Purpose of Audit

The purpose of our audit was to determine if the Board provided sufficient oversight of the Middle School construction project and of the management company which assists with the School’s academic and financial operations for the period July 1, 2013 through August 19, 2014.

Background

The Charter School of Educational Excellence is a public school, located in the City of Yonkers, that is not under the control of the local school board. The School, which is governed by an eight-member Board of Trustees, had approximately 640 students as of June 30, 2014. Operating expenses for the 2013-14 fiscal year totaled approximately $10 million.

Key Findings

• School officials did not seek competition for approximately $6.8 million in project-related expenses for the Middle School project.
• The Middle School project exceeded the authorized cost by $2.6 million.
• The management company pays most of the School’s bills, and School officials do not receive or review bank statements or reconciliations.

Key Recommendations

• Use a competitive process when selecting major contractors or professionals for a capital project.
• Strengthen cost control safeguards to protect against construction cost overruns for capital projects.
• Review bank statements and reconciliations periodically.