State Comptroller DiNapoli Releases Municipal & School Audits

July 3, 2024

New York State Comptroller Thomas P. DiNapoli today announced the following local government and school audits were issued.

Ardsley Union Free School District - Financial Management (Westchester County)

The board and district officials did not effectively manage the district's fund balance and reserves. As a result, the district levied more taxes than needed to fund operations. The board and district officials overestimated appropriations from 2017-18 through 2021-22 (excluding 2018-19) by an average of $4.1 million, totaling $16.5 million. In addition, the district appropriated fund balance at an annual average of $2.9 million from 2017-18 through 2021-22 while it had an operating surplus in each of those years averaging $1.1 million. As a result, the appropriated fund balance was not used to fund operations and taxpayers were taxed more than necessary.

Rye City School District - Payroll (Westchester County)

District officials did not budget for approximately $600,000 of incurred overtime, and generally recorded it as regular salaries instead of overtime. As a result, residents are not being made aware of what the district expects to incur in overtime costs and the budgets are not transparent. Auditors analyzed the overtime paid to 15 employees with the highest overtime charges for the audit period and reviewed all of their time records and payments totaling $428,220. Auditors found officials recorded $409,391 of that money as salaries, which precluded officials from monitoring overtime expenditures because they did not know how much overtime was being paid. The district also lacked overtime monitoring policies and procedures and paid six employees $2,097 in overtime wages without proper supporting documentation.

Half Hollow Hills Central School District - Information Technology (IT) Equipment Inventory Records (Suffolk County)

District officials did not always appropriately track, inventory and safeguard IT equipment and IT department staff did not maintain complete inventory records. As a result, district officials cannot assure taxpayers that all IT equipment is adequately accounted for and would be detected if lost, stolen or misused. Auditors selected 100 pieces of equipment (devices) costing $88,223 to confirm their location and that they were properly inventoried and determined that 23% of the equipment was not properly accounted for. Specifically, three IT devices, worth a total of $3,012 could not be located. Another 20 IT devices that cost $19,914 were not listed in the district's accounting detail report.

Greater Southern Tier Board of Cooperative Educational Services (BOCES) - Capital Assets (Chemung County)

BOCES officials did not properly monitor and account for all capital assets and have not conducted periodic physical inventories in at least 10 years. As a result, officials lack assurance the capital asset records are complete and accurate, and that assets are protected from loss, theft, misuse and obsolescence. Auditors reviewed 50 assets with a combined purchase price totaling approximately $259,900 and determined that 10 assets worth a combined $68,600 had exceptions and eight of those assets, totaling approximately $65,400, did not have required asset tags, were not on the inventory asset list and/or had incorrect locations on the inventory list. In addition, a camcorder with a purchase price of $1,700 could not be located or accounted for and a telecommunications switch with a purchase price of $1,500 was still active on the inventory list but was disposed of in October 2018.

Town of Gorham - Budgeting (Ontario County)

The board did not develop and adopt realistic budgets, a financial plan or fund balance and reserve policies. As a result, the town maintained unreasonable fund balance levels and likely levied more taxes than necessary. From fiscal years 2020 through 2022, the town-wide (TW) general, town-outside-village (TOV) general, TOV highway, sewer and water funds combined generated a total of $1.6 million in operating surpluses. In 2021, sales tax revenues totaling $230,000 were inappropriately recorded in the TW funds instead of the TOV funds, given property taxes were levied in the TOV funds. In addition, an excessive $1.5 million of unrestricted fund balance was maintained in the TW general fund as of Dec. 31, 2022. Lastly, budget transfers were made at year end, rather than as necessary throughout the fiscal year, resulting in appropriation accounts being over expended.

Town of Gorham - Procurement (Ontario County)

Town officials did not always procure goods and services in accordance with town policy, statutory requirements and good business practices. As a result, there is an increased risk that the town paid more than necessary for goods and services or made purchases that were not for town purposes. For example, auditors reviewed 65 individual and aggregate purchases totaling $2.5 million and determined 16 purchases totaling $468,738 were not competitively bid. Officials also did not comply with purchasing policy requirements for 41 purchases totaling $1.4 million. Auditors reviewed all nine professional services vendors totaling $1.1 million and determined officials did not seek competition when procuring any of these vendors. Two of these vendors lacked written agreements detailing the services to be provided and their cost. Auditors also reviewed all 116 credit card purchases totaling $29,562 and determined 12 purchases totaling $3,726 did not have adequate supporting documentation to indicate they were appropriate town purchases.

Renaissance Academy Charter School of the Arts - Non-Payroll Disbursements (Monroe County)

School officials did not ensure that all disbursements were properly reviewed and approved, or adequately supported. Certain disbursements were made without knowing what was purchased or whether the disbursements were for appropriate school purposes. During the period reviewed, the school's disbursements totaled $4.8 million and although a prior audit and other external audits noted school disbursements lacked adequate supporting documentation, sufficient corrective action was not taken, including adopting adequate written disbursements policies. Auditors found 62% of the non-credit card disbursements tested totaling $276,871 and 86% of the credit card charges tested totaling $43,439 lacked both an itemized invoice or receipt and a documented school purpose. In addition, the chief education officer (CEO) and chief operating officer have the ability to make purchases, prepare checks and modify or delete data in the financial software and the CEO signs checks. The lack of adequate controls increases the risk for disbursements to be made for non-school purposes and accounting records being altered without detection.

Farmingdale Union Free School District - Payroll (Nassau County)

District officials did not properly monitor, approve and control overtime. Officials also did not ensure all overtime payments were necessary and properly supported. As a result, there is a significant risk that employees may have been paid for unnecessary overtime work that could have been avoided with adequate planning. Auditors determined that the board and district officials did not establish adequate overtime controls or adopt written policies and procedures to ensure overtime was incurred only when necessary and unavoidable. They also did not ensure all overtime was preapproved and monitored. The district paid 20 employees $167,034 for nonemergency overtime work, including routine job duties and planned events, without written preapproval and did not budget for overtime separate from other payroll expenditures. As a result, district officials did not have adequate information to properly monitor the overtime budget and expenditures.

Village of Herkimer - Audit Follow Up (Herkimer County)

The purpose of this review was to assess the village's progress in implementing recommendations in the audit report released in August 2019. Based on limited procedures, the village has demonstrated minimal progress implementing corrective action. Of the seven audit recommendations, one recommendation was partially implemented, and six recommendations were not implemented.