New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Frankfort-Schuyler Central School District, Hammondsport Central School District, Putnam Northern Westchester Board of Cooperative Educational Services, Raquette Lake Union Free School District and the Western Suffolk Board of Cooperative Educational Services.

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].

Frankfort-Schuyler Central School District – Financial Management (Herkimer County)

District officials did not adopt budgets based on historical or known trends but instead overestimated expenditures by almost $2.7 million from 2011-12 through 2014-15. The district appropriated $2.4 million in fund balance as a financing source in the annual budgets for 2012-13 through 2015-16. However, the district’s budgeting practices resulted in operating surpluses in three of these years and will also likely end 2015-16 with an operating surplus. As a result, none of the appropriated fund balance will be needed to finance operations. The district also retained an average of approximately $342,000 of unrestricted funds in the debt service fund, $1.1 million in the agency fund’s group health insurance account and $429,000 in excessive reserves over these years. When adding back unused appropriated fund balance, excess money retained in the debt service, agency funds and reserves, the district’s recalculated unrestricted fund balance exceeded the statutory limit, averaging more than 18 percent of the ensuing year’s appropriations, or more than four times the statutory limit.

Hammondsport Central School District – Nonresident Tuition (Steuben County)

District officials should improve their billing process for nonresident students by determining actual attendance dates. Auditors reviewed 10 tuition invoices for seven nonresident students placed at the district totaling $219,941 from the 2012-13 through 2014-15 years. While district officials effectively identified nonresident students who were placed at the district, the treasurer ,a href="used incorrect attendance dates when calculating bills for three students. As a result, two home districts were underbilled by $5,078 and one home district was overbilled by $638.

Putnam Northern Westchester Board of Cooperative Educational Services (BOCES) – Information Technology and Claims Auditing (2016M-205)

BOCES officials need to improve controls to adequately secure and protect IT systems. The rooms housing the servers and IT infrastructure did not have safeguards to track access and protect IT assets, and BOCES officials have not developed a disaster recovery plan to guide action in the event of a disaster. Additionally, the board appointed a claims auditor but needs to improve its oversight of the claims auditing function. There was no evidence that 33 claims totaling $100,873 were checked to ensure they did not exceed their related purchase orders or that 13 claims totaling $42,526 agreed with approval contracts or agreements.

Raquette Lake Union Free School District – Monitoring Financial Condition (Hamilton County)

The board did not ensure that adequate accounting records and reports were maintained and did not effectively monitor the district’s financial operations. The clerk did not maintain accurate and complete accounting records and the treasurer did not provide the board with adequate periodic reports. Furthermore, auditors recalculated the district’s assets, liabilities and fund balance and found unrestricted fund balance deficits for the 2013-14 and 2014-15 fiscal years and budgetary deficits for the 2013-14, 2014-15 and 2015-16 fiscal years. Additionally, the district incurred a cash flow shortage that precluded employees from cashing their paychecks from July 2013 to September 2013.

Western Suffolk Board of Cooperative Educational Services – Budget Transfers and Confirming Purchase Orders (2016M-218)

The board did not always enforce its policies and procedures. Auditors reviewed 30 budget transfers totaling $9.2 million and found that 24 totaling $7.8 million were not presented to the board for approval. The board approved the remaining six budget transfers totaling $1.4 million between 18 and 70 days after the transfer was processed. The board’s ability to monitor the budget and ensure that account codes are not overspent is compromised when it does not approve budget transfers. 

For access to state and local government spending and 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.