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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Kendall Central School District – Independent Audit Services (2011M-206)


Released: January 6, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to determine the adequacy of the procurement of audit services and the effectiveness of such audit services as a means for the timely detection of errors and irregularities for the July 1, 2009 to June 30, 2010 fiscal year.

Background

The Kendall Central School District is located in Orleans and Monroe Counties. The District is governed by the Board of Education which comprises five elected members. For the fiscal year ended June 30, 2010, the general fund’s total expenditures were approximately $15 million.

Key Findings

  • District officials did not procure independent audit services in accordance with established policies and procedures. Instead of evaluating proposals based on quality (such as experience and professional competence) and cost, District officials selected the CPA who had submitted the lowest-cost proposal. As a result, the District selected a CPA who provided inadequate audit services.
  • We reviewed the audit services that the CPA provided to the District for the 2009-10 fiscal year and had serious concerns regarding his documentation and judgment used. In fact, our previous audit found that the District concealed more than $7.85 million in fund balance that should have been used to benefit taxpayers; the CPA either initiated, or allowed the District to engage in, these practices. Therefore, we strongly suggest that the District select a more qualified external auditor. We will be referring our audit report to the State Board for Public Accountancy.

Key Recommendations

  • Follow the District’s written policies and procedures for the procurement of independent audit services and award contracts to an appropriately qualified firm offering the most cost-effective proposal.
  • Effectively communicate with the District’s external auditor.
  • Engage the services of a different external auditor.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236