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NYS Comptroller

THOMAS P. DiNAPOLI

News

From the Office of the New York State Comptroller

Thomas P. DiNapoli

August 24, 2016, Contact: Press Office (518) 474-4015

State Comptroller DiNapoli Releases School Audits

New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Barker Central School District, Cheektowaga Central School District, Dutchess County Board of Cooperative Educational Services (BOCES), Half Hollow Hills Central School District, Horseheads Central School District, Smithtown Central School District and the West Irondequoit Central School District.

State Comptroller DiNapoli has made it a priority to audit school district, BOCES and charter school finances and operations to ensure money is being spent appropriately and effectively. The Comptroller’s audits are designed to help schools improve their financial management practices and ensure proper policies and procedures are in place to protect taxpayer dollars from waste, fraud and abuse. New York’s school districts annually spend approximately $60 billion in federal, state and local funds.

For additional background or a comment on a specific audit, please contact Brian Butry at 518-474-4015 or email: bbutry@osc.state.ny.us.

Barker Central School District – Purchasing (Erie County)
Auditors tested 43 claims totaling $96,409 to determine if they contained documentation indicating that district officials sought quotes from various sources before making the purchase. Of these, 26 claims totaling $47,288 lacked evidence that the purchaser sought a sufficient number of price quotes from various sources. Furthermore, the claims auditor was unaware of the district’s informal policy for securing price quotes for purchases under the competitive bidding thresholds.

Cheektowaga Central School District – Employee Compensation and Benefit Payments (Erie County)
The board did not formally document its approval for three administrators’ salary payments totaling more than $460,000 and benefits such as health insurance, for which the district paid approximately $80,000 during the audit period. This occurred because the board has not adopted a payroll policy and district officials have not established specific procedures to provide guidance and to ensure that employee compensation and benefit payments are accurate, properly approved and supported.

Dutchess County Board of Cooperative Educational Services (BOCES) – User Access Rights (2016M-213)
BOCES officials have not implemented appropriate access controls and did not implement procedures to delete inactive employees from the active directory and the accounting system on a timely basis. As a result of these weaknesses, BOCES’ computerized data is at an increased risk of loss or misuse due to unauthorized access. In addition, BOCES officials have not implemented access controls to ensure proper segregation of duties in the computer system or limited access to users based on their job descriptions and responsibilities.

Half Hollow Hills Central School District – Procurement (Suffolk County)
Auditors reviewed 25 purchases totaling $109,213 that were subject to competitive quotes in accordance with the district’s procurement policy and found that 16 of these purchases were purchased using state and county contracts, which is an allowable exception to obtaining bids and quotes. Of the remaining purchases, five contained appropriate documentation indicating they were purchased from a sole source vendor and four were made after officials obtained the required number of quotes

Horseheads Central School District – Financial Condition (Schuyler County)
Officials overestimated general fund appropriations for the 2012-13 through 2014-15 fiscal years by $14.9 million (7 percent), which resulted in operating surpluses totaling $2.4 million. During this period, the district levied an additional $1.6 million in real property taxes and appropriated fund balance totaling $16 million and reserves totaling $258,440 that were not needed to finance operations as planned. This resulted in the district’s unrestricted fund balance exceeding the 4 percent statutory limit ranging from 14.1 to 18.9 percent. The district is also projected to not use any of the appropriated fund balance totaling $4.5 million for 2015-16. In addition, the district had two reserves totaling $2.6 million that were overfunded, overstated a liability totaling $638,885 and did not transfer unused flex spending moneys totaling $250,047 to the general fund, which further increases the excessive amount of unrestricted fund balance. When combining the unused appropriated fund balance for the ensuing year and reserves with the other overstatements and excesses, the district’s recalculated unrestricted fund balance was between 25 and 30 percent of the ensuing year’s appropriations, further exceeding the statutory limit.

Smithtown Central School District – Capital Projects (Suffolk County)
District officials did not properly manage and account for the district’s capital projects. Auditors reviewed four projects with authorizations totaling $144 million and expenditures of $142.6 million as of June 30, 2015. The board did not authorize an appropriation for one project and did not effectively monitor the four projects. As a result, the district has more than $1.3 million from completed projects that has not been returned to its source and over $107,000 in expenditures that did not have an authorized budget appropriation.

West Irondequoit Central School District – Financial Management and Separation Payments (Monroe County)
The board overestimated expenditures by an average of nearly 8 percent from fiscal years 2012-13 through 2014-15, which generated approximately $2.1 million in operating surpluses. The board also budgeted for operating deficits during this time by appropriating fund balance each year, although these funds were not needed due to the operating surpluses generated by the unrealistic budgets. When adding back unused appropriated fund balance, the district’s recalculated unrestricted fund balance exceeded the statutory limit each year by more than 7.4 percent of the ensuing year’s budget.

For access to state and local government spending and nearly 50,000 state contracts, visit OpenBookNY. The easy-to-use website was created by Comptroller DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.

Albany Phone: (518) 474-4015 Fax: (518) 473-8940
NYC Phone: (212) 383-1388 Fax: (212) 681-7677
Internet: www.osc.state.ny.us
E-Mail: press@osc.state.ny.us