Meeting of the Board of Regents | September 2003

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:	Daniel Tworek
TITLE OF ITEM:	Audit Activities
DATE OF SUBMISSION:	July 30, 2003
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.

REGENTS SUBCOMMITTEE ON AUDITS MEETING ROADMAP	DATE: September 2003 TIME: TBD ROOM: TBD
TOPIC	OUTCOME	WHO	MINUTES
Opening Remarks		Chair	2
Review Agenda/Minutes (Attachment I)	Approval	Sheldon	1
Audit Report Abstract (Attachment II)	Questions addressed	SED Staff	10
School Districts In Financial Stress	Update	EMSC/OAS Staff	30
Next Session	Preview	Staff	2

 

Attachment I

MEETING OF THE REGENTS SUBCOMMITTEE ON AUDITS

Tuesday, June 17, 2003

Subcommittee Members in Attendance:

Regent Geraldine D. Chapey, Chair

Regent James C. Dawson, Vice Chair

Regent Joseph E. Bowman

Regent Arnold B. Gardner

Regent Judith O. Rubin

Discussion Items

Regent Chapey opened the meeting by reminding the members of their responsibilities as described by Regents Goal Number 5. The Subcommittee recognized the valuable contributions of Daniel Tworek, Director of the Office of Audit Services (OAS), who will be retiring in August.

Previous Meeting Minutes

The Subcommittee approved the minutes of the prior meeting.

Audits

OAS staff answered Regents questions on the following audits:

• ARISE, Inc. (RF-0802-1)
• Troy School District School Lunch Fund (SD-0802-4)

Staff from the Office of the State Comptroller answered the Regents questions on the Audit of State Aid for Computer Technology (2003-MS-1). Several members felt that school districts would benefit from a wide distribution of the observations contained in the report. Staff from OAS, the Office of Elementary, Middle, Secondary and Continuing Education and the Office of the State Comptroller indicated that they would take actions to communicate the results to all school districts.

Policy Considerations for School Districts in Financial Stress

Staff provided an update on the status of the 16 schools identified as being in fiscal stress. Four of the schools are receiving deficit funding. The remaining 12 are taking other actions to reduce costs or increase funding in order to improve the fiscal position of the districts. After some discussion it was agreed that staff would study potential actions the Department can mandate to initiate remedial action by the districts and provide the Subcommittee with the results.

Staff also provided a brief overview of the Framework for Financial Condition Indicator System for NYS School Districts. The primary author of the system will be invited to provide a more detailed presentation of the process at a Subcommittee meeting in the near future.

Attachment II

Audit Report Abstract

Regents Subcommittee on Audits

June 2003

Office of Audit Services
Audit	Major Finding	Recommendations/ Response
Genesee Valley Board of Cooperative Educational Services 8th Judicial District (BOC-0102-3)	$15,941 adjustment The audit found the BOCES overstated EPE contact hours, resulting in an overpayment of $15, 941. The methodology used for calculating the Per Pupil Tuition Rates for Occupational and Special Education Class options was inaccurate. Opportunities exist for improving management processes pertaining to segregation of duties for payroll, bank reconciliations and general ledger access. The BOCES has implemented 11 of the 12 recommendations contained in the prior audit report. The remaining recommendation (implementing GASB34 regarding improving inventory system) was not fully implemented.	11 Recommendations The report recommends that the BOCES accurately calculate tuition rates and that improved controls be instituted to ensure accurate EPE claims are submitted. The report also recommends establishing procedures to strengthen internal controls in the areas of payroll, cash receipts, bank reconciliations and general ledger access. BOCES Officials concur with all of the recommendations.