New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Evergreen Charter School, Farmingdale Union Free School District, Hilton Central School District, Marcellus Central School District, Mexico Academy Central School District, Morristown Central School District, Ogdensburg City School District, Oswego City School District, Sweet Home Central School District and the West Babylon Union Free School District. 

State Comptroller DiNapoli has made it a priority to audit school district, BOCES and charter school finances and operations to ensure money is being spent appropriately and effectively. The Comptroller’s audits are designed to help schools improve their financial management practices and ensure proper policies and procedures are in place to protect taxpayer dollars from waste, fraud and abuse. New York’s school districts annually spend approximately $60 billion in federal, state and local funds.

For additional background or a comment on a specific audit, please contact Brian Butry at 518-474-4015 or email: [email protected].

Evergreen Charter School – Employee Fingerprinting (Nassau County)

The board has not established a fingerprinting policy. As a result, school officials allowed employees to be hired and have contact with students prior to receiving fingerprint clearances and allowed independent contractors to have contact with students without first verifying they held a valid clearance. 

Farmingdale Union Free School District – Financial Condition (Nassau County)

The board adopted budgets for fiscal years 2011-12 through 2014-15 that appropriated a total of $28 million in fund balance to finance operations. However, because they underestimated revenues by a total of $9.8 million and overestimated appropriations by a total of $26.6 million over that period, district officials used only $4 million (14 percent) of the appropriated fund balance. During this period, the district also increased the tax levy by $10 million, or 8.8 percent. 

Hilton Central School District – Payroll and Leave Accruals (Monroe County)

Auditors found that employee salaries, wages and leave time were accurately paid. However, even though district officials implemented specific procedures to ensure employee leave accruals were earned in accordance with board-authorized amounts, they were not followed consistently. Time sheets were modified without employee re-certification and leave accrual usage input into the district’s financial system were not reviewed for accuracy. 

Marcellus Central School District – Procurement (Onondaga County)

During the audit period, district officials awarded seven professional service contracts totaling almost $1.1 million without the benefit of competition, as required by the district’s procurement policy. Officials did not comply with the district’s policy when procuring goods and services below the competitive bidding threshold for 19 purchases totaling $119,130 or with statutory bidding requirements and district policy for two purchases totaling $62,153. 

Mexico Academy Central School District – Financial Management (Oswego County)

Generally, the board and district officials have effectively managed the district’s finances. However, a new agreement for Payment In Lieu of Taxes (PILOT) and recent tax certiorari ruling may present financial challenges in the upcoming fiscal years if mitigating steps are not taken. Based on the new terms of the PILOT, the district will receive approximately $18 million in payments over the next five years compared to the $63 million received over the previous five years. 

Morristown Central School District – Claims Audit Process (St. Lawrence County)

District officials have established adequate procedures over the claims processing function to ensure that claims are adequately documented and supported, are for appropriate purposes, and are audited and approved prior to payment. Establishing and adhering to effective claims auditing procedures decreases the risk that errors or irregularities in processing and paying claims could occur.

Ogdensburg City School District – Payroll (St. Lawrence County)

The district had instituted a compensating control of having the superintendent review and certify the final payroll registers. However, the superintendent’s reviews are not extensive enough. The superintendent does not trace payroll amounts to source documents to ensure that payments were based on the actual hours or days worked. In addition, he did not verify that payments were based on board-authorized hourly rates or annual salaries. Although auditors did not find any discrepancies, the lack of adequate oversight of the payroll clerk’s work increases the risk that errors or irregularities could occur and remain undetected.

Oswego City School District – Financial Management and Nonresident Foster Student Tuition (Cayuga County)

The district does not have an effective process in place to identify all nonresident foster students receiving educational services from the district. Due to weaknesses in the district’s identification and billing process, the district did not bill and receive $237,000 from other school districts for eligible nonresident foster children who received educational services during the 2012-13 through 2014-15 fiscal years. 

Sweet Home Central School District – Financial Management (Erie County)

The board did not adequately manage the district’s finances by ensuring budgets were realistic. District officials appropriated $2.6 million of fund balance to help finance the budget each year, however, none of it was needed because district officials overestimated appropriations each year by an average of $2.7 million, or 4 percent. When unused appropriated fund balance is added back, unrestricted fund balance exceeded the statutory limit by amounts ranging from $2 million to $2.4 million, or 2.9 to 3.6 percentage points. District officials have increased the tax levy by nearly 14 percent from 2012-13 through 2015-16.

West Babylon Union Free School District – School Lunch Operations (Suffolk County)

Meals in the district cost more to prepare than the revenue generated by the meal sales. Furthermore, the school lunch productivity is lower than industry standards. These deficiencies have resulted in the district school lunch fund reporting a deficit total fund balance of $452,041 as of June 30, 2015, despite annual $50,000 subsidies from the general fund. If the district could reduce or eliminate the need for these operational subsidies, those resources could be used for other district purposes.

For access to state and local government spending and nearly 50,000 state contracts, visit OpenBookNY. The easy-to-use website was created by Comptroller DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.