Audit Objective

Determine whether Burnt Hills - Ballston Lake Central School District (District) officials ensured the third-party administrator (administrator) returned forfeited funds from the Health Flexible Spending Arrangement (FSA) and Dependent Care Assistance Program (DCAP) in a timely manner.

Key Findings

District officials were not aware that the FSA and DCAP administrator did not return forfeited funds totaling $25,701 to the District, as required. Because officials did not ensure the forfeited funds were returned, the funds were not available for the District’s use. Officials did not:

• Ensure the administrator provided the year-end accounting of employees’ FSA and DCAP accounts, as required by the written services agreement.
• Annually reconcile FSA and DCAP activity to calculate the amount of forfeited funds that should be returned to the District.
• Establish written procedures for monitoring employees’ FSA and DCAP accounts and ensure the administrator returned all forfeited funds in a timely manner.

Key Recommendations

• Establish written procedures to ensure the administrator returns all forfeited funds from the FSA and DCAP in a timely manner.
• Ensure the administrator returns all forfeited funds owed to the District.
• Consult with legal counsel to ensure the proper use of forfeited funds returned by the administrator.

District officials generally agreed with our recommendations and have initiated, or indicated they planned to initiate, corrective action.