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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Andover Central School District – Internal Controls Over Reserve Funds (2013M-162)


Released: September 13, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to review internal controls over reserve funds for the period July 1, 2007, through April 30, 2013.

Background

The Andover Central School District is located in Allegany and Steuben Counties. The District is governed by the Board of Education composed of five elected members. The District's budgeted expenditures for the 2012-13 fiscal year were $8.2 million.

Key Findings

Internal controls over reserve funds are not appropriately designed or operating effectively.

  • District policy provides that an annual report of District reserves must be prepared and submitted to the Board for review that includes a summary statement of projected use and need of the reserve funds. However, the annual report prepared by the Business Administrator does not include a summary statement. As a result, the Board’s ability to monitor the projected use and need of reserve funds could be limited.
  • Currently the District has more than $1 million in a debt service reserve that District officials could not associate with any outstanding debt, and more than $1.1 million in general fund reserves that exceeded reasonable needs of the District.

Key Recommendations

  • Ensure that the Business Administrator includes a summary statement of the projected use and need of reserve funds in the annual report on reserves to the Board.
  • Attempt to identify the source of the money remaining in the debt service fund. Review reserves and determine if the amounts reserved are necessary and reasonable.

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