New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Arkport Central School District, Erie 2-Chautauqua-Cattaraugus Board of Cooperative Educational Services, Fabius-Pompey Central School District Indian River Central School District, Jamesville – Dewitt Central School District and the Rye Neck 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].
While the board has not adopted written policies and district officials have not developed written procedures over the payroll function, auditors found no significant exceptions with the accuracy of the payment of salaries, wages or separation payments. However, opportunities exist for the board and district officials to improve internal controls over the payroll process.
Erie 2-Chautauqua-Cattaraugus Board of Cooperative Educational Services – Adult Education Program and Professional Services (2016M-206)
BOCES officials could not provide evidence to indicate that the established fees for the adult education services were reasonable or related to the cost of providing these services. In addition, district officials did not seek competition for eight professional services and insurance totaling approximately $419,000.
District officials could minimize risk by better managing network user accounts and security settings. In addition, the district should configure a log-on banner to inform users of the potential consequences of unauthorized access.
The board and district officials did not develop reasonable budgets or effectively manage the district’s financial condition to ensure that the general fund’s unrestricted fund balance was within the statutory limit. Over the last five years, district officials underestimated revenues by $74.2 million and overestimated expenditures by $22.3 million. The district appropriated over $81 million in fund balance, but only needed about $4.7 million to finance operations. Overall, these budgeting practices generated approximately $15.2 million in operating surpluses. As a result, the district’s recalculated year-end unrestricted fund balance exceeded the 4 percent statutory limit by up to 27 percentage points.
The district’s purchasing policy does not provide guidance for soliciting competition when procuring professional services. In one instance, auditors found district officials overpaid a contract by nearly $58,000. In addition, the board did not develop guidance for purchases costing less than the competitive bidding thresholds.
The board and district officials need to improve controls over the district’s information technology assets. The board has not developed adequate policy and procedures to ensure that district employees receive proper cyber security training to protect district assets.
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.