New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of Bath Central School District, Berne-Knox-Westerlo Central School District, King Center Charter School, New Hyde Park-Garden City Park Union Free School District and the Sagaponack Common School District.
"In an era of limited resources and increased accountability, it's critical that schools make every dollar count," DiNapoli said. "By auditing school district and charter school finances and operations, my office continues to provide taxpayers the assurance that their money is being spent appropriately and effectively."
Officials lacked adequate bank agreements for online banking transactions. The board did not adopt an online banking policy and officials did not adequately segregate online banking duties. In addition, officials did not ensure that authorized access to online bank accounts was limited because a dedicated separate computer was not used for these transactions, personal computer use was not limited and users were not provided cybersecurity awareness training.
The business manager prepared summary budget-to-actual information and presented it to the board quarterly, however, it only included totals for revenues and expenditures. There was no detailed information for individual revenues and expenditures. Additionally, during the 2016-17 fiscal year, reports were submitted between 47 and 125 days after month end, with no reports being submitted for the months ending April 30, 2017 through the end of the audit period.
The board has not adopted adequate information technology (IT) security policies and school officials do not have formal procedures to address breach notification, disaster recovery, data backup and password security management.
The bank reconciliations reviewed were prepared in a timely manner and most were accurate. Auditors, however, found the reconciliations for the payroll account did not reflect the account's true cash balance.
District officials need to improve budgeting practices and more effectively manage the district's fund balance. In the last three fiscal years, the district experienced operating surpluses averaging $345,000 annually. As a result, unrestricted fund balance increased to $1.04 million as of June 30, 2017, or 61 percent of the ensuing year's appropriations, exceeding the statutory limit by 57 percentage points. In addition, reserve funds are overfunded and the board has not outlined the rationale, objective, funding level and conditions under which each reserve will be used.
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