Poor Budget Practices Cited at
Jasper-Troupsburg School District

Poor oversight by the Jasper-Troupsburg Central School District led to improper payments to administrators, failures to claim Medicaid reimbursement revenue, inaccurate budgets and a poorly controlled procurement process, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“Taxpayers expect school districts to spend their tax dollars wisely and responsibly,” DiNapoli said. “Families across New York are watching their finances closely. Now more than ever, school districts need to do the same. New Yorkers can’t afford to pay artificially inflated school taxes.”

DiNapoli’s auditors found that the District annually presented inaccurate and unrealistic budgets for voter approval. Among other errors, budgets presented for voter approval incorrectly combined fund revenue and appropriations amounts and excluded more than $600,000 annually from budgeted state aid revenue. As a result, District taxpayers may have paid more than necessary for school operations. After discussions with DiNapoli’s auditors, the district’s 2009-2010 budget showed improved accuracy and transparency.

The district’s debt service fund also holds about $214,000 that could be used for other purposes to benefit taxpayers.

Auditors determined the board failed to follow its own policy to annually approve administrators’ salaries and benefits, and allowed the former superintendent to overpay two administrators. As a result, the district improperly paid $109,696 in salary increases, $22,000 for a retirement incentive the employee was not eligible to receive, and $2,261 from a flexible benefits program after the reimbursement period had expired.

The District and the State each potentially lost about $112,388 in Medicaid reimbursements for the period July 1, 2006 through April 30, 2008 because the district lacked policies and procedures for data collection, documentation, and the submission of claims, and did not effectively monitor the reimbursement process.

Auditors discovered that none of the 20 purchases they reviewed, totaling $48,945, complied with the district’s purchasing policy. Purchases from five vendors totaling $277,480 were not competitively bid as required, professional services were not obtained using an RFP and credit card purchases totaling $11,231 were not properly authorized.

Additionally, the district’s claims auditor was not independent, had no formal guidelines for her duties, and did not report to the school board.

During the audit period, four of the seven school board members had not received any fiscal oversight training, even though they had served for three to 16 years. Two of the four board members were not required to have the training until re-elected and they have decided not to attend the training until that time. The other two board members cited a lack of time and knowledge about the requirement.

Auditors noted that three new board members have been added since the 2007-2008 fiscal year and that the new board appears to be taking a more active role in overseeing District operations.

DiNapoli’s auditors made numerous recommendations to the district, including:

  • continuing the improvements adopted in the preparation and approval of the 2009-2010 budget.
  • using the surplus fund balance identified to increase reserves, finance one-time expenses, pay off debt or reduce property taxes.
  • recovering the improper payments
  • ensuring that all salary and benefit payments to administrators are based on board-approved contracts or agreements.
  • review and update its code of ethics to include a whistleblower protection provision.

District officials generally agreed with DiNapoli’s findings and recommendations, and indicated they have started corrective actions.

For a copy of the full 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 are currently underway.



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