New York State Comptroller Thomas P. DiNapoli today announced the following school district audits have been issued.
A review of 24 purchases totaling about $128,000 found that district officials did not seek competition by obtaining oral or written quotes for 18 of those purchases (75 percent) totaling $81,500. District officials also did not seek competition for services from five of the six professional service providers reviewed. These providers were paid $457,700 during the audit period.
Auditors found that signed checks were printed before the claims auditor reviewed and approved claims. As a result, claims for 213 check disbursements totaling $845,215 were not audited and approved prior to payment. Auditors also found credit card claims, paid by wire transfers, were not audited and approved prior to payment and 38 of 105 credit card charges totaling $16,664 were not adequately supported.
District officials did not periodically seek competition for services from five professional service providers who were paid a total of $911,795 during the audit period.
Auditors determined that board and district officials can better manage fund balance and reserves. As of June 30, 2019, surplus fund balance was nearly $2.9 million (14 percent of the 2019-20 budgeted appropriations), exceeding the statutory limit by more than $2 million or 10 percentage points. The board and district officials improperly restricted $2.2 million in two reserves and agency funds. Agency funds are for example, funds accumulated for employee flexible spending plans and student extracurricular activities which are accounted for in this fund pending payment at a later date.
The board appropriated approximately $3.9 million in fund balance and reserves from 2016-17 through 2018-19, but only used approximately $218,000. The tax certiorari reserve was overfunded by nearly $1.9 million as of June 30, 2019. When unused appropriated fund balance and the overfunded reserve were added back to the surplus fund balance, the district’s recalculated surplus balance exceeded the statutory limit each of the last three fiscal years, ranging from 3.2 percentage points to 9.5 percentage points over the limit.
The board did not provide adequate oversight of the charter management organization’s work or actively direct and monitor financial operations. The charter management organization provided the school’s curriculum and performed all aspects of financial transactions with little oversight. Auditors found they failed to sufficiently act as the school’s audit liaison and no audit committee acted independently from the company during the audit period.
District officials did not review or reconcile electronic payments with cash receipts records to verify that all amounts were collected and remitted to the district. As a result, the district did not initially receive more than $5,500 in fees recorded as collected but not remitted by a vendor in January 2019. In January 2020, the vendor reimbursed the district for the lost revenue. In addition, the board did not adopt written enforcement policies for overdue accounts and the coordinator did not ensure all overdue accounts were invoiced in a timely manner.
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