Audit Objective
Did Manhasset Union Free School District (District) officials ensure that non-payroll disbursements were adequately supported, for valid District purposes and properly audited and approved?
Audit Period
July 1, 2023 – December 31, 2024
Understanding the Audit Area
Non-payroll disbursements represent a significant portion of a school district’s (district’s) expenditures, covering a wide range of operational costs, such as equipment, supplies and contractual services for capital projects. District officials are responsible for overseeing and approving these disbursements to ensure they are appropriate, properly documented and in accordance with the district’s budget and procurement policies. During our audit period, the District made 4,343 non-payroll disbursements totaling $112.9 million, including 157 wire transfers totaling $44.7 million and 4,186 other non-payroll disbursements totaling $68.2 million.
The Board of Education (Board) appointed the claims auditor to audit and approve all claims, including non-payroll disbursements. The Assistant Superintendent for Business (ASB) is responsible for overseeing the financial operations in the Business Office, including the Purchasing Agent who is responsible for authorizing the expenditure of funds for the purchase of goods and services. The Treasurer is responsible for preparing and completing wire transfers, which are reviewed by the ASB and claims auditor.
Audit Summary
While the Board and District officials generally ensured that the non-payroll disbursements we reviewed totaling approximately $2.8 million were adequately supported and for valid District purposes, they did not always ensure that the disbursements were properly audited and approved before officials made the disbursements. As a result, there was an increased risk that improper or unsupported payments could have been made and may not have been detected and corrected.
We reviewed 15 wire transfers totaling $2.4 million and determined officials properly reviewed and approved them. We also reviewed 50 non-payroll disbursements, including 137 invoices, totaling $379,209 to determine whether officials ensured disbursements were adequately supported, for valid District purposes and properly audited and approved. We determined that the disbursements reviewed included 10 invoices totaling $26,441 that were not properly audited or approved before they were paid.
The 10 invoices contained eight confirming purchase orders, meaning that purchase orders were issued after goods and services were received rather than approving purchase orders before the goods and services were acquired. Confirming purchase orders do not allow for a proper audit of claims because the claims auditor could not complete the approval and price verification steps of the claims audit process. This weakness in the District’s disbursements process increased the risk that purchases were made before ensuring that funds were available, and appropriations could have been overspent.
The report includes two recommendations that, if implemented, will improve District officials’ ability to properly audit and approve non-payroll disbursements. District officials agreed with our findings and recommendations and indicated they planned to initiate corrective action.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the State Comptroller’s authority as set forth in Article 3 of the New York State General Municipal Law. Our methodology and standards are included in Appendix C.
The Board has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report must be prepared and provided to our office within 90 days, pursuant to Section 35 of the New York State General Municipal Law, Section 2116-a (3)(c) of the New York State Education Law and Section 170.12 of the Regulations of the Commissioner of Education. To the extent practicable, implementation of the CAP must begin by the end of the next fiscal year. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. The CAP should be posted on the District’s website for public review.