New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Bellmore Union Free School District, Jefferson-Lewis-Hamilton-Herkimer-Oneida BOCES, Olean City School District, Port Washington Union Free School District, Rensselaer City School District and the Spencerport Central School District.
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].
Auditors reviewed the district’s general fund budgets for the 2012-13 through 2014-15 fiscal years and found that actual expenditures were less than the budgeted appropriations for each fiscal year. The board overestimated expenditures by an average of $4.4 million per year from 2012-13 through 2014-15. In addition, the board adopted budgets that included about $3.8 million in appropriated fund balance to finance district operations each year. However, the amounts appropriated were not used because the board overestimated expenditures. Because the district’s budgets resulted in operating surpluses in all three years reviewed, the district did not use any of the fund balance appropriated to finance operations. Instead, fund balance increased by the amount of the operating surplus. Over the past three fiscal years, the district’s reported unrestricted fund balance at year- end exceeded the statutory limit.
Jefferson-Lewis-Hamilton-Herkimer-Oneida Board of Cooperative Educational Services – Separation Payments (2016M-304)
Auditors found that BOCES officials made accurate employee separation payments and granted service credit as authorized by the collective bargaining agreements, employment contract or district handbook. Establishing and adhering to an effective process decreases the risk that incorrectly calculated or unauthorized payments or credits will be made.
District officials have not adopted realistic budgets or properly managed fund balance. District officials have maintained unrestricted fund balance slightly above the statutory limit for the past three years and have appropriated approximately $900,000 of fund balance annually to help finance budgeted appropriations. However, the appropriated fund balance was not needed because district officials overestimated appropriations each year by an average of $2.3 million (6 percent). With unused appropriated fund balance added back, unrestricted fund balance exceeded the statutory limit of 4 percent by approximately $1.1 million or 3 percentage points each year.
While the board developed an adequate policy to ensure claims were accurate, it did not ensure the claims auditor received the necessary training to carry out the policy. A review of 50 claims showed that 31 totaling $220,750 did not contain the required quotes, bids or contracts. Without this documentation, the claims auditor could not conduct a thorough audit of claims. Also, 41 of the claims totaling $277,418 had no receiving documents or packing slips attached to the voucher packages. A review of 28 open purchase orders totaling $91,745 showed that 10 were overspent by $49,001. Although the claims auditor verified the vouchers or invoices against the purchase orders, the claims auditor did not verify that vouchers or invoices agreed with quotes, bids or contracts.
The board did not adopt realistic, structurally balanced general fund budgets. The board appropriated a total of $4.8 million of fund balance and reserve funds during the 2012-13 through 2014-15 fiscal years. However, the board overestimated revenues by $3.3 million (5 percent), resulting in operating deficits that were larger than planned and declining general fund and reserve fund balances. General fund balance declined 84 percent, from $8.4 million at the beginning of fiscal year 2012-13 to $1.4 million at the end of fiscal year 2014-15. Combined reserve fund balances have declined by 58 percent, from $3.5 million to $1.5 million during the same period.
The board, superintendent and executive director generally managed district finances properly. However, appropriations in the district’s adopted budgets from 2012-13 through 2015-16 were overestimated by approximately $12.4 million (4 percent). While the board and district officials generally maintained unrestricted fund balance levels in accordance with the statutory limit, auditors found that they appropriated fund balance in the adopted budget each year that was not actually used as budgeted because the district realized operating surpluses.
For access to state and local government spending and nearly 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.