THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234

 

TO:

The Honorable the Members of the Board of Regents

FROM:

Michael Abbott

COMMITTEE:

Audits

TITLE OF ITEM:

Audit Activities

DATE OF SUBMISSION:

February 27, 2004

PROPOSED HANDLING:

Discussion

RATIONALE FOR ITEM:

Enable the Board of Regents to review audits

STRATEGIC GOAL:

5

AUTHORIZATION(S):

 

 

SUMMARY:

 

The following materials are attached.

 

·        Roadmap

·        Minutes of February Meeting (Attachment I)

·        Audit Report Abstract (Attachment II)

·        Audit Reports

 

 

REGENTS SUBCOMMITTEE

ON AUDITS

MEETING ROADMAP

Date:   March 22, 2004

Time:  5:00 - 6:00 pm

Location:  Room 146 EB 

TOPIC

OUTCOME

WHO

MINUTES

Opening Remarks

 

Chair

2

Review Agenda/Minutes (Attachment I)

Approval

Sheldon

1

Department’s Single Audit

Understand results

KPMG Staff

20

Audit Report Abstracts (Attachment II)

Questions addressed

SED and OSC Staff

20

NYC Board of Education

   Audit Coverage

Update

Conway

15

Next Session

Preview

Staff

2

 

 

 

 

 

 

 

Attachment I

 

MEETING OF THE REGENTS SUBCOMMITTEE ON AUDITS

February 23, 2004

 

Subcommittee Members in Attendance:

 

Regent Geraldine D. Chapey, Chair

Regent Joseph E. Bowman

Regent Harry Phillips, 3rd

 

Discussion Items

 

Regent Chapey opened the meeting by welcoming everyone and commending the audit staff on their efforts at outreach and partnership in pursuing issues related to improved accountability. Regent Chapey also reminded the members of their responsibilities under Regents goal number 5; “Resources under our care will be used or maintained in the public interest.”

 

Previous Meeting Minutes

 

The Subcommittee approved the minutes of the prior meeting.

 

Old Business

 

Staff briefed the members on the status of the Attorney General’s letter regarding changes in the accounting profession. The Chancellor has responded to the letter and pointed out that the Regents have led a comprehensive effort focused on improving the accounting profession. Staff also followed up on a previous discussion of the counting of student dropouts. It was pointed out that dropouts are no longer used as a school accountability measure; however, districts are still required to report the data.

 

Audits

 

OAS staff were available to answer the Regents questions on the following audits:

 

 

Training provided by the New York State Society of Certified Public Accountants (Society)

 

The members were briefed on the status of the Society's offer to provide training to school districts experiencing fiscal stress. A curriculum has been developed and is being reviewed by managers within the Society.  

 

School Districts’ Financial Condition 2002-03

 

Staff handed out two documents. The first was an overview of Department activities to monitor school districts’ financial condition and includes a list of the eight districts identified as having indicators of fiscal stress based on June 30, 2003 financial data. The second document was entitled Fiscal fitness and was developed to assist boards of education in exercising their oversight responsibility for public funds.

 

Department staff provided some examples of practices found in districts experiencing fiscal stress:

 

 

Staff also highlighted some possible solutions:

 

 

It was suggested that perhaps a future presentation could be made which explains some of the accounting terminology as it relates to school districts’ financial conditions. There was also a discussion of the Yonkers City School District’s financial condition. A concern was expressed that they may be facing some fiscal difficulties in the next several years.

 

 

Attachment II

 

Audit Report Abstract

Regents Subcommittee on Audits

March 2004

 

Office of Audit Services

Audit

Major Finding

Recommendations/

Response

Madison-Oneida Board of Cooperative Educational Services

(BOC-1299-6)

5th and 6th Judicial Districts

$7,806 adjustment

 

The audit found that the BOCES had overstated eligible EPE contact hours by 1,630. This resulted in the BOCES receiving $7,806 in excess EPE aid.  The BOCES had inadequate procedures for reporting information on Adult Education for the Report Card. Tuition rates contained in the Chapter 602 report were not reported in accordance with instructions.

 

The audit also found opportunities to improve management processes in the areas of travel reimbursement and transaction classifications.

 

The BOCES has implemented or partially implemented all of the 25 recommendations contained in the prior audit report.

26 recommendations

 

The report recommends that BOCES improve or develop new policies and procedures in several areas related to the EPE program and adjust the Adult Education computer database to eliminate ineligible contact hours being reported to the Department.

 

The report further recommends that procedures be established and documentation be maintained to ensure accurate information is being reported on the Report Card and the Chapter 602 report.

 

The report recommends establishing written travel guidelines, implementing policies and procedures related to travel reimbursement and ensuring that all transactions are accounted for in accordance with Generally Accepted Accounting Principles.

 

BOCES officials generally agree with the recommendations. They disagree with one recommendation related to using the federal per diem rates for travel reimbursement. BOCES officials state that they reimburse for actual and necessary expenses.

Follow Up Report on Oversight of School Districts' Special Education Classification and Placement Processes for School-Age Children

2003-F-15

$0 adjustment

 

The initial audit (2000-S-46) issued on June 11, 2002 concluded that VESID oversight may not be sufficient because it is not adequately targeting formal reviews of special education programs to those districts that pose the highest risk of noncompliance with applicable laws and/or program underperformance.  The audit further concluded that VESID should maintain data to identify and rank the potential for deficiencies in districts' special education programs.

 

The initial audit also found that VESID does not use the review process to formally question the propriety of districts' classification and placement decisions or students’ need for related services.

 

The follow-up review found that the Department has taken significant action to address the matters addressed in the initial report.

5 recommendations

 

The original audit report contained recommendations calling for VESID to annually perform a formal risk assessment to identify schools in most need of review, to target resources toward conducting formal reviews of districts with the highest risk, and while on-site, assess the propriety of classifications and placements.  One recommendation calls for VESID to remind school districts of required record keeping.  A final recommendation asks that VESID follow up with school districts identified in the report.

 

The follow-up review found that VESID has implemented three recommendations and partially implemented two.  VESID has fully implemented the recommendations regarding the annual performance of a risk assessment, targeting resources toward those districts with the highest risk and following up with districts visited in the first audit.

 

VESID has partially implemented the recommendation to assess the propriety of special education placements and classifications during on-site reviews. VESID officials point out that the Committee on Special Education makes those decisions. VESID staff will comment on placements and classification when there are regulatory violations.

 

The original audit recommended that VESID formally remind districts to perform certain activities related to placements and classifications.  In response, VESID has issued a new guidebook. However, VESID officials maintain that districts are not required to perform all of the activities recommended in the initial audit.