Purpose of Audit

The purpose of our audit was to review the internal controls over the District’s financial activities for the period July 1, 2011 through November 14, 2013.

Background

The Marlboro Central School District is located in the Town of Marlborough, Ulster County. The District, which is governed by an elected seven-member Board of Education, operates three schools with approximately 2,000 students. Budgeted appropriations for the 2013-14 fiscal year were approximately $50.6 million.

Key Findings

• Both the Superintendent and Assistant Superintendent of Personnel and Technology have private interest in a limited liability company (LLC) that provided report card services to the District. After the LLC discontinued providing services, the Superintendent recommended to the Board, and the Board approved, a contract with the LLC’s principal owner to provide services similar to what the LLC had previously provided.
• District officials did not award contracts to the LLC or the principal owner based on a competitive process.
• We found no evidence in the Board minutes that the District entered into formal contracts with the LLC and the principal owner that provided the necessary details of service and compensation.

Key Recommendations

• Ensure that District official do not participate in the process of awarding contracts to their private business associates and evaluate the contract with the LLC’s principal owner and determine whether it is in the best interests of the District.
• Seek competition from potential vendors and award the contract for report card services on the basis of a competitive process.
• Enter into written agreements will all professional service providers.