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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Buffalo Academy of Science Charter School – School Building Lease (2013M-138)


Released: July 26, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the School’s process for selecting and negotiating the related financial terms to obtain building space for school operations for the period July 1, 2006, to April 22, 2013.

Background

The Buffalo Academy of Science Charter School is located in the City of Buffalo and was established in 2004. The Buffalo Academy of Science Charter School is governed by a Board of Trustees which comprises five members. The School’s 2012-13 fiscal year budgeted operating expenses totaled approximately $5 million.

Key Finding

  • The Board did not ensure that it appropriately identified and evaluated available options before deciding to lease a building. The process used to select a firm to acquire and renovate a building on the Board’s behalf was not transparent, and we question whether it was an arm’s length transaction. The Board selected an unlikely firm, a nonprofit educational services corporation (Corporation) from the New York-New Jersey metropolitan area that did not have any apparent real estate experience. We also found that the terms and conditions of the lease agreement appear to benefit the Corporation more than the School. We estimate that the lease payments could exceed the Corporation’s costs by more than $4.4 million.

Key Recommendations

  • Ensure that all proceedings are properly documented in the minutes and all such records maintained by the Board secretary.
  • Conduct site selection reviews and cost analysis for real estate transactions and ensure transparency in conducting its proceedings.

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