New York State Comptroller Thomas P. DiNapoli today announced the following school district audits have been issued:
Although school district officials maintain a website, certain financial information was either not posted or comprehensive, resulting in a lack of transparency. Officials did not post external audit reports, original and final annual budgets, or board meeting minutes as required.
Officials did not establish non-resident tuition (NRT) rates in the best interest of school district taxpayers. The board approved NRT contracts between the district and Wayne Highlands School District without performing a cost-benefit analysis. Over the past three school years, the board approved Wayne Highlands NRT rates that were less than the New York State Education Department’s maximum allowable rates and actual BOCES costs by a total of $1.29 million, or an average of $430,000 each school year.
District officials did not establish adequate IT controls over physical IT assets and non-student user account access to the district’s network. In addition to sensitive IT control weaknesses, auditors found that 235 IT assets costing $108,462 were not recorded in the district’s inventory records, and seven computers, two audio systems, one projector and 10 other electronic components that cost $9,266 could not be found.
Northport – East Northport Union Free School District – Extra-Classroom Activity Fund (Suffolk County)
Extra-classroom activity (ECA) funds were not properly collected, recorded, remitted, deposited, disbursed and reconciled. The district did not have proper procedures or a faculty auditor. Collections totaling $5,767 were not recorded in the accounting records and were not deposited in the bank and collections of $845,258 were missing key support. Records to support transactions totaling $134,449 were missing and 95 payment request forms totaling $66,149 either had no supporting documents or they lacked key information.
District officials did not accurately calculate separation payments or benefits for five of the 10 employees reviewed. Officials made separation payments totaling $38,477 that were inconsistent with language in the employees’ CBA or employment contract.
The board and district officials did not ensure computerized data was safeguarded. In addition to sensitive IT control weaknesses, auditors found the district had 58 unneeded user accounts and officials did not provide IT security awareness training. The board also did not adopt a written IT contingency plan.
District officials did not always use a competitive process to procure goods and services to achieve the optimal use of district resources. Auditors reviewed 40 purchases and found 21 lacked competition or documentation to support an exception from competition. District officials did not competitively procure or document an exception from soliciting competition for services provided by six professional service providers that were paid a total of $895,668. The district also did not have written agreements with three professional service providers paid $112,262.
The board and district officials did not properly manage fund balance and reserves. As of June 30, 2021, the recalculated surplus fund balance was $3.3 million, which exceeds the 4% statutory limit by 8 percentage points. District officials improperly restricted more than $1.6 million in the debt reserve fund. Workers’ compensation reserves fund balance of $836,000 can fund the average workers’ compensation expenditures for 26 years. Unemployment reserve balance of about $400,000 is nearly 200 times the average unemployment expenditure. By maintaining surplus funds in excess of the statutory limit and maintaining excess reserves, real property taxes may have been higher than necessary.
Auditors found that the significant revenue and expenditure projections in the proposed budget were reasonable. The district’s proposed budget complies with the tax levy limit because it includes a tax levy of $23,105,027, which is within the limits established by law.
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