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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Norwich City School District – Financial Condition and Cafeteria Operations (2014M-143)


Released: August 1, 2014 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to assess the District’s financial condition and examine the internal controls over cafeteria operations for the period July 1, 2012 through January 22, 2014.

Background

The Norwich City School District is located in Chenango County. The District, which is governed by an elected seven-member Board of Education, operates four schools with approximately 1,950 students. Budgeted appropriations for the 2013-14 fiscal year totaled approximately $38 million.

Key Findings

  • Fund balance has consistently been used for operations and officials have consistently overestimated budgeted appropriations and revenues.
  • The school lunch fund has had recurring deficits.
  • Free meals were recorded without documentation, causing lunch participation figures to be inflated and the claiming of reimbursements to which the District is not entitled.
  • Unpaid school lunch balances totaled $36,000 from September 2012 through February 2014, adjustments were made to accounts without approval and voids made by food service employees were not reviewed or approved.
  • Cafeteria inventory counts were not accurate.

Key Recommendations

  • Closely monitor the level of unrestricted fund balance, reduce reliance on fund balance as a financing source and develop revenue and appropriations estimates that are realistic.
  • Analyze cafeteria operations to identify potential efficiencies.
  • Only record actual meals served and maintain records to support adjustments.
  • Adopt policies and procedures for unpaid accounts, daily cash register reconciliation and approval of adjustments and voids to accounts.
  • Maintain perpetual cafeteria inventory records, resolve them to physical inventories and resolve any differences.

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