New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Amherst Central School District, Friendship Central School District, Harrisville Central School District, Oswego County Board of Cooperative Educational Services, Roslyn Union Free School District and the Sag Harbor Union Free School District.
State Comptroller DiNapoli has made it a priority to audit school district, BOCES and charter school finances and operations to ensure money is being spent appropriately and effectively. The Comptroller’s audits are designed to help schools improve their financial management practices and ensure proper policies and procedures are in place to protect taxpayer dollars from waste, fraud and abuse. New York’s school districts annually spend approximately $60 billion in federal, state and local funds.
For additional background or a comment on a specific audit, please contact Brian Butry at 518-474-4015 or email: [email protected].
District officials have reduced unrestricted fund balance to within the statutory limit. However, the board did not appropriately budget for certain expenditures totaling approximately $1.4 million (2.6 percent of 2015-16 appropriations) and did not properly monitor spending during the year. As a result, the district is at risk of incurring expenditures in excess of 2015-16 appropriations and depleting its remaining unrestricted fund balance.
Although the board adopted a procurement policy that required obtaining competition for purchases not subject to bidding requirements, the purchasing agent and claims auditor did not always ensure that purchases were made in compliance with the requirements of this policy or require district officials to properly document compliance when they sought competition. Furthermore, the policy did not establish procedures for procuring professional services. A sample of 20 vendors who were paid approximately $433,000 during the period July 1, 2014 through January 6, 2016 showed that district officials could not demonstrate they sought competition when procuring professional services from four vendors who were paid approximately $42,000. District officials also did not comply with the provisions of the procurement policy when purchasing goods from four other vendors who were paid approximately $30,000.
The board needs to improve the claims auditing process. The district paid some claims without the prior approval of the responsible claims auditor. In addition, the claims auditor approved payments for non-BOCES claims that did not have adequate supporting documentation, lacked sufficient evidence showing that the goods or services were received and that exceeded the authorized purchase order amount.
BOCES had 161 employees who retired, resigned or otherwise left employment during the audit period. Auditors reviewed the terms of separation for each employee to identify those eligible for a separation payment and to determine whether the payments were properly calculated per board-approved contract terms and found 28 of these employees were eligible for separation payments totaling $336,712. While these payments generally conformed to the terms of these written agreements, BOCES officials underpaid one former employee approximately $5,200.
During the audit period, the district recorded receipts totaling $349,093. Auditors traced 30 receipts totaling $40,203 from the district’s press-numbered receipt book to bank statements to determine if the deposits were intact and recorded accurately and all cash receipts were recorded accurately and deposited intact. Press-numbered triplicate receipts are generally issued at the district office for all moneys received. However, district officials said that they do not issue a press-numbered triplicate receipt for moneys received in building locations other than the district office. In addition, the district’s cash receipts policy indicates that funds are to be deposited without delay, but it does not specify a maximum limit for the time between receipt and deposit. An audit test of 30 receipts included eight receipts that were held between 11 and 30 days before being deposited in the district’s bank accounts.
The district established an after-school elementary child care program approximately 30 years ago as a service staffed by district employees for families in need of after-school care for children in Kindergarten through Grade 5. The program was expanded in 2012-13 to include before-school care. District officials need to improve oversight of program operations. Specifically, district officials did not institute procedures governing program operations or ensure that existing procedures were consistently followed. Officials did not ensure that the director maintained adequate records, the functions of collecting, recording and depositing cash were adequately segregated or that deposits were made in a timely manner. Because district officials did not provide proper oversight, there is an increased risk that errors and irregularities could occur and remain undetected and uncorrected.