New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Bradford Central School District, Corning City School District, East Moriches Union Free School District and the Merrick 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].
The board and district officials have not adopted realistic budgets or effectively managed fund balance and have allowed unrestricted fund balance to exceed the statutory limit of 4 percent for the past three fiscal years. When unused appropriated fund balance is added back, unrestricted fund balance exceeded the statutory limit by amounts ranging from $1.4 million to $1.9 million or 12.8 to 17.5 percentage points. District officials also misclassified a portion of fund balance as non-spendable, thereby improperly reducing unrestricted fund balance. Despite the significant amount of accumulated fund balance, the board and district officials continued to raise the tax levy by an average of 2 percent each year or a total of $350,000 over the last three years.
The district's procurement policy does not include procedures for the procurement of professional services. District officials did not always solicit competition through requests for proposals or obtain or retain quotes or bids. A prior audit, which was released in August 2009, recommended that the district amend the procurement policy to include requirements for awarding professional services after soliciting competition, but the district chose not to do so.
The board and district officials have established controls over the claims processing function to ensure that claims are audited adequately and properly supported. Auditors selected and reviewed 45 claims, totaling $225,049, to determine whether the claims were adequately audited and approved. The board generally ensured that claims were audited and approved before payment. However, the claims auditor did not properly identify and report all confirming purchase orders.
The district’s unrestricted fund balance exceeded the statutory maximum from July 1, 2012 through June 30, 2015. In addition, the board adopted budgets that overestimated expenditures by a total of $9.3 million and underestimated revenues by a total of $2.8 million. Operating surpluses during this period totaled $3.6 million and, therefore, fund balance appropriated by the board was not used. When considering the unused appropriated fund balance, the district’s unrestricted fund balance as of June 30, 2015 was 23 percent of the ensuing year’s budget rather than 19 percent that district officials reported. The district also maintained three reserve funds with balances totaling $1.9 million, as of June 30, 2015, and two of them were overfunded.
For access to state and local government spending and 50,000 state contracts, visit OpenBookNY. The easy-to-use website was created by Comptroller DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.