Meeting of the Board of Regents | October 2007

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

TO:

Subcommittee on Audits

FROM:

Theresa E. Savo 

SUBJECT:

Board of Regents Oversight – Financial Accountability

DATE:

October 10, 2007

STRATEGIC GOAL:

Goal 5

AUTHORIZATION(S):

REGENTS SUBCOMMITTEE ON AUDITS

MEETING ROADMAP

Date:  October 2007

Time:  TBD

Location:  TBD

TOPIC

OUTCOME

WHO

MINUTES

Opening Remarks

Chair

2

Review Agenda/Minutes (Attachment I)

Approval

Conway

5

Follow-up on Previous Meetings

Information

Conway

5

Annual Report on the Activities of the Regents Subcommittee on Audits (Attachment II)

Information

Guzman

10

Annual Report of the Office of Audit Services

Information

Spring

10

Proposed Agenda of the Regents Subcommittee on Audits for October 2007 through July 2008 (Attachment III)

Information

Conway

10

Audit Report Abstracts (Attachment V)

Questions Addressed

SED and OSC Staff

15

Next Session

Preview

Staff

3

Date

Location

Topic

October 22-23, 2007

Albany

Report on the Activities of the Regents Subcommittee on Audits

Annual Report of the Office of Audit Services

Completed Audits

November

No meeting of the Board of Regents

December 13-14, 2007

Albany

Results of the New York State Financial Statement Audit (Education Department Findings)

Completed Audits

January 14-15, 2008

Albany

School District Training

Results of the New York State Single Audit (Education Department Findings)

Completed Audits

February 11-12, 2008

Albany

Audit Follow-Up Process

Completed Audits

March 17-18, 2008

Albany

Fraud, Waste and Abuse Hotline

Completed Audits

April 14-15, 2008

Albany

Completed Audits

May 19-20, 2008

Albany

Internal Controls – Annual Certification

Financial Condition of School Districts

Office of Audit Services 2008 -2010 Audit Plan (draft)

Completed Audits

June 23-24, 2008

Albany

Office of Audit Services 2008 -2010 Audit Plan (final)

Completed Audits

July 30-31, 2008

Albany

Analysis of School District Audit Findings

Completed Audits 

Office of Audit Services

Clinical Associates of the Finger Lakes

√

New York State Museum Institute

√

√

√

Our P.L.A.C.E. School

√

√

√

T.E.A.C.H.-Early Advantage

√

√

√

VESID Syracuse District Office

√

√

ARC Yates County CA-0602-10

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ARC Yates County CA-0606-1

√ 

ARC Yates County CA-0606-2

√ 

Office of the State Comptroller

Central Square CSD

√

√

√

Clifton-Fine CSD

√

√

Explore Charter School

√

√

√

Frewsburg CSD

√

√

Gates Chili CSD

√

√

George Junior Republic UFSD

√

√

√

√

Greenwich CSD

√

√

Hannibal CSD

√

√

√

√

Harpursville CSD

√

√

√

Harrisville CSD

√

√

Hermon-DeKalb CSD

√

√

Hopevale UFSD

2006M-222

√

√

√

Hopevale UFSD

2007M-81

√

√

Ilion CSD

√

√

√

Jamesville-DeWitt CSD

√

Jefferson CSD

√

√

√

Jericho UFSD

√

√

√

Keene CSD

√

√

√

√

Leake and Watts Services, Inc

√

√

Mamaroneck UFSD

√

Mayfield CSD

√

Middletown Enlarged City School District

√

Mohawk CSD

√

Morrisville-Eaton CSD

√

√

√

Nyack UFSD

√

Onondaga CSD

√

√

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Poughkeepsie City School District

√

√

Ramapo CSD

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Ravena-Coeymans-Selkirk CSD

√

√

√

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Red Hook CSD

√

√

√

√

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Saranac CSD

√

√

Schalmont CSD

√

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Sisulu-Walker Charter School of Harlem

√

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South Glens Falls CSD

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√

√

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Stamford CSD

√

√

√

Trumansburg CSD

√

√

√

VADIR

√

Waterford-Halfmoon UFSD

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Worcester CSD

√

√

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New York City Department of Education

New York City Department of Education

√

√

City of New York Office of the Comptroller

Department of Education’s Reporting of Violent, Disruptive, and Other Incidents at New York City Public High Schools

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October Total

20

4

17

20

15

16

14

0

1

1

4

May 2007

June 2007

July 2007

October 2007

Total

Procurement

9

11

12

20

52

Capital Assets

10

1

2

4

17

Claims Processing

13

3

12

17

45

Payroll

12

3

11

20

46

Cash

6

2

8

15

31

Financial Reporting

12

3

2

16

33

Information Technology

10

10

9

14

43

Capital Construction

2

1

1

0

4

Extra Classroom Activity Fund

1

1

0

1

3

Segregation of Duties

0

0

3

0

3

Budgeting

2

3

0

1

6

Conflict of Interest

0

0

0

4

4

Other

0

2

0

0

2

Total

77

40

60

112

289

Office of Audit Services

Audit

Major Finding(s)

Recommendation/Response

Clinical Associates of the Finger Lakes

SE-1104-1

7th Judicial District

$0 adjustment

Clinical Associates did not document the use of the IDEA funds allocated by the districts, and incorrectly reported IDEA revenue. They also did not maintain documentation of some of the allocation methodologies used in preparing CFR, included some unallowable costs, and incorrectly prepared the SEDCAR-1 forms.

20


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding use of IDEA funds, CFR reporting, and SEDCAR-1 reporting.

Clinical Associates officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

The Rate Setting Unit will use the results of the audit to establish audited tuition rates.

New York State Museum Institute

AI-0706-1

3rd Judicial District

$0 adjustment

The Institute’s mission statement, job descriptions, and organization chart are out of date and do not reflect current procedures. The By-Laws, Certificate of Incorporation and program Agreement with the State Education Department are also not representative of the Institute’s relationship with the museum. Additionally, the Institute management has set up an administrative fee schedule that has not been approved by the New York State Education Department.

Lastly, one employee is responsible for receiving and depositing cash, maintaining the accounting records, and performing bank reconciliations, which does not properly demonstrate segregation of duties.

21


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding internal controls, revenues, expenditures, and payroll procedures.

Institute officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Our Preschool Learning Adapted to Communication and Education (Our P.L.A.C.E. School)

Audit Approved Persuant to Education Law Section 4410

CA-1002-2

2nd Judicial District

$78,279 adjustment

The School did not comply with SED regulations and guidelines, which govern the fiscal operations for schools for children with disabilities. The School did not properly allocate expenses, and did not maintain the necessary documentation to support some of its expenses. There were also several accounting and reporting errors, and reported non-reimbursable expenses. It is recommended that an adjustment be made of $78,279 to the total reported costs.

The review of administrative expenses identified unsupported, misclassified, and/or non-reimbursable expenses per the Reimbursable Cost Manual totaling $53,765. Also, $17,138 was reclassified from the administrative expenses to Director’s compensation. During the report period, the School overstated the preschool program’s Other Than Personal Service expenses by $7,216.

The School did not calculate Full-Time Equivalent (FTE) attendance in accordance with SED regulations. The report increased FTEs for the two-month full-day program by 1.167, the ten-month full-day program by 3.763, and the ten-month half-day program by 0.063.

The School should refund excess revenue of $2,488 to SED.

There were weaknesses in the School’s accounting and administrative control structure, such as not properly safeguarding timekeeping records, personnel folders not containing required documents, travel and transportation logs not being maintained, and the school misclassifying interest income.

A sample of personnel folders were reviewed and several did not have required health results. In addition, some of the following items were also missing: proper licenses or certification, fingerprint results, resumes, and/or required payroll documents.

13


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding FTE reports, financial reporting, payroll, and revenues.

The report was amended, based on the school’s response to the draft audit report.

The School does not agree with the remaining findings and recommendations.

The Rate Setting Unit will use the results of the audit to establish audited tuition rates.

The Early Advantage for Children with Handicaps, Inc. (T.E.A.C.H.)

Audit Approved Pursuant to Education Law Section 4410

CA-0602-11

12th Judicial District

$9,574 adjustment

The School did not properly allocate expenses and did not maintain necessary documentation to support some of its expenses. The School made several accounting and reporting errors and reported non-reimbursable expenses. The audit recommends an adjustment of $9,574 to the total reported costs.

The report indicated $53,765 in inappropriate or unsupported expenses. Also, $17,138 was reclassified from the administrative expenses to director’s compensation.

The School did not calculate Full Time Equivalent (FTE) attendance in accordance with regulations. The audit increased FTEs for the two-month full-day program by .5, and decreased FTEs for the half-day program by 0.084. The audit increased FTEs for the ten-month half-day program by 0.013.

The School understated interest/dividend (tax refunds) by $456.

There were weaknesses in the School’s accounting and administrative control structure, such as not properly safeguarding timekeeping records; personnel folders not containing required documents; travel and transportation logs not being maintained; and the School failing to adhere to required bidding procedures.

11


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding FTE reports, financial reporting, payroll and revenues.

The report was amended, based on the school’s response to the draft audit report.

The school does not agree with the remaining findings and recommendations.

The Rate Setting Unit will use the results of the audit to establish audited tuition rates.

VESID Syracuse District Office

AI-0505-4

5th Judicial District

$0 adjustment

The VESID Syracuse District office has existing weaknesses regarding documentation, compliance with written policies and procedures regarding van purchases, rebates, purchase of equipment, self-employment waivers, and home modification.

Additionally, there were weaknesses with documenting the receipts of rebates, refunds, and returned checks in the consumer’s case file.

In some cases, VESID also established a policy requiring the counselor to perform certain tasks, but had not established procedures to accomplish it.

8


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding data analysis; equipment purchases; maintenance and transportation payments; waivers and rebates; refunds; and returned checks.

VESID officials generally agreed with the recommendations.  They disagreed with the recommendation on the use of counselor codes and on the development of a process to prevent backdating.

Audit of the  New York State Association of Retarded Citizens, Inc., Yates County Chapter

Audit Approved Pursuant to Education Law Section 4410

CA-0602-10

7th Judicial District

$0 adjustment

The audit determined that the School did not comply with some State Education Department regulations and guidelines that govern fiscal operations of schools for children with disabilities.

The School both under and over-reported student enrollment data for the 1996-1997 and 1997-1998 fiscal years.

The audit found that the School had overstated personal service costs, fringe benefits, other than personal service costs, equipment and property costs during the period from July 1996 to June 1998. 

1


recommendation

It is recommended that a formal time study be developed from the agency's new time sheets and utilized for future cost reporting.

The Agency generally agreed with the report recommendation and have indicated that they will use these time sheets to allocate costs to the various programs in the future.

The Rate Setting Unit will use the results of the audit to establish audited tuition rates.

Audit of the  New York State Association of Retarded Citizens, Inc., Yates County Chapter

Audit Approved Pursuant to Education Law Section 4410

CA-0606-1

7th Judicial District

$0 adjustment

The audit determined that the School did not comply with some State Education Department regulations and guidelines that govern fiscal operations of schools for children with disabilities.

The audit found that the School both under and over-reported student enrollment data during the 1998-1999 and 1999-2000 fiscal years. 

The School also overstated personal services, fringe benefits, other than personal service equipment and property costs during the same period.

1


recommendation

It is recommended that a formal time study be developed from the agency's new time sheets and utilized for future cost reporting.

The Agency generally agreed with the report recommendation and have indicated that they will use these time sheets to allocate costs to the various programs in the future.

The Rate Setting Unit will use the results of the audit to establish audited tuition rates.

Audit of the  New York State Association of Retarded Citizens, Inc., Yates County Chapter

Audit Approved Pursuant to Education Law Section 4410

CA-0606-2

7th Judicial District

$0 adjustment

The School did not comply with some State Education Department regulations and guidelines that govern fiscal operations of schools for children with disabilities.

The audit found that the School had not accurately reported student enrollment during the periods from July 2000 to June 30, 2003.  There was both under and over reporting during the period.

1


recommendation

It is recommended that a formal time study be developed from the agency's new time sheets and utilized for future cost reporting.

The Agency generally agreed with the report recommendation and have indicated that they will use these time sheets to allocate costs to the various programs in the future.

The Rate Setting Unit will use the results of the audit to establish audited tuition rates.

Office of the State Comptroller

Audit

Major Finding(s)

Recommendation/Response

Central


Square Central School District

Internal Controls Over Selected Financial Operations

2007M-116

5th Judicial District

$0 adjustment

Several deficiencies were found regarding internal controls over the claims and audit process. There was a lack of itemization for 9 claims ($11,093), 18 claims ($46,788) were missing purchasing agent approval, and a lack of required written vendor quotes for 8 purchases ($30,961).

The District processes and prints all computerized payroll checks using a computer-imprinted signature of the District treasurer, with no direct supervision. The payroll clerk also has the ability to add new employees to the computer system, update salary information, and process and distribute payroll checks, which could potentially result in unauthorized payroll disbursements.

Lastly, the District paid the former superintendent $4,800 for 120 unused, accumulated sick leave days as of the date of his retirement, of which he was not entitled.

12


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding cash disbursements and employee compensation payments.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Clifton-Fine


Central School District

Internal Controls Over Selected Financial Operations

2007M-118

4th Judicial District

$0 adjustment

Seventy-seven checks, totaling $50,956, were issued without the treasurer’s signature. Six of the checks were returned to the vendor and 71 of the checks were cashed by the vendors and cleared by the District’s bank.

The check-printing program at the BOCES facility allows duplicate checks to be produced without an entry in the accounting records and personnel did not obtain and review images of both sides of cancelled checks.

While the school board has adopted formal written policies for travel reimbursement, procurement, and capital asset management, some policies do not provide clear guidance for meeting board expectations. For example, the capital asset policy does not establish a minimum value for inventory and record keeping purposes.

8


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding internal controls over cash disbursements and board policies.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Explore Charter School  Financial Management Practices

2006-N-18

2nd Judicial District

$0 adjustment

There were weaknesses in the controls over financial operations, especially regarding procurement and disbursements and equipment inventory. Nine agreements for consultant services were reviewed, and it was found that Explore did not use a competitive procurement process for six of the agreements (totaling $182,553). There were also no written policies and procedures addressing competitive purchase practices.

Disbursements from the Petty Cash Fund were not adequately accounted for and the purposes of the disbursements were not always accounted for. Equipment inventories were also not properly controlled, because there were no inventory records and there were no physical inventories performed. There were four missing items (musical instruments and a printer/scanner) that were unable to be found during the audit period.

Lastly, it was found that undelivered paychecks were not adequately safeguarded.

10


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding financial oversight; procurement and disbursements; payroll; and equipment inventory.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Frewsburg


Central School District

Internal Controls Over Selected Financial Operations

2007M-86

8th Judicial District

$0 adjustment

The District did not have formal, written procedures to account for leave time. It was also noted that the District did not require anyone in a supervisory capacity to review and approve payroll data before payrolls were prepared. Supervisors do not properly authorize leave time for the 50 or so individuals who use time cards.

A school board member also has a prohibited interest in a contract with the District. The individual is employed by an engineering firm that does business with the District and has not officially disclosed this interest in writing.

3


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding leave time and interest in contract.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Gates-Chili


Central School District

Internal Controls Over Information Technology and Meals and Refreshment Costs

2007M-133

4th Judicial District

$0 adjustment

The school board has not established policies or procedures to ensure that the system’s equipment is secured and adequately ventilated. Only two equipment rooms were locked and only one server was secured in a climate-controlled server room. Formal policies and procedures to address potential disasters were also not adapted.

The District paid $44,226 for meals and refreshments at District functions without requiring documentation of board approval.

3


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding information technology, and meals and refreshments at District functions.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

George


Junior Republic Union Free School District

Internal Controls Over Selected Financial Activities

2007M-122

6th Judicial District

$0 adjustment

The school board did not appoint a treasurer as required by Education Law. As a result, various individuals at the District, or an outside vendor performed the treasury duties.  The vendor processed and signed payroll checks on vendor check stock which officials later distributed to employees.

The board has not adopted comprehensive network policies and procedures that require complex passwords to access the system nor are the network users required to change passwords.

Some discrepancies were found with the payroll process.  For example, out of the 46 payrolls paid during the audit period, 5 of the transfers were less than the authorized amounts by $4,724. Corrective action began while auditors were onsite, and as of March 2006, the vendor can no longer initiate wire transfers.

3


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding cash disbursements, claims processing, and password requirements.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Greenwich


Central School District

Internal Controls Over Payroll and the Computer System

2007M-155

4th Judicial District

$0 adjustment

The school board did not establish the proper policies and procedures to address the computer system used by the business office employees to record, process, and report on the District’s financial operations.

The District also failed to adequately assign user rights for the computer software. The business administrator had full administrative rights over the system, as well as full access to modules of the system. The business administrator also served as the treasurer, which allows for the responsibility and authority to prepare and print District checks; create journal entries; and access banking information. The treasurer also did not control the process of affixing his signature to District checks.

Lastly, the payroll clerk was found to have handled the majority of the aspects of payroll processing with little managerial oversight. The clerk was responsible for adding new employees into the computerized payroll system; inputting and updating salaries; and printing the payroll checks.

5


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding the computer system and payroll processing.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Hannibal


Central School District

Financial Oversight and Internal Controls Over Financial Operations

2007M-95

5th Judicial District

$0 adjustment

The District finished 2004-2005 with a general unreserved fund balance of $544,351 of which $200,000 was appropriated in the 2005-2006 budget.

Also, the financial records used to account for the District’s building construction project were incomplete in that the “change orders” were not recorded in the appropriate accounting records. The records did not reflect the various changes that had been made to the project budget and to the amounts payable under contracts that were awarded for this project.

District officials have not utilized multi-year planning to identify and help manage future operating requirements. The former superintendent, his administrative assistant, and a stenographer received payments in excess of $18,900, for benefits upon retirement that were not provided for under District policies or in applicable employment contracts.

There were internal control weaknesses in the District cash disbursement operations. The treasurer’s electronic signature is not properly controlled and checks prepared by BOCES are not properly reviewed before distribution.

Additionally, there were a number of internal control weaknesses within the District’s claims auditor process. The claims auditor did not audit any claims relating to the District’s building construction capital project (over $25 million).

12


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding financial oversight, payroll and cash disbursements.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Harpursville


Central School District

Internal Controls Over Selected Financial Activities

2007M-45

6th Judicial District

$0 adjustment

The school board contracted with and paid a vendor $3,468; however, a board member is the company’s vice president and bookkeeper, and her husband is the company's president.

The assignment of job duties in the District’s business office does not provide for an adequate segregation of duties over financial transactions. Both the District treasurer and the claims auditor perform duties that should be segregated.

The claims auditor was also not thoroughly auditing all claims presented for payment. Out of the 133 claims tested, it was found that 58 claims did not have appropriate supporting documentation for various reasons. Nine ($42,245) out of 39 claims tested lacked proper documentation.

Lastly, there were no policies in place to safeguard computer data.

9


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding interest in contracts; treasury and accounting duties; claims processing; and information systems.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Harrisville


Central School District

Internal Controls Over Cash Disbursements

2007M-135

5th Judicial District

$0 adjustment

Checks are not reviewed by the treasurer or other District personnel. The checks are generated with treasurer's signature and are not examined by anyone at the District. Consequently, District officials do not have adequate assurance that signed checks are being produced for only legitimate District purposes.

Checks are printed using a software package that is separate from the financial accounting software. The computer software that BOCES personnel uses, allows for the production of exact duplicates of signed checks. This is a serious weakness because it provides an opportunity for unauthorized payments to be made.

District personnel does not routinely inspect the check images, and these images only show the front side of the check. Consequently, the District cannot access images of both sides of the check and cannot determine the identity of the final endorser.

Additionally, there are no formal written computer use policies in place and employees are not required to create passwords that contain special characteristics. BOCES also do not generate reports that can detail exceptions to routine transactions.

5


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding cash disbursements and computer security.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Hermon-DeKalb


Central School District

Internal Controls Over Cash Receipts and Disbursements

2007M-105

4th Judicial District

$0 adjustment

The school board did not meet its responsibility to audit claims itself or to appoint a claims auditor. There was also not adequate internal control over the District’s cash because the business manager has control over all cash, accounting, and treasury functions with little oversight. The business manager/treasurer is able to write, sign, and authorize external wire transfers without review.

The cafeteria manager has custody of the daily cash and maintains all cafeteria sales records. No independent reviews of her work exist, and the spreadsheet she is supposed to maintain does not provide an independent and reliable accountability for sales.

2


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding cash receipts and disbursements.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Hopevale Union Free School District

Improper Payments and Lack of Fiscal Oversight

2006M-222

8th Judicial District

$0 adjustment

The former business manager misappropropriated $108,650 by issuing himself an unauthorized vendor check and additional payroll checks, improperly increasing his salary, and using District funds to pay for his personal tax liability.

The school board did not adequately segregate key business process functions, and instead, delegated responsibility to one individual.

The board improperly paid certain salaries and other benefits, totaling $55,200.

Finally, the District had inadequate controls over the processing and payment of claims. The board appointed a teacher’s aide/secretary in the District office as the claims auditor. She initiated some of the claims which were payable to herself.

22


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding improper payments and control deficiencies; payroll processing, information technology; and claims processing.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Hopevale Union Free School District

Independent Audit Services

2007M-81

8th Judicial District

$0 adjustment

It was found that District officials contracted with a CPA firm they had used for the past twenty years, without seeking competitive offers from other firms.

Upon reviewing their 2004-2005 audit work, it was found that the firm did not conduct an audit in accordance with generally accepted government auditing standards as required by the New York State Education Department.

The CPA firm’s annual audit of the District did not meet several professional standards.  For example, there was no compliance with auditing standard requirements relating to the consideration of fraud.

Certain tests were also not done to test for management override of controls. The CPA firm also failed to obtain an adequate understanding of the internal controls relating to the District's use of information technology.

10


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding procurement and effectiveness of audit services.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Ilion


Central School District

Internal Controls Over Selected Financial Operations

2007M-90

5th Judicial District

$0 adjustment

The District claims auditor does not audit claims or report directly to the school board. All claims were paid by the District treasurer without the benefit of a proper claims audit. The claims auditor is also the secretary to the superintendent, which is a position that is not compatible with her duties as claims auditor.

The treasurer and payroll clerk are each able to control most or all phases of transactions with little to no oversight. There was also no written authorization for fringe benefits provided to five employees.

The District also has no formal system in place to explain conflict of interest provisions to officers and employees.

11


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding cash disbursements, payroll, and conflicts of interest.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Jamesville-DeWitt


Central School District

Internal Controls Over Cash Disbursements

2007M-156

5th Judicial District

$0 adjustment

The treasury duties are not properly segregated and the duties of the treasurer included making and recording inter-account bank transfers and wire transfer payments; preparing and posting journal entries; and reconciling bank accounts.

There were also deficiencies in the treasurer’s oversight of the check signing function. Checks are computer-generated with the treasurer’s signature imprinted on them. The business executive, accounts payable clerk, payroll clerk, and purchasing clerk all have the ability to print checks with the treasurer’s signature. The treasurer also does not routinely review cancelled checks.

3


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding cash disbursements.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Jefferson


Central School District

Payments to the Former Superintendent and Controls Over Selected Financial Activities

2007M-64

6th Judicial District

$0 adjustment

The former superintendent was improperly paid $88,502 for unathorized salary, vacation, and separation pay. The propriety of additional reimbursement, vacation and separation payments, totaling $18,687 are also being called into question because employment contracts were not properly authorized, signed, and secured. Because the former superintendent served as the District's purchasing agent, he was able to request and approve payments he was not entitled to.

Additionally, the claims auditor did not audit any District claims. Six claim packages, totaling $6,167, and four claim packages, totaling $1,503 could not be located during the report period. The purchasing agent also did not sign 16 purchase orders, totaling $8,446.

Internal controls regarding cash receipts and disbursements were not appropriately designed. The treasurer made errors when preparing deposits, and did not deposit money in a timely manner. Bank statements were also not provided to BOCES staff, and as a result, bank statements could not be reconciled in a timely manner. The treasurer's signature was also not properly monitored.

17


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding payroll, claims processing, purchasing, cash receipts, and disbursements.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Jericho


Union Free School District

Internal Controls

2007M-114

10th Judicial District

$0 adjustment

There were several weaknesses in the District’s control over cash receipts and disbursements. The teasurer’s duties are not properly segregated, as the treasurer handles the key financial functions of authorization of transactions, custody of assets, and record keeping. The treasurer also did not maintain adequate control over her signature disk to prevent unauthorized use. The school board did not establish a dollar limitation on the amount of budgetary transfers.

In addition, the superintendent negotiated a 39-month lease purchase agreement for an automobile for his personal use, at a total cost to the District of $26,626, which was not approved by the board.

Policies over the use of credit cards and meals at meetings, were not always followed. Out of the 89 claims for meals that were tested, $10,656 lacked explanation. Also, 241 credit card charges were examined, and 67 charges ($10,320) were not supported, itemized or were not in compliance with District policies.

Fringe benefits were approved for seven employees through a letter by the superintendent, when they should have been directly approved by the board. It was found that these benefits were not consistent between years and employees, but there were no explanations provided to account for the differences.

Lastly, there is no proper inventory record or system of controls over vehicle fuel. Between January 1, 2006 and June 30, 2006, 455 gallons were unaccounted for.

12


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding financial operations, fringe benefits and meal expenses, claims processing and vehicle fuel inventory.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Keene


Central School District

Internal Controls Over Financial Operations

2007M-69

4th Judicial District

$0 adjustment

The District did not adequately segregate duties over accounting and payroll processes. The District’s accounting software could not generate the reports needed to properly monitor financial activity and the software is not set up to require a password for access.

Of the 25 claims that were tested, 17 did not contain evidence of being audited, 6 claims were audited after the bill had been paid, and the voucher packages for 2 claims were missing. District officials also overpaid Champlain Valley Educational Services by $8,488 because special education services bills were not properly analyzed.

Lastly, the treasurer paid 12 employees $8,100 more than their approved salaries and the District’s capital asset records were not up-to-date.

11


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding segregation of duties, claims audit process, payroll, e-mail security, and capital assets.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Leake and Watts Services, Inc.

Compliance with the Reimbursable Cost Manual

2006-S-123

9th Judicial District

$0 adjustment

There were several errors (totaling $646,066) in the Consolidated Fiscal Report data submitted for the fiscal year. These errors primarily regarded bond refinancing costs and the salaries of officials. Because of such errors, there were disallowances totaling $615,176 for the Biondi Program, $29,153 for the Ames Program, and $1,737 for the Brownell Program.

4


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding bond financing and payroll.

Officials agreed with some of the report’s recommendations; however, they disagreed on the comment relating to the refinancing of the agency’s Dormitory Authority bonds and the comment in relation to personal service costs.

The Rate Setting Unit will use the results of the audit to establish audited tuition rates.

Mamaroneck Union Free School District

Internal Controls Over Financial Operations

2007M-78

9th Judicial District

$0 adjustment

The school board did not exercise proper oversight over contractual payments for remote network administration services, totaling $685,000. The former superintendent of Operations was among the signatories for eight of the contracts.

None of the contracts were entered into with board approval. There was also no indication that proposals were solicited or that quotes were obtained for these services.

Controls over the processing of a $1,258 reimbursement for a trip to Greece may have been manipulated. There was no adequate supporting documentation.

5


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding professional services contracts and travel expenses.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible

Mayfield


Central School District

Internal Controls Over Computer Data

2007M-101

4th Judicial District

$0 adjustment

The District’s IT policy only addresses certain key issues to a limited degree.  For example, the policy does not address periodic changing of passwords, backups, or disaster recovery.

The District also did not adequately protect itself from unauthorized computer access. Passwords provided to network users were unsophisticated and the minimum standard was only four characters. Fifteen user names had administrator rights to the network, when rights should only be granted to those whose regular job duties require it.

Further discrepancies included the District’s failure to generate an audit log, create a data backup plan in case information is lost for any reason, as well as a formal disaster plan.

4


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding internal controls over computer data.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Middletown


Enlarged City School District

Internal Controls Over Procurement and Claims Processing

2007M-147

9th Judicial District

$0 adjustment

The District’s procurement policy did not require the District to obtain written agreements from providers of professional services. The District paid $502,362 for legal counsel without a benefit of a written agreement. The District also paid $16,100 to a certified public accounting firm in excess of the written agreement, and $15,839 to a professional development consultant in excess of the agreement and without seeking board approval.

Additionally, the District paid $9,518 to a financial services provider, whose claim vouchers included lump-sum payments that did not state who performed the service or the rate charged.

The District purchased furniture, totaling $29,098 from a state contract vendor, but the particular furniture purchased was not covered under state contract. Various computers were also purchased ($20,434), but were not put out to bid.

4


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding procurement and claims processing.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Mohawk


Central School District

Internal Controls Over Selected Financial Operations

2007M-190

5th Judicial District

$0 adjustment

Certain duties were not properly segregated in the District’s business office. An account clerk in the business office performs all aspects of the cash disbursement process. In addition, the business official, who is the District’s appointed purchasing agent, delegates the procurement responsibilities to the same account clerk who uses the business official’s signature stamp to authorize purchases.

Additionally, the District’s payroll clerk could perform all aspects of the payroll process without any other employee’s involvement or oversight.

The District’s business official, who is significantly involved in financial transactions, has full administrative privileges to the computerized financial system. Also, the payroll clerk has access to all user privileges within the accounts payable financial application. The District also processes its payroll on older financial software, which does not have the capabilities to restrict user privileges.

4


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding internal controls.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Morrisville-Eaton


Central School District

Internal Controls Over Financial Operations

2007M-98

6th Judicial District

$0 adjustment

Virtually all control over fiscal activities were handled by the business administrator, who was not establishing appropriate checks and balances on her work. The business administrator is able to initiate and approve each claim payment transaction without proper oversight.

The majority of the District’s financial transactions are processed by a Madison-Oneida BOCES employee, such as entering financial data, preparing manual checks and journal entries. When performed by one person, these duties are incompatible.

The business administrator/treasurer’s oversight of this process was deficient. The account clerk signs District accounts payable checks utilizing the treasurer’s signature stamp.

The claims auditor does not report directly to the school board, and as a result the board is not alerted to concerns identified during the claims audit.

Finally, 6 out of 14 claims reviewed were subject to competitive bidding and/or procurement policy requirements for quotes; however, there was no documentation of competitive bids or quotes.

8


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding financial operations, claims processing and procurement.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Nyack Union Free School District

Internal Controls Over Purchasing

2007M-107

9th Judicial District

$0 adjustment

It was found that the District made payments totaling approximately $1.2 million during the 2005-2006 fiscal year for security and cleaning services without evidence that the District had awarded the contracts in compliance with competitive bidding requirements.

3


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding purchasing practices, particularly competitive bidding.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Onondaga


Central School District

Claims Audit and the Treasurer's Operations

2007M-124

5th Judicial District

$0 adjustment

It was found that District personnel did not obtain quotes prior to making purchases totaling $45,440. Some of these purchases included, repair for the high school boiler system, replacement of classroom furniture, clearing land, and repairing the middle school’s sound system.

The claims auditor also did not examine claims for compliance with the District’s procurement policy. The business administrator did not instruct the maintenance supervisor to document or maintain quotes, nor did he ensure that the maintenance supervisor was aware of District policies requiring written or verbal quotes, or verify whether the quotes were actually obtained when required. The maintenance supervisor said he was unaware of the District policies requiring quotes. 

The claims auditor is the superintendent's secretary and the District’s tax collector, therefore compromising her ability to act in a totally independent manner.

Additionally, deficiencies were found in the teasurer’s oversight of the check signing function. Also, the teasurer does not compare checks to an approved warrant or certified payroll register before the checks are issued. The teasurer also does not maintain accountability for all checks issued.

5


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding audit of claims and treasurer’s operations.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Poughkeepsie


City School District

Circumvention of Internal Controls and Fiscal Oversight

2007M-113

9th Judicial District

$0 adjustment

The school board had not established internal controls over payroll and the procurement of professional services. The District also had a weak control environment and approved transactions without requiring appropriate documentation.

The selection and hiring process for four administrative positions created by the former superintendent were also in question. The board appointed individuals to these positions, and paid them a total of $730,000, relying solely on the former superintendent’s recommendation.

As a result of the former superintendent’s ability to override controls, over $539,000 in questionable expenditures were made by the District. Such questionable expenditures include extra compensation payments resulting in $46,742 paid to 10 administrators; $16,000 for longevity to an administrator who was not entitled to it; and two employees, including the former superintendent, that received over $15,000 in payments for personal business days when their contracts did not provide this benefit.

The board approved a payment to a consultant for additional services, totaling $224,867. A District employee conducted an analysis of the additional charges, and noted substantial discrepancies in the claim. There were also additional questionable payments, $110,094 to 2 other consultants, and $7,000 for a human resource study, which was never provided to the District, as required by the agreement.

15


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding control environment, board appointments, compensation, and professional services.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Ramapo


Central School District

Internal Controls Over Purchasing

2007M-121

9th Judicial District

$0 adjustment

Two of 19 purchases ($15,171 for ceiling tiles and $12,192 for electrical supplies) exceeded the competitive bidding threshold and were not competitively bid.

Occasionally, instead of obtaining pre-approval for purchases, District staff sometimes placed orders for goods and services.

1


recommendation

The report’s recommendation focused primarily on strengthening policies and procedures regarding purchasing.

The District officials generally agreed with the recommendation, and have indicated that they plan to initiate corrective action as soon as possible.

Ravena-Coeymans-Selkirk


Central School District

Internal Controls Over Financial Activities

2007M-71

3rd Judicial District

$0 adjustment

Controls over payroll and personal services are not adequate. Of the 66 payroll-related payments tested, 23 payments ($38,184) were not supported by contract provisions or school board resolutions.

The District does not always adhere to statutory competitive bidding requirements. District policy only allows for one credit card to be issued in the District’s name; however, 2 bank-issued credit cards and 12 vendor charge cards were found. There was also no prior approval for the 19 credit card transactions that were tested. Fourteen charges, totaling $2,756, were for questionable purposes.

The Assistant Superintendent for Instruction and the business administrator also sometimes approved warrants instead of the claims auditor. The purchase order system is being circumvented, which is resulting in unauthorized purchases.

Bank reconciliations were also not being completed in a timely manner, and the treasurer had not complied with the District requirement to provide the board with periodic financial reports.

15


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding payroll and personal services, purchasing, claims processing, and cash receipts and disbursements.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Red


Hook Central School District

Internal Controls Over Selected Financial Activities

2007M-66

9th Judicial District

$0 adjustment

The school board had not established adequate internal controls over the District’s cash receipts and disbursements. The treasurer had not obtained the written authorization of the business administrator before making six inter-fund transfers, totaling $2,767,936. The treasurer also did not issue receipts for 40 health insurance reimbursement payments totaling $9,472 to the personnel office staff member who remitted the moneys.

The board also had not established adequate internal controls over purchasing and claims processing, and as a result, District officials over-expended 20 accounts by $48,269.   

District personnel failed to obtain verbal quotes for 3 purchases, totaling $4,729, of the 10 reviewed. Personnel also over-expended two-blanket purchase orders by $1,910.

Adequate controls to protect fuel inventory were also not yet established, and it was found that the board president had a financial interest with the District that he had not disclosed.

The board appointed the accounts payable clerk as the claims auditor, which is in violation of Education Law.

13


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding inter-fund transfers and cash receipts, purchasing and claims processing, safeguarding assets, disclosure of interest, and board oversight responsibility.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Saranac


Central School District

Internal Controls Over Online Banking Transactions and Extra-Classroom Activity Fund

2007M-93

4th Judicial District

$0 adjustment

The school board had not established written policies and procedures for online banking transactions. There was not an established limit for the amounts that can be transferred to non-District accounts. Although the District maintains a record of online transfers it makes, it does not require a monthly report of all online banking transactions.

The central treasurer did not provide the board with any quarterly reports on extraclassroom activity, as required by the Regulations. The central treasurer transferred funds totaling $29,319 from eight inactive elementary accounts to the Saranac and Morrisonville Elementary School Family Student Organizations Account, rather than to the Student Council Fund account, as District policy requires.

For 15 of the 43 deposits reviewed ($5,759), it took 10 days or more from when the date funds were received until they were deposited. One of the 15 deposits (totaling $625) was not deposited for approximately three months.

5


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding online banking transactions and the extra-classroom activity fund.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Schalmont


Central School District

Internal Controls Over Cash Disbursements

2007M-106

3rd Judicial District

$0 adjustment

It was found that the claims auditor did not properly review 58 out of 89 claims tested. In some cases, purchase orders lacked a signature by the purchasing agent, or didn’t show department head approval.

Fifteen claims totaling almost $490,000 were not audited until after payment had been made.

Lastly, a formal disaster recovery plan was not implemented for IT systems and back-up tapes were not stored in a secure environment.

6


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding cash disbursements and computerized data.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Sisulu-Walker


Charter School Of Harlem

Financial Management Practices

2006-S-52

1st Judicial District

$0 adjustment

School officials did not always follow established policies and procedures while making disbursements. For example, an unauthorized employee had signed the business manager’s signature on certain checks, valued at $1,447 while the business manager was on leave. Although these expenditures were for school items, checks should be signed only by authorized personnel.

Sisulu officials did not maintain a complete inventory listing, nor conduct an annual physical inventory.  Eight items, with a total value of $10,628 were unaccounted for.

One student continued to attend Sisulu free of charge, even though her parents now lived in another state. The school had requested $17,670 in State aid for this student. Officials also failed to collect $3,415 in school lunch charges because they did not bill students’ parents in a timely manner.

Lastly, security personnel at the school had not been fingerprinted, nor subjected to background checks.

6


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding financial oversight, disbursements and procurement, equipment and inventories, revenues, and personnel services.

Sisulu officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

South


Glens Falls Central School District

Internal Controls Over Selected Financial Operations

2007M-88

4th Judicial District

$0 adjustment

The District had not established adequate segregation of duties over the cash receipts, disbursements, and payroll functions. There were no written policies governing cash receipts and disbursements.

The district treasurer has the authority to prepare and print the District checks, create journal entries, and access banking information. Key duties over payroll, such as entering new employees, updating salary information, and processing payroll, had not been properly segregated.

District officials failed to ensure that District personnel documented verbal and/or written quotes in the claims packets, as required by the District’s procurement policy.

Lastly, there was no effective system in place to ensure all claims were properly authorized, documented, and itemized.

9


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding computer operations, segregation of duties, purchasing, and claims processing.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Stamford


Central School District

Internal Controls Over Selected Financial Activities

2007M-127

6th Judicial District

$0 adjustment

It was found that the treasurer paid unauthorized salaries and stipends to various employees, totaling $16,426. There was also a lack of segregation of duties in the overall payroll process.

The school board did not appoint a claims auditor in accordance with regulations. The asistant superintendent was appointed; however, regulations prohibited this because the individual was under the direct supervision of the superintendent. Once this was brought to the attention of the board, the board rescinded the appointment. Additionally, there was no evidence that indicated that the claims auditor audited and approved all claims. 115 claims were tested, and 14 of the claims (totaling $56,000) were not initialed to indicate approval.

The board also had not established policies and procedures to effectively safeguard computerized data and assets. There was also no formal disaster recovery plan in place.

9


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding payroll, claims processing, and computerized data and assets.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Trumansburg


Central School District

Claims Processing, Cash Disbursements and Payroll

2007M-75

6th Judicial District

$0 adjustment

The school board-appointed claims auditor performed incompatible duties because she is directly involved in purchasing functions of the middle school, and is not eligible to serve as claims auditor according to Education Law.

Two business office employees are able to imprint the treasurer’s signature on District checks using an electronic copy of the treasurer’s signature. The signature was not overseen, and one of the signature disks was improperly stored in an unlocked drawer.

In a management letter, the District’s independent auditor reported that a number of bank accounts bearing the District’s name contained non-District funds.

Finally, the payroll coordinator performed the authorization, record keeping, and payment functions in payroll, which demonstrated a lack in the segregation of duties.

5


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding claims processing, cash disbursements, and payroll.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

VADIR

Follow Up to Report 2005-S-38

2007-F-13

$0 adjustment

The initial audit identified a significant risk that the level of violence at high schools across the State was understated, and therefore, SED’s annual reports on school violence did not convey the full magnitude of this issue to the Governor, Legislature, and the Board of Regents.

SED has made significant progress in addressing the matters that were identified in the initial report. Of the 14 recommendations, 13 of them were implemented and 1 has been partially implemented.

14


recommendations

13 implemented

1 partially implemented

The recommendation that has only been partially implemented, is the recommendation to develop procedures to enforce compliance with the requirement of superintendent’s certification of district’s violent and disruptive incident reports to SED. SED established a comprehensive program, however, the program and its attendant processes have not been formalized in official policy or regulation.

Waterford-Halfmoon Union Free School District

Internal Controls Over Claims Processing

2007M-96

4th Judicial District

$0 adjustment

The District did not have an effective claims audit function in place to ensure that claims were properly handled. There were also no policies or procedures in place to control the use of credit cards.

Twenty-one credit card invoices were not properly supported by receipts; 11 claims were submitted before submitting purchases orders; 6 claims contained errors such as using copies of documentation instead of the originals; 4 claims did not have a signature; and 3 claims lacked sufficient documentation.

4


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding claims processing.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

Worcester


Central School District

Internal Controls Over Selected Financial Activities

2007M-37

6th Judicial District

$0 adjustment

The purchasing agent did not approve all purchases and ensure that bidding and quotation requirements were adhered to. The school board also failed to oversee the work of the purchasing agent. There were 28 computers that officials did not obtain competitive bids for, totaling $19,998. Officials did not seek quotes for 3 of 7 other purchases, totaling $8,515, and did not generate purchase orders for 44 purchases, totaling $47,774.

Six claims totaling $43,684 were not audited, and the supporting documentation for 9 claims, totaling $1,764 was incomplete.

There were 8.75 days of leave time used, but not posted to employee records, and 46 percent of conference days used were not documented or approved.

Lastly, the treasurer did not control the use of his signature disk and was not notified when it was being used on checks.

10


recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding purchasing, claims processing, leave time, and the teacher’s signature disk.

The District officials generally agreed with the recommendations, and have indicated that they plan to initiate corrective action as soon as possible.

New York City Department of Education

Audit

Major Finding(s)

Recommendation/Response

FY05 & FY06 Internal Audits of Schools of the Department of Education of the City of New York

07-08

1st, 2nd, 11th, 12th Judicial Districts

$0 adjustment

NYCDOE’s Office of Auditor General in conjunction with Ernst and Young, LLP, prepared the report. The plan was developed to focus on financially significant areas. Eleven schools were reviewed under the area of Paid Class Coverage and Teacher Programming Activities; 4 RIC’s under Per Session Activities; 133 schools under Computer and Audio Visual Equipment Inventory; and 40 schools under Fundraising and General School Fund Activities.

Several teachers were assigned fewer than the required minimum of teaching periods per their contract. Teachers’ absences or lateness were not properly recorded in EIS. It was also found that certain documents, such as timecards and timesheets were not maintained. Overpayments were made of approximately $2,244 to RIC employees due to incorrect dates and hours entered into the payroll system.

A few of the schools reviewed did not maintain completed inventory listings for computer and/or audio/visual equipment, and certain equipment could not be located in the inventory listing. In some schools, computer equipment was found in its original packaging, and was not being used.

In terms of fundraising and general school fund activities, there were non-relevant expenditures made, totaling $452,471. A log of senior dues collected was not maintained and certain fundraising monies could not be reconciled to the cash deposited. Fundraising activities were not always documented and/or records maintained. Bank reconciliations were not always prepared and cash receipts were not always deposited in a timely manner. There was also no evidence of receipt of goods for purchases amounting to $621,831. Teachers were also provided payroll advances ($1,950) from the General School Fund.

A $15,000 donation was received by one of the schools but was not reported. One school also paid vendors approximately $18,293 in cash prior to the funds being deposited.

53 recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding payroll, General School Fund Activities, Computer Equipment Inventory, Paid Class Coverage, and Teacher Programming Activities.

The report did not include the response of District officials.

The City of New York Office of the Comptroller

Audit

Major Finding(s)

Recommendation/Response

Audit Report on the Department of Education’s Reporting of Violent, Disruptive, and Other Incidents at New York Public High Schools

MG06-140A

1st, 2nd, 11th, 12th Judicial Districts

The audit found the Department of Education (DOE) does not have effective controls to ensure that incidents at its high schools are consistently entered in On-line Occurrence Reporting System (OORS) so that DOE can then report them in accordance with the requirements of SED. For the 10 sampled schools, 414 (21%) of the 1,996 sampled incidents that were identified were not entered in OORS. Of the 1,996 incidents, 1,247 (62%) were serious, and 174 (14%) of these were not entered in OORS.

There was also a wide variation from school to school in the reporting of incidents and in the consistent reporting of similar incidents. A significant reason for the variation is the large amount of discretion that administrators have in categorizing incidents at their schools. The effect of this discretion is significant because OORS is the source of the data reported in VADIR for New York City high schools. Without more effective central controls, DOE cannot ensure that incidents are, in fact, entered in OORS by its schools and that those incidents determined to be violent and disruptive are reported consistently among schools, so that DOE can report them in accordance with SED requirements.

3 recommendations

The report’s recommendations focused primarily on strengthening policies and procedures regarding incident reporting in OORS.

The District officials generally agreed with the recommendations, however, they disagreed with the tone of the report and stated that the language and data used were imprecise and misleading.