Audit Objective
Did South Huntington Union Free School District (District) officials ensure credit card charges were authorized, adequately supported, for valid District purposes and properly approved?
Audit Period
July 1, 2022 – October 31, 2023
We extended our audit period back to August 1, 2019, and forward to November 2, 2023, to review the District’s distribution of credit cards.
Understanding the Audit Area
School district officials must ensure credit card charges are properly authorized, supported, for legitimate district purposes and appropriately approved to safeguard public funds, maintain taxpayer trust and comply with legal and financial oversight responsibilities.
Strong oversight helps prevent unauthorized, wasteful or unnecessary spendings, reduces the risk of fraud and misuse and ensures purchases directly support district operations and educational objectives. Requiring adequate documentation and approval also promotes transparency and accountability by creating a clear audit trail that demonstrates who made purchases, why the purchases were necessary and the costs were reasonable and allowable. In addition, effective credit card controls help ensure accurate financial reporting, compliance with district policies and State requirements, and provide the board and taxpayers assurance that district resources are being managed prudently and in the best interest of students and the community.
During the audit period, District officials made 2,878 purchases using credit cards totaling $196,039, including 2,689 fuel card purchases totaling $165,293 and 189 general card purchases totaling $30,746.
Audit Summary
District officials did not ensure that credit card charges were authorized, adequately supported, for valid District purposes or properly approved. As a result, the Board of Education (Board) and officials did not establish adequate oversight and internal controls to provide reasonable assurance that District credit cards were used appropriately and in the best interest of taxpayers. This increased the risk that credit cards could be used for unnecessary, inappropriate, or unauthorized purchases, exposing the District to an increased risk of theft, waste and abuse, and undermining public trust. In addition, because the Board did not ensure that all claims were reviewed and approved by the claims auditor prior to payment, the District faced an increased risk of paying for goods or services that did not serve a proper District purpose.
We determined the following:
- The Board-appointed claims auditor improperly approved claims for payment and did not audit 13 of the 32 credit card claims totaling $73,628 prior to payment, including six fuel credit card (fuel card) claims totaling $57,232 and seven general purpose credit card (general card) claims totaling $16,396.
- Of the 189 general credit card purchases reviewed totaling $30,746, 31 transactions (16 percent) totaling $4,995 did not have detailed itemized receipts and 17 transactions (9 percent) totaling $506 had no supporting receipts attached.
- District officials did not consistently comply with the Board-adopted purchasing and credit card policies. Of the 189 general card purchases we reviewed totaling $30,746, we identified 196 issues involving transactions that were either made by unauthorized card users, had no District purpose, were not for a necessary District purpose, and were not made in accordance with the District’s purchasing policy:
- 35 purchases (19 percent) totaling $7,401 were made by unauthorized individuals.
- 110 purchases (58 percent) totaling $7,040 were not necessary District expenditures, including 62 purchases totaling $5,518 for meals and 48 purchases totaling $1,522 for other discretionary items.
- 36 purchases totaling $5,378 were not for District operations, including purchases for Extra-Classroom Activity (ECA) clubs, gifts and event tickets.
- 15 purchases totaling $9,138 were not made in accordance with the District’s purchasing policy, including $6,137 spent for Board retreats in 2022 and 2023.
- The Board and District officials did not provide adequate oversight of fuel card use. Of the 2,689 fuel card purchases totaling $165,293 reviewed, we identified weaknesses and unsupported transactions, including the following:
- District officials did not establish written policies and procedures to provide reasonable assurance that the fuel cards were used for their intended purpose and properly accounted for.
- District officials did not maintain a comprehensive inventory list of the 32 fuel cards that were distributed to six departments during the audit period.
- Of the six departments that were issued fuel cards, four departments did not maintain fuel logs, and the remaining two departments maintained inconsistent logs containing varying information.
- 166 of the 888 fuel card purchases reviewed (19 percent) totaling $12,054 were not supported by receipts.
In addition, the Transportation Supervisor used a District fuel card to purchase $134 of fuel for travel to a conference in Albany, New York and also submitted an expense reimbursement claim totaling $301 that included mileage and fuel costs for the same trip. After we brought this matter to District officials, the Transportation Supervisor repaid $301 to the District.
The report includes 16 recommendations that, if implemented, will strengthen internal controls and oversight and help ensure credit card purchases are authorized, adequately supported, for valid District purposes and appropriately reviewed and approved. District officials generally disagreed with our recommendations, and their response is included in Appendix B. Appendix C includes our comments on issues raised in the District’s response letter.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the Office of the New York State Comptroller’s (OSC) authority as set forth in Article 3 of the New York State General Municipal Law. Our methodology and standards are included in Appendix D.
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 GML, Section 2116-a (3)(c) of the New York State Education Law (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.