New York State Comptroller Thomas P. DiNapoli today announced the following school district audits have been issued.
District officials did not appropriately track and inventory IT equipment. They did not adopt a comprehensive written policy for establishing and maintaining IT equipment inventory or maintain a complete and accurate IT equipment inventory or perform an annual physical inventory. Officials could not locate 229 staff computers and 62 tablets and paid approximately $17,000 in annual service fees in the 2021-22 fiscal year for missing devices.
East Bloomfield Central School District – Network and Financial Software Access Controls (Ontario County)
District officials did not ensure that network and financial software access controls were adequate to protect district IT systems and data from unauthorized access or loss. Sensitive network and financial software access control weaknesses were communicated confidentially to officials. In addition, the district had 250 unneeded network user accounts, including two with administrative permissions, and the assistant superintendent for business and operations had excessive administrative permissions in the financial software, which allowed them to potentially control all phases of financial transactions. Officials paid BOCES $539,644 for information technology services in 2020-21 without defining roles and responsibilities for services. As a result, the roles and responsibilities of each party may not be understood by all parties resulting in cybersecurity gaps.
While the board and district officials made some progress in implementing prior audit recommendations, they must continue to improve their financial condition management, otherwise more taxes will be levied than are needed to fund operations. From 2017-18 through 2020-21, the board underestimated general fund revenues by $68.8 million and overestimated appropriations by $29.5 million. Additionally, the district’s reported surplus fund balance as of June 30, 2021 was 10%, exceeding the statutory limit of 4%. When unused appropriated fund balance is added back, the recalculated surplus fund balance totals $27.8 million, exceeding the statutory limit by $24 million.
The board and district officials did not properly manage fund balance in accordance with statute. As of June 30, 2021, surplus fund balance exceeded the 4% statutory limit by approximately $600,000, or 5.4 percentage points. When the projected unused appropriated fund balance of $720,000 is added back, the recalculated surplus fund balance exceeded the statutory limit by $1.3 million, or 11.9 percentage points. The board and district officials did not develop and adopt a written multiyear financial plan or fund balance policy.
The district did not maximize Medicaid reimbursements by claiming for all eligible Medicaid services provided. Claims were not submitted for reimbursement for at least 3,083 eligible services totaling $187,932. Had these services been claimed, the district would have realized revenues totaling $93,966 (50% of the Medicaid reimbursements). Between July 1, 2020 and Dec. 31, 2021, the district paid a third-party vendor $54,996 to process the district’s Medicaid claims. However, officials did not provide the vendor with all of the documentation needed for the vendor to properly file all Medicaid claims and did not adequately oversee the vendor to ensure Medicaid reimbursements were maximized.
District officials did not ensure employees’ payroll payments and leave accruals were accurate, properly approved and supported. District officials overpaid (or potentially overpaid) 30 employees a total of $113,564 in payroll and leave accrual payments, including $47,673 in overpayments to the Interim Superintendent. Thirty-six of the 104 full-time and part-time employees were not covered under a collective bargaining agreement, employment contract or board resolution. As a result, payroll staff were unable to interpret what benefits employees are entitled to receive and may be improperly providing benefits to employees.
Union Springs Central School District – Safeguarding of Personal, Private and Sensitive Information on Mobile Computing Devices (Cayuga County)
District officials did not adequately safeguard mobile computing devices (MCDs) to help prevent unauthorized access to sensitive information. Auditors also found that district officials did not establish sufficient procedures, such as establishing a district-wide data classification matrix and inventorying sensitive information in their possession, to help ensure proper safeguarding. Fourteen of the 20 district-owned MCDs auditors examined contained information that was not adequately safeguarded.
District officials did not always seek competition or comply with the district’s procurement policy when procuring professional services. District officials did not use competitive methods, as required to select 40 professional service providers who were paid more than $5.1 million during the audit period.
The board and district officials did not effectively manage fund balance. The board annually overestimated appropriations from 2016-17 through 2020-21 by an average of $943,000, or 8%.
District officials budgeted for operating deficits totaling $4.7 million from 2016-17 through 2020-21, but experienced net operating surpluses totaling $1.2 million, an operational shift of $5.9 million. The district’s surplus fund balance exceeded the 4% statutory limit in each of the last five fiscal years by $490,000 to $1.8 million, or 4.3 to 15.7 percentage points. Real property tax levies were higher than necessary, in part, because surplus fund balance in excess of the statutory limit was maintained.
District officials could not always support that competition was sought when purchasing goods and services that fell below the statutory bidding thresholds. Officials did not develop clear guidance in procedures to seek competition for purchasing goods and services that were not required to be competitively bid. They also did not follow the district’s purchasing policy for 25 purchases totaling $53,883, or adequately document they sought competition for 17 purchases totaling $27,231. Further, contract award and pricing information was lacking on seven purchases made through state contract vendors, and the district should have paid $1,028 less for three purchases.
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