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September 22, 2009



DiNapoli’s Office Completes School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Altmar-Parish-Williamstown Central School District, Cattaraugus-Little Valley Central School District, Clinton-Essex-Warren-Washington Board of Cooperative Educational Services, Hewlett-Woodmere Union Free School District and Mt. Pleasant Blythedale 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.”

Altmar-Parish-Williamstown CSD – Financial Management and Internal Controls Over Payroll (Oswego County)
Auditors found that, even after two years of negative operating results, district officials failed to take necessary steps to ensure that internal financial reporting procedures effectively monitored actual performance against the 2007-08 budget. Auditors found that accounting records were not up-to-date or reliable, and essential financial reports for 2007-08 were not always presented to the board in a timely manner. The district established an employee benefit accrued liability reserve that was funded at a constant level of $1.1 million during the audit period. District officials could not demonstrate that all funds held in this reserve were necessary. Although the district experienced financial difficulties in recent years and continues to face a steady decline in enrollment, district officials did not have a formal long-term planning process to address future operational challenges. Finally, district officials did not adequately segregate payroll duties.

Cattaraugus-Little Valley CSD – Internal Controls Over Selected Financial Operations (Cattaraugus County)
The audit found the board did not demonstrate a positive control environment by appropriately complying with all requirements of the state-mandated Five Point Plan. Specifically, the district did not comply with fiscal oversight training, appointment of an internal auditor, appointment of an audit committee and formal audit response preparation. The board’s lack of commitment to complying with the Five Point Plan sets the wrong tone at the top, which could influence employee attitudes toward rules and regulations that are designed to safeguard district resources and taxpayer moneys. Because of the board’s lack of oversight and commitment, auditors found the district had excessive fund balance and did not have adequate controls over extra-classroom activity receipts and information technology.

Clinton-Essex-Warren-Washington BOCES – Internal Controls Over Selected Financial Activities (Clinton, Essex, Warren and Washington counties)
Auditors found BOCES did not maintain the employee benefit accrued liability reserve (EBALR) or unemployment insurance reserve in accordance with statutory requirements. The chief fiscal officer did not furnish financial reports to the board when required and $1.15 million in reserve funds were used for purposes that were not statutorily authorized. In addition, in June 2008, the EBALR had $329,487 more than necessary and the unemployment insurance reserve had enough money to cover expenditures for 26 fiscal years. In addition, the internal audit function was not performed in accordance with the Education Law. Despite this, the board reappointed and entered into another contract with the same individual for the 2008-09 fiscal year.

Hewlett-Woodmere UFSD – Internal Controls Over Selected Financial Operations (Nassau County)
The audit found the district reserved approximately $10.1 million more in its EBALR fund than its liability for compensated absences. In addition, district officials sometimes used general fund appropriations to pay employees for compensated leave benefits rather than EBALR funds. The district’s administrative salary costs for all of its administrators, excluding fringe benefits, were higher than the costs for three other neighboring school districts. The district’s costs-per-student for fringe benefits provided to its superintendent and three assistant superintendents also were approximately $45 higher than the average costs of three neighboring school districts. If the board had achieved an administrative salary and fringe benefits cost-per-student similar to the average of the other three districts in the area, it could have realized a total savings of about $838,000 in the 2006-07 fiscal year and $881,000 in 2007-08 fiscal year.

Mt. Pleasant Blythedale UFSD – Internal Controls Over Claims Processing and Construction Project Bidding (Westchester County)
Auditors found internal controls over the claims audit function were not appropriately designed or operating effectively. The board-adopted claims auditor policy was insufficient, which resulted in claims being paid prior to being audited. The board’s claims processing policies and procedures were vague. As a result, the claims auditor was not performing key functions necessary to effectively audit claims. Finally, auditors reviewed the purchases related to the district’s construction project from July 2006 through April 2009 and found that multiple contractors had payments in excess of the $20,000 threshold which requires the district to seek bids for these services.

Click on the links above for a copy of 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 640 school audits and approximately 85 school audits are currently underway.

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