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September 1, 2009

 

DiNapoli's Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Bemus Point Central School District, Delhi Central School District, Huntington Union Free School District, Kings Park Central School District, Parishville-Hopkinton Central School District, Ripley Central School District and Union Springs Central 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.”

Bemus Point CSD – Policies and Procedures (Chautauqua County)
Auditors found the procedures established by district officials over purchasing, cash disbursement and inventory were not appropriately designed or operating effectively. The superintendent did not review purchase orders or provide oversight of the orders placed with vendors, with the exception of purchases made by credit card. In addition, the vendors were not notified that district purchases could only be made through the use of approved purchase orders. While the district had policies over recording assets and maintaining inventory records, it lacked procedures to ensure asset records were accurate and complete.

Delhi CSD – Internal Controls Over Selected Financial Operations (Delaware County)
The audit found the board failed to comply with State Education Department (SED) regulations and Education Law in its claims processing and criminal background checks of employees and independent subcontractors. Auditors also found district personnel did not ensure that a clearance for employment was received from SED for three employees. In October 2007, the board appointed an alternate claims auditor to act in the absence of the claims auditor. However, the alternate claims auditor was a spouse of a board member. Auditors’ testing did not identify any improper or unsupported payments or any material discrepancies.

Huntington UFSD – Computer Access Controls (Suffolk County)
Auditors found an accounting firm was inappropriately assigned access to the district’s financial accounting system and had the ability to add, update and delete data in the budget maintenance area. Auditors also found that eight business office employees had access to aspects of the accounting system that were not required as part of their job functions. This access resulted in inadequate segregation of duties.

Kings Park CSD – Internal Controls Over Payroll (Suffolk County)
Auditors found district officials did not adopt written policies for payroll processing and the informal procedures followed by staff were inadequate. Leave time accrual balances were not consistent with provisions of collective bargaining agreements or individual contracts, and leave time usage was not properly charged against employees’ leave accrual records. The failure to maintain accurate leave accrual records resulted in the incorrect crediting of accrued vacation and sick time to five employees and may have resulted in overpayments of more than $10,000 to a former official. In addition, the district did not control employee overtime by requiring written pre-approval, supporting documentation and verification of time worked, resulting in approximately $8,500 in overtime payments that were not properly authorized for four employees. Finally, district officials failed to obtain proper board approval when they allowed a former official to receive a $7,500 stipend.

Parishville-Hopkinton CSD – Internal Controls Over Payroll and Computerized Financial Application Systems (St. Lawrence County)
Auditors found officials did not properly segregate duties over payroll and the computerized financial application system. The district did not properly segregate the payroll clerk’s duties and the treasurer did not maintain control over her electronic signature. In addition, the business manager was the administrator for the district’s financial application system and had the ability to add and delete users, change user access privileges and essentially control all aspects of the application. Auditors did not find any unauthorized transactions.

Ripley CSD – Internal Controls Over the Timekeeping System (Chautauqua County)
The audit found the district spent more than $7,000 to purchase the electronic timekeeping system. However, the district failed to require that the system be used to ensure that employees were only compensated and received benefits for the hours they were expected to work. The inconsistent use of the timekeeping system, the ability of the payroll clerk to adjust records without documented authorization and the lack of approval of time worked by department supervisors, resulted in overpayments to employees.

Union Springs CSD – Financial Condition and Intermunicipal Consolidation and Cooperation (Cayuga County)
The audit found the district did not take adequate action to address the excessive fund balance in the general fund. As of June 2008, the unreserved general fund balance totaled $1.3 million. However, district officials appropriated only $200,000 to reduce the tax levy. As a result, the fund balance was almost twice the amount allowed by law. The district took some positive steps in its effort to consolidate services. The district established a joint athletic agreement with the Southern Cayuga Central School District. This program provided the district with additional services at a reduced cost to the taxpayers.

Click here to view the audits above. If you have any questions or would like a comment from the Comptroller’s office regarding the audits above, please call 518-474-4015.


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