Herkimer Central School District – 2014 Building Renovation Capital Project (2022M-136)

Issued Date
November 23, 2022

[read complete report – pdf]

Audit Objective

Determine whether the Herkimer Central School District (District) Board of Education (Board) and officials properly planned and managed the 2014 building renovation project.

Key Findings

The Board and District officials did not properly plan and manage the renovation projectOfficials:

  • Borrowed $2 million more than needed for the initial project and used the funds to make other non-voter approved renovations.
  • Borrowed project funds early, resulting in about $89,000 in unnecessary additional interest costs.
  • Entered into a project management agreement that did not clearly define the services to be provided and paid related claims that lack sufficient detail. Paid claims exceeded the authorized purchase order by $95,100.

Release of this report was held in abeyance due to a separate Comptroller investigation involving the former clerk of the works. In March 2022, the former clerk of the works was arrested for defrauding the New York State and Local Retirement System out of $52,514 in pension payments. In September 2022, the former clerk of the works pled guilty to attempted scheme to defraud and paid full restitution of $52,514.

Key Recommendations

  • Coordinate project borrowing with the work and cash flow.
  • Ensure written agreements with service providers clearly define the services to be provided and claims are sufficiently supported.

District officials generally agreed with our findings and indicated they plan to take corrective action.