Objective

To determine whether the State Education Department (Department) is monitoring the use of Smart Schools Bond Act funds to ensure that school districts have appropriately utilized them for their intended purpose. The audit covers the period April 1, 2015 through August 27, 2019.

About the Program

The Smart Schools Bond Act (Act) was approved by New York State voters in November 2014, authorizing the issuance of up to $2 billion in bonds to finance improvements to educational technology and infrastructure for students throughout the State. Under the Act, school districts were allocated a portion of the $2 billion based on the percentage of selected school aid they received. Districts must develop a Smart Schools Investment Plan (Plan) that details how they propose to use the funds. Each Plan must be approved by the Smart Schools Review Board (Review Board), composed of the Chancellor of the State University of New York, the Director of the Budget, and the Department’s Commissioner or their representatives. Once Plans are approved by the Review Board, districts may begin to submit requests for reimbursement of expenses related to purchases or projects in their approved Plans. As of June 2019, the Department had approved 655 Plans with projects valued at $1.3 billion, and districts had been reimbursed a total of $255 million.

Key Findings

• While the Department has implemented a detailed upfront process for collecting and reviewing districts’ Plans, we identified risks with how it reimburses claims submitted in connection with approved Plans. Specifically, the Department does not collect detailed supporting information necessary to ensure that expenses were actually incurred, were for approved projects or items, and complied with the other requirements for reimbursement.
• The ten districts we sampled utilized Act funds for their intended purposes according to their approved Plans and maintained the supporting documentation for the expenditures we reviewed. However, we identified one district that was reimbursed a total of $549,749 for expenses incurred as part of contracts initiated prior to Review Board approval of its Plan. One invoice was dated five months before the Plan was approved by the Review Board.
• The Department’s Plan approval process is lengthy, taking an average of 290 days, which can affect districts’ ability to undertake projects.

Key Recommendations

• Re-evaluate the risk of not obtaining documentation to support district expenditures prior to reimbursement.
• Evaluate opportunities to streamline the application review process for both applicants and reviewers in an effort to shorten time to approval.