|
Office
of Audit Services |
|
Audit |
Major
Finding(s) |
Recommendations/Response |
|
Our World Neighbor- hood Charter School
Report
CH-1005-1
11th Judicial
District
|
$0
adjustment
The audit found the Board of Trustees
(Trustees) meeting minutes did not document adequate monitoring of the
School’s financial condition or discussions of audit findings and staff
requests to attend training/
conferences.
The School’s fiscal year and the actual
number of school days provided were inconsistent among the School’s
Charter, by-laws, and the School calendar. School bank reconciliations
were not signed and dated by the preparer or the
reviewer.
The audit also found the Parent Teacher
Organization (PTO) is not independent of the School in financial matters;
the School’s Chief Administrative Officer is a signer on the PTO checking
account and the PTO is using the School’s tax-exempt identification
number. The School does not have specific procedures that define the types
of expenditures that are appropriate and the documentation required for
reimbursement from the petty cash
fund.
In addition, personnel files do not
contain all necessary information such as documentation of reference
checks and evidence of required
certifications.
Finally, the School did not establish
adequate controls over the $2.8 million in assets that it owns. Specifically, about $200,000 of
furniture and equipment lacked School identification tags, the fixed asset
inventory did not contain sufficient identifying information, and a
physical inventory was not taken within the last
year. |
29
recommendations
The report recommends the Board
officially meet to approve the budget and any budgetary transfers; monitor
the budget and establish a process to monitor budget status reports;
authorize bank accounts for School use; approve corrective action plans to
address audit findings; and establish a policy to review staff requests to
attend training conferences.
In addition, the report recommends
amending the School by-laws to reflect the dates in the Charter for the
fiscal year, strengthening School bank reconciliation procedures,
separating financial operations between the PTO and the School, and
modifying the petty cash procedures to provide guidance on appropriate
expenditures and required documentation for reimburse-
ment.
Furthermore, the report recommends that
personnel file documentation be strength- ened to include support for
references and appropriate certifications, and that the School establishes
policies and procedures for fixed assets and equipment
inventory.
School officials agree with all but one
of the recom- mendations; they have taken action to implement the
recommendations that they agree with. In response to the recommendation
they disagree with, School officials believe they have an adequate process
in place to approve bank reconciliations. |
|
The Milestone School for Child
Develop-ment
Report
CA-0602-12
An audit conducted by the Office of the
Auditor General, Department of Educa- tion of The City of New York and
Approved by the State Education Department Pursuant to Education Law
Section 4410
2nd Judicial
District |
$67,696
adjustment
The audit determined that the School
did not comply with some State Education Department (SED) regula- tions
and guidelines that govern fiscal operations of schools for children with
disabilities.
The School both under and
over-reported student enroll- ment data; misreported personal service and
fringe benefit costs; and did not maintain adequate docu- mentation for
other-than-personal-service and admin- istration expenses, some of which
were not reim- bursable.
Parking violation fines, late payment
fees to credit card companies, and corporation franchise taxes paid above
the minimum allowed amount were disallowed by the auditors as not
reimbursable. |
3
recommendations
The report recommends that the School
calculate its enrollment data in accordance with SED regulations, report
accurate personal service and fringe benefit data to the appropriate cost
center, comply with SED guidelines for all reimbursable expenditures, and
maintain the required documentation for all expen-
ditures.
School officials generally agree with
recommendations.
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) |
Recommendations/Response |
|
Village Child Development Center Report
2004-S-81
12th Judicial District
|
$600,101
adjustment
The audit found material errors on
Village
Child Development Center’s (VCDC’s) Consolidated
Fiscal Reports (CFR) for fiscal years 2003 and 2004, which totaled
$600,101. The errors on the
CFRs resulted from the misclassifications of personal service costs and
the inclusion of ineligible other-than-personal-service (OTPS) costs. For example, VCDC improperly
charged staff salaries to the wrong program or care class- ification;
claimed non-reimbursable consulting, accounting, legal, and entertainment
costs; and lacked documentation to support other various
expenses.
The report also found that VCDC
combined costs on the CFR for two of its programs and neglected to use the
CFR Manual’s prescribed methodology to calculate full-time equivalent
(FTE) enrollments. |
3 recommendations to
SED
6 recommendations to
VCDC
The report recommends that SED review
the adjustments identified in the audit report and take appropriate action
to recover any overpayments; require VCDC to report program information on
the CFR separately; and formally advise VCDC to comply with the Manual’s
methodology for calculating FTE
enrollment.
The report also recommends that VCDC
ensure personal service costs reported on the CFR are accurately charged
to the appropriate program, all costs are reported correctly as either
direct care or non-direct care, and all OTPS costs reported on the CFR are
eligible and adequately documented. In addition, VCDC should report
program information separately on the CFR and comply with the Manual’s
methodology for calculating FTE
enrollment.
SED officials agree with all of the
recommendations. VCDC did not respond specifically to the recommendations,
but indicated disagreement with findings regarding retainer payment to its
accountants and payments to other consultants for team meetings.
The Rate Setting Unit will use the
results of the audit to establish audited tuition
rates.
|
|
Written Support of Internal Controls
Over the State Aid Management
System
Report
2006-S-32 |
$0
adjustment
The audit found the Department’s
written support documenting internal controls over the State Aid Unit and
the State Aid Management System is adequate. These controls help provide
assurance that the financial information for reporting support of public
schools to the Office of the State Comptroller for use in the State’s
Comprehensive Annual Financial Report is reliable.
|
0
recommendations |
|
Marathon Central School
District - Internal
Controls Over the Audit of Claims
Report
2006M-27
6th Judicial
District |
$0
adjustment
The audit found that the Board of
Education (Board) has not established policies or procedures for the audit
of claims, nor has the Board deliberately and thoroughly audited
them. In addition, Board
members stated that they do not audit every claim because they trust the
work of District staff to ensure the accuracy and appropriateness of
claims.
An audit test of 80 claims revealed
that eight lacked evidence that goods or services were received and two
included mileage reimbursements that were paid at rates other than the
established rate set by the Board. |
1
recommendation
The report recommends that the Board
enhance the District’s internal controls by establishing policies and
procedures to ensure the deliberate and thorough audit of all individual
claims.
District officials agree with the
recommendation; they stated that they would appoint a part-time internal
claims auditor and prepare written internal control policies and
procedures. |
|
Wyandanch Union Free School District – Independent Audit
Services
Report
2006M-3
10th Judicial
District |
$0
adjustment
The audit found the District did not
effectively procure its annual audit services by obtaining requests for
proposals. The District contracted with the firm they had used in the past
without seeking competitive offers from other
firms.
The audit also found that the CPA’s
annual audit of the District did not meet several critical professional
stan- dards. Specifically, the CPA’s were not in compliance with standards
for consideration of fraud, risk of District management overriding
controls, under- standing internal controls, documentation of work, and
disclosure of non-compliance with law and regulations.
|
6
recommendations
The report contains four
recommendations regarding the proper procurement of audit services at
least every five years. The report recommends that the District and Board
ensure they understand the scope and limitation of the annual independent
audit. Finally, the report recommends the district establish an audit
committee.
District officials generally agreed
with the recom- mendations and indicated they planned to take corrective
action.
|
|
Wyandanch Union Free School District - Internal
Controls
Report
2006M-7
10th Judicial
District |
$0
adjustment
The audit found District officials did
not adopt policies, maintain perpetual inventory records, conduct periodic
inventories, nor establish other safeguards to ensure that capital assets
were protected from loss. Auditors found that the District has possession
of less than 50 percent of computer equipment obtained through a SED
surplus computer program; they were unable to locate 74 of the 181 donated
computer-processing units, 24 donated laptops, and 81 of the 120 donated
monitors.
The report also found the control
environment over employee personnel files and payroll processing is
weak. Personnel files lacked
proof of fingerprint clearances, background checks, and SED clearances to
work with children. In
addition, District personnel made recordkeeping errors that led to the
overpayment of 17 employees and the underpayment of 14 employees. Furthermore, the auditors could
not determine how a 1.5 percent employee bonus was
calculated.
The District did not comply with its
own procurement policy and General Municipal Law competitive bidding
requirements. Ten contracts
totaling more that $600,000 were awarded without using a request for
proposal process, two contracts totaling $130,000 were for consultant
services that the District did not need, and the contractual service
provision for one contract totaling $68,000 was never fully
realized.
The District had one person performing
the duties of accountant and treasurer. The treasurer/accountant prepared
deposits, posted entries in the accounting records, printed and signed
checks, and performed bank
reconciliations. |
21
recommendations
The report recommends that the Board
establish compre- hensive capital assets policies, take immediate action
to recover the missing computers, update its payroll policies and
procedures, assign payroll duties appropriately, ensure vouchers are
audited prior to payment, provide procurement guidance, and review
payments on contracts where services were either unneeded or not provided
(to determine legal action/repayment).
The report also recommends that the
District ensure that its capital assets inventory is complete and
up-to-date, contracts are clear and concise, contractual com- pliance is
monitored, and employee duties are segregated. The report also recommends the
District require that personnel files contain all required forms, create a
system to accurately track employee time records, and develop and document
criteria for the 1.5 percent employee
bonus.
District officials agreed with the
recommendations and indi- cated they plan to initiate corrective
action. |
|
Dundee Central School
District - Food
Inventories
Report
2006M-45
7th Judicial
District |
$0 adjustment
The audit found that District officials
did not establish the controls and maintain the records necessary to
safeguard food inventories.
Auditors found that the District’s cafeteria manager performed
virtually all of the administrative duties asso- ciated with the cafeteria
with little or no oversight, and did not keep a perpetual inventory
system. In addition,
custodial staff had access to food inventories without managerial super-
vision. Auditors also noted
discrepancies (shortages and overages) with the District’s physical inven-
tories. |
4
recommendations
The report recommends the Board and
District manage- ment establish policies and procedures to address the
acquisition, storage, and use of food inventories. The report also
recommends that the cafeteria manager establish and maintain a perpetual
inventory system; District officials improve physical security over stored
food items; and the District’s internal auditor perform periodic reviews
to identify any unusual food inventory items or
trends.
District officials generally agreed
with the recom- mendations and indicated they plan to initiate corrective
action. |
|
East Irondequoit Central School
District - Internal
Controls Over Payroll and Personal Services
Report
2006M-74
7th Judicial
District |
$0
adjustmemt
The audit found that the District’s
internal controls over payroll and personal services are appropriately
designed and operating effectively.
|
0
recommendations
|
|
Westmoreland Central School
District - Internal
Controls Over Procurement and Capital Assets
Report
2006M-30
5th Judicial
District |
$0
adjustment
The audit found that District personnel
are not complying with the Board procurement policy. Auditors examined 23 purchases
totaling $200,000. Support for these purchases in the form of oral or
written quotes, or requests for proposals from vendors were
nonexistent. Additionally,
auditors found no written evidence supporting a sole-source determination
for a $31,150 public works contract.
The audit also found that District
officials did not ensure capital assets were protected from loss by
assigning responsibility for record maintenance to someone independent of
purchasing. The District did
not maintain adequate perpetual inventory records, conduct periodic
inventories, tag District assets, and approve capital asset transfers to
District employees. |
6
recommendations
The report recommends the Board ensure
District em- ployees follow the District’s procurement policy, assign
responsibility for updating capital asset records to someone independent
of the purchasing process, and approve and note in minutes of its meetings
any transfers of capital assets to District
employees.
The report also recommends that
District officials ensure that District personnel maintain adequate
capital asset/ computer equipment records, perform inventory reviews, and
identify all District property via decals, tagging, or serial
numbers.
District officials generally agreed
with the recommendations and indicated they plan to initiate corrective
action.
|
|
Deposit Central School
District - Cash
Disbursements;
Report
2006M-61
6th Judicial
District
|
$0
adjustments
The audit found that the District’s
internal controls over non-payroll cash disbursements were appropriately
designed and operating effectively and there was adequate segregation of
duties over cash disbursements.
|
0
recommendations |
|
Saranac Lake Central School
District - Internal
Controls Over Capital Assets; Report 2006M-42
4th Judicial
District |
$0
adjustment
The audit found that the Board of
Education (Board) had not adopted a written policy to protect and account
for the District’s fixed assets.
The audit also found that the
District’s fixed asset inventory records for its capital assets were not
timely or accurate. Auditors
were only able to locate 70 of 77 computers that were in the District’s
inventory records. In
addition, serial numbers for 30 of the 70 computers were not recorded in
the inventory records.
Lastly, the audit found that the
District does not have written guidelines for the disposition of computers
and computer equipment.
Auditors found that the District gave away an unknown number of
com- puters, however, because guidelines and supporting documentation did
not exist, they were unable to determine whether the computers should have
been discarded. |
5
recommendations
The report’s recommendations focus on
the establishment and implementation of fixed asset policy and disposal
guidelines for the District’s capital assets, and requiring District
personnel to assign an identification number to all applicable capital
assets.
District officials generally agreed
with the recom- endations and indicated they plan to initiate corrective
action.
|
|
Enlarged City School
District of Troy – Internal Controls Over Information
Tech-nology and Payroll
Report
2006M-62
3rd Judicial
District |
$0
adjustment
The audit found that the District has
inadequate controls over the assigned passwords used to access the
District’s computer network, and that the Board had not established
policies and procedures for the creation and administration of the users’
network passwords. Auditors
found that the District does not require users to change passwords
periodically; in fact, all users can use their initial assigned password
for the entire period of their
employment.
The audit also found that the District
assigned certain users in the business office with administrative rights
for the financial management system when they had no need for full access
to the system. These rights allow them to view, modify, edit, create
financial transactions in functions, and create management
overrides.
Finally, the audit found that the
District did not have a standard procedure for documenting the calculation
and supervisory approval of employees’ retirement pay- ments, and it
identified weaknesses in the segregation of duties over payroll and
authorized signatures on paychecks.
Auditors found that the District allowed the former Superintendent
to cash in 11 unused vacation days in the amount of $5,450 and determined
that the former Associate Superintendent was paid $5,010 for vacation days
that were in excess of her available leave balance. Auditors also found that the
District’s payroll clerk performed a majority of the payroll duties at the
District. |
13
recommendations
The report’s recommendations focus on
establishing policies and procedures over the administration of user
accounts; restricting access to the financial management system;
strengthening controls over employee leave records, benefits, and
retirement pay- outs; and instituting additional payroll
processes.
District officials generally agreed
with the recom- mendations and indicated they plan to initiate corrective
action. |
|
William Floyd Union Free School District – Controls Over District
Assets
Report
2006M-36
10th Judicial
District |
$0
adjustment
The audit found that the District’s
internal control structure was inadequate to detect and prevent
fraud. Auditors identified
several control deficiencies including employment contract approvals
subsequent to service provision, unapproved changes to the
Superintendent’s contract, failure to segregate critical duties, lack of
communication between the Treasurer and the Board of Education (Board)
regarding District financial information, failure to monitor the
effectiveness of internal controls by the Board or the
Superintendent.
The audit also found that the District
incurred $3.2 million in inappropriate or ques- tionable costs. Auditors found District
administrators were paid without Board approved contracts, the
Superintendent increased his own salary and obtained reimbursement for
personal costs, the former business manager transferred the ownership of
life insurance policies from the District to six District officials, and
various District officials obtained meals and lodging costs in excess of
federal per diem rates.
Furthermore, the audit found the
District had ineffective contract procurement and claims processing
policies, and procedures that did not detect improper payments or
overpayments for District procurements. Auditors found that the Board
contracted with the former Assistant Superintendent for Business
immediately after his retirement and even though he was ineligible to
perform the services the District paid him approx- imately $834,920 over a
six-year period based on an unspecific and unsigned contract. In addition, auditors found the
District paid seven providers for services amounting to $940,451 without
Requests for Proposals for the services, nor did it negotiate written
contracts with six of the seven providers, and the District paid for
services that were not competitively
bid.
Finally, the audit identified
deficiencies in the District’s controls over payroll and capital
assets. Payroll deficiencies
allowed the District to make unautho- rized payments of $159,197 to its
former Treasurer and allowed the Superintendent
to increase nine admin- istrators’
salaries, which totaled approximately $40,182 without Board approval. Capital asset inventories were not
properly accounted for, cost records were not up-to-date, and District
policy does not provide guidance on inventory updates that result from the
disposal of assets or a change in an asset’s
location. |
35
recommendations
The report’s recommendations focus on
strengthening internal controls; providing public accountability for
decisions involving employment contracts and other District business; increasing Board oversight to
lessen the likelihood for future theft, misuse, and waste of District
funds; strengthening procurement, claims processing, and payroll
practices; and improving capital asset inventory policies, procedures, and
record keeping processes.
District officials generally disagreed
with the audit, which they believed focused unfairly on past problems, and
contend that they had already implemented most of the report’s
recommendations. |
|
Geneva City School
District Report
2006M-41
7th Judicial
District |
$13,904 adjustment
The auditor’s found that two of eight
administrators who terminated employment with the District during
2004-2005 received separation payments from the district. The relevant collective bargaining
agreements did not provide for separation payments, therefore the district
overpaid the two former administrators by $13,904.
The District does not adequately track
capital assets or maintain reliable records for acquisitions, location of
assets or their disposal.
The District’s inventory system is
unreliable and food inventories are virtually uncontrolled.
|
14 recommendations
The report recommends that policies and
procedures be adopted for unused leave payments upon separation of
employment; payments should be authorized as stated in the District’s
policy; such payments monitored; and steps to recover the $13,904 in
improper separation payments made should be taken.
A comprehensive capital asset policy
and related procedures should be established; physical inventory should be
taken with discrepancies resolved; capital asset tags should be utilized,
and procedures should be developed on the reporting of suspected thefts of
capital assets.
The report further recommended that a
comprehensive policy for effective inventory management and control
procedures should be established to assign responsibilities for
purchasing, storing and tracking the use of food stores, and to segregate
duties. A perpetual inventory
system should be set up to accurately record food items received and used;
periodic physical inventories should be reconciled to records and
differences resolved; physical security over food items at central
receiving and the cafeterias improved; a periodic analytical review
performed on unusual food inventory items or trends that might require
further investigation; and employees should not be allowed to purchase
bulk food at cost.
District officials generally agree with
the recommendations and indicated they plan to take corrective
action. |
|
Port Jervis City School
District Report
2006M-46
9th Judicial
District |
$0 adjustment
The audit found that employment
contracts between the District and employees not covered by collective
bargaining agreements did not require the earning of fringe benefits to be
prorated over the school year.
Annual fringe benefits were paid to a former Superintendent and a
former Assistant Superintendent for a full year even though they worked
just two and three months, respectively, of the school year. Specific language was not in their
contract that required fringe benefits to be accrued over the course of
the year, and prorated, which would have saved about $24,100.
Policies and procedures were not
adopted to govern the use of cellular phones or the purchase of meals and
refreshments at meetings. The
travel and conference expense policy was inadequate and key duties in the
treasurer’s office were not segregated.
A general ledger control account was
not maintained for capital assets and a current listing of capital assets
was not readily available.
|
10 recommendations
The report recommended that future
employment contracts for employees not covered by collective bargaining
should clearly describe how benefits will be paid upon separation. Formal guidelines should be
considered.
A policy should be adopted on the
District’s payment for meals and refreshments at school meetings with
provisions for monitoring; and the assignment and use of District owned
cellular telephones, with terms stated for personal use.
The travel policy should be revised to
set maximum rates for lodging and per diem rates for meals.
The report further recommends that the
treasurer’s duties should be reviewed to segregate incompatible
functions.
Finally, the report recommends that a
general ledger control account that shows the total value of all capital
assets should be kept and reconciled to the detailed inventory
records. Annual physical
inventories should be performed and differences with records
resolved. A uniform system
for identifying capital assets should be developed, assets should be
tagged, and the missing computer investigated.
District officials generally agree with
the findings as recommended. |
|
Lowville Central School
District Report
2006M-48
5th Judicial
District |
$0 adjustment
The audit found the Board had not
adopted a comprehensive capital asset policy and one person should have
overall responsibility for tracking capital assets and for the accuracy of
asset records.
|
3 recommendations
The report recommended that the Board
establish a comprehensive capital asset policy; capital assets should be
tagged; physical inventories should be conducted, compared with records,
and differences resolved.
District officials generally agree with
the findings. |
|
Bolivar-Richburg Central School
District Report
2006M-72
8th Judicial
District |
$0 adjustment
The audit found that while the District
contracts with an appraisal company to conduct a physical inventory of
capital assets, the District has not conducted a physical inventory since
1995. Therefore, the District
does not know whether inventory records are accurate and if they have
custody of purchased capital assets.
Certain duties are not properly
segregated: the business manager has the ability to prepare and sign
checks and also perform bank reconciliations; a clerk that prepares and
records payroll and another clerk who records contractual expenditures
have the ability to electronically produce and sign payroll and accounts
payable checks. |
4 recommendations
The report recommends that periodically
the District should conduct a physical inventory and compare it to the
capital asset inventory records and investigate discrepancies. All capital assets should have a
tag affixed and missing capital assets should be
investigated.
The report also recommends that the
duties performed by the business office personnel should be reviewed to
better segregate recordkeeping duties from the preparation of bank
reconciliations and the processing of disbursements.
District officials generally agree with
the recommendations and indicated that they either have or plan to
implement the findings.
|
|
Schuylerville Central School
District Report
2006M-67
4th Judicial
District |
$0 adjustment
The audit found that the Board has not
established adequate controls over computer and electronic inventory;
reimbursements for meals and beverages; and employee expenses.
|
12 recommendations
The report recommends that a
comprehensive policy for effective management of capital assets should be
established; an individual designated as responsible for inventories; and
physical access to assets limited. Procedures should be implemented to
record equipment purchases, student-built computers and disposals; to
affix tags to assets; to complete a comprehensive inventory of computer
and electronic equipment; and investigate differences between counts and
records. The District should also investigate the two missing computers
and three missing palm pilots and report to the Board.
The report also recommends that formal
written policies that define reimbursable costs should be adopted. The
Board should investigate the camera equipment and other reimbursements
claimed by the Superintendent; staff dinners and luncheons, especially
“bar sales”; and the reimbursement of District officials for internet
service costs with a policy for this practice, if appropriate. The Board
should discontinue the practice of providing gifts for staff at District
expense and appoint an independent claims auditor.
District officials generally agree with
the findings as recommended. |
|
Andes Central School
District Report
2006M-75
6th Judicial
District |
$0 adjustment
The audit found that the District’s
internal control policies and practices relating to capital assets are
weak and even non-existent in certain instances. A capital assets policy
outlining procedures for staff to follow when acquiring and disposing of
District assets has not been established; tagging of capital assets is not
done; the treasurer is not notified when assets are disposed; and a
physical inventory has not been performed since January 27,
2003. |
2 recommendations
The report recommends that the Board
should adopt a comprehensive capital asset policy that all assets be
recorded, identifying tags should be affixed to assets, procedures should
exist for acquiring and disposing of assets; physical inventories should
be required; and inventories should be reconciled with the detail property
records and discrepancies resolved.
The report also recommends that all
staff should follow the requirements of the procurement policy and obtain
quotes for goods and/or services as stated in the
policy.
The District officials generally agree
with the recommendations and indicated they plan to take corrective
action. |
|
McGraw Central School
District Report
2006M-76
6th Judicial
District |
$0 adjustment
The audit found that District officials
have not adopted a capital asset policy setting forth the duties, records,
and procedures required to adequately safeguard capital assets. District personnel do not
consistently affix tags to assets or perform periodic physical inventories
to verify the accuracy of the capital asset inventory records.
|
3 recommendations
The report recommends that a
comprehensive capital assets policy should be prepared and adopted;
periodic physical inventories of capital assets should be taken; and
inventories should be compared to accounting records, with differences
resolved. The final disposition of missing computers should be documented
and records adjusted.
District officials generally agree with
the findings as recommended. |
|
Seneca
Falls Central School
District Report
2006M-83
7th Judicial
District |
$0 adjustment
While no significant problems in
District operations were found, there were weaknesses in internal controls
over food inventories and District-issued cellular phones. District management has not
established policies that describe management’s expectations for the use
of these assets or procedures that state how the assets should be tracked
and accounted. |
2 recommendations
The Board and District officials should
assess the value of and risks to food inventories. Based on this
assessment management should establish formal policies and procedures
that: assign responsibility
for food inventories; describe the control systems, practices and
procedures that must be implemented to account for these inventories; and
describe how management will oversee the effectiveness of established
controls.
The Board should adopt a formal policy
covering cellular phone issuance and usage, and update the policy as
needed.
District officials generally agree with
the findings as recommended. |
|
Waverly Central School District Report
2006M-97
6th Judicial
District |
$0 adjustment
The audit found that one Board member
has a prohibited conflict of interest with the District. This Board member
is an employee, part owner and an agent for The Partners Insurance
Company. The District annually purchases their insurance policies from The
Partners Insurance Company and the Board member is the authorized
representative for that policy. The District paid about $429,000 during
the audit period to The Partners Insurance
Company.
Assets totaling about $40,000 purchased
during the 2004-2005 school year were not recorded on the capital asset
inventory record. Also, the District does not monitor the fixed asset
inventory and assets are not tagged.
The District does not segregate duties
over payroll. The payroll clerk creates and deletes employees within the
system, maintains the employees’ time records, processes the
payroll, and
distributes
the paychecks. The business manager reviews each payroll for mathematical
accuracy prior to the payroll clerk entering the payroll into the
financial management system (MUNIS); however, the business manager has
full access to all payroll functions within MUNIS. In addition there are
weaknesses in assigning user rights to the financial management system and
security over the electronic signature
disk. |
9 recommendations
The report recommends that immediate
action should be taken to eliminate the conflict of interest in its
purchase of insurance from The Partners Insurance Company.
A comprehensive capital asset policy
should be developed and a property control manager designated to track
capital assets and ensure the accuracy and usefulness of records. Each
piece of property to be tracked should be identified when it is received,
tagged, and the serial number of the property should be documented on the
asset listing. A physical inventory count of assets should be conducted at
least annually and discrepancies investigated.
Finally, the audit report recommends
that payroll duties should be assigned to employees in such a manner that
incompatible duties are segregated.
The District officials generally agree
with the recommendations and indicated they plan to take corrective
action.
|
|
Suffolk
County
Special Grand Jury |
|
Audit |
Major
Finding(s) |
Recommendation/Response |
|
Grand Jury Report CPL
§190.85(1)(C)
10th Judicial
District
|
$0
adjustment
The special grand jury conducted an
investigation into fiscal matters relating to school districts in
Suffolk
County. It received
evidence of examples of fraud, waste, and criminal conduct in the
financial arena of school districts. The report concludes that there was a
lack of oversight by those charged with the responsibility to safeguard
public funds, as well as a pervasive lack of internal controls. The report
identified six areas of concern relative to fiscal controls over school
districts.
The grand jury found that information
regarding salaries and fringe benefits paid to administrators is beyond
the reach of citizens. In addition the report found that many school
district administrators receive perks and benefits more usually associated
with private sector employees.
The report also notes recurrent
internal control weaknesses identified in school district management
letters and the audits of the State Comptroller. Some of the frequent
weaknesses identified were unsupervised accounting entries; insufficient
separation of duties; inadequate oversight of Capital Assets; lack of
written policies for cell phones, credit cards, computers, and travel and
meal reimbursements; failure to obtain bids; and excess unappropriated
fund balance.
Pension fraud was also identified in
the report as an area of concern.
The report identifies instances of individuals collecting pension
checks and continuing to collect payments from school districts through a
consultant arrangement. The
report concludes in many instances the consultant arrangement was in name
only, and the individuals were actually employees of the school district,
and therefore subject to limitations on
compensation.
The report also discusses the lack of a
requirement for continuing education for school district administrators,
unfunded mandates placed on school districts, and mismanage-ment of grant
funds.
|
55
recommendations
27 to the
legislature
22 to administrative
entities
6 to the executive
branch
The recommendations center on the
creation of a New York Inspector General for Education, mandating
continuing education for public school administrators, improved access to
salary and benefit information, and establishing school district
compensation committees.
The report also recommends increased
penalties for pension abuse, tightening the pension waiver process, and
modifying the grant reporting process. |
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