On May 8, 2020 New York State Comptroller Thomas P. DiNapoli announced the following Municipalities and school district audits have been issued.
Click on the text typed in color to access the full text of the audit.
Municipalities
Inadequate budgetary practices resulted in the highway fund balance declining from $58,241 on January 1, 2017 to $5,714 as of December 31, 2019.The highway fund’s appropriations were overspent three consecutive years (2017-2019), resulting in operating deficits. Auditors determined that the board does not have a policy to maintain a reasonable level of fund balance. In addition, the board has not adopted a long-term financial or capital plan.
The records maintained by the director of finance were generally up-to-date and complete. Auditors found the director of finance established adequate procedures, maintained appropriate records and properly reported the condition of court and trust funds to the State Comptroller as required. Auditors also identified 90 actions totaling $4,405 that improperly remained in the director of finance’s custody that should have been turned over to the Office of the State Comptroller as abandoned property. Auditors also found the county clerk is not maintaining appropriate court and trust fund records.
The board established adequate long-term plans which appropriately addressed the town’s operational and capital needs and funding sources. Auditors determined town officials adequately safeguarded information technology assets.
Newark Valley Fire District – Board Oversight (Tioga County)
Auditors found control weaknesses in the community hall rental process. Documentation of compliance with the procurement policy was incomplete. Although monthly financial reports were accurate and reliable, the board did not perform an annual audit of the treasurer’s records for 2017 and 2018. The treasurer did not file required annual update documents with the Office of the State Comptroller.
School Districts
Brunswick Central School District – Online Banking (Rensselaer County)
The board did not adopt an online banking policy. Employees accessed nonbusiness websites although it is prohibited by district policy. In addition, district officials did not provide Information Technology (IT) security awareness training to users. Sensitive IT control weaknesses were communicated confidentially to officials.
East Islip Union Free School District – Financial Management (Suffolk County)
The district’s general fund balance increased by $12.9 million (141 percent) from 2015-16 through 2018-19, due to appropriations being overestimated by an average of $5.1 million (4.7 percent) per year. Over the last four fiscal years, the district reported unassigned fund balance equal to 4 percent of the ensuing year’s appropriations. However, when unused appropriated fund balance is added back, unassigned fund balance exceeds the statutory limit by up to 4.2 percentage points.
Fort Edward Union Free School District – Financial Condition (Washington County)
The district’s financial condition significantly declined due to a successful tax certiorari challenge. As a result, unrestricted fund balance as of June 30, 2019 totaled less than 1 percent of the next year’s appropriations. Based on the district’s outstanding tax certiorari liability of approximately $1.8 million, the district has an unfunded liability of approximately $873,000 as of July 31, 2019. District officials did not adopt a multiyear financial plan to address future unexpected revenue shortfalls or unanticipated expenditures.
Pawling Central School District – Budgeting Practices and Reserves (Dutchess and Putnam Counties)
District officials appropriated unrestricted fund balance as a financing source each year for the 2014-15 through 2018-19 budgets. Auditors found that only a fraction was used to finance operations, because the district generated operating surpluses in three of those years. After adding back the appropriated fund balance that was not used, the recalculated unrestricted fund balance for fiscal years 2014-15 through 2018-19 ranged from 7 percent to 12.15 percent of the ensuing year’s appropriations, exceeding the 4 percent statutory limit. Of the district’s six reserves, two were not used as intended and appear to be overfunded.
Shelter Island Union Free School District – Fund Balance (Suffolk County)
Surplus fund balance levels exceeded the statutory limit by at least 5.4 percentage points from fiscal years 2015-16 through 2018-19. Annual budgets overestimated appropriations by an average of $685,822 (6 percent) from 2015-16 through 2018-19. As a result, $1.7 million in appropriated fund balance was not used to fund operations during this time. In addition, the unemployment insurance reserve was overfunded and the employee benefit accrued liability reserve was not established by board resolution. Auditors also determined that district officials have not appropriately prepared or implemented corrective action plans (CAPs) to previous audits.
Rochester City School District – Budgeting and Multiyear Financial Planning (Monroe County)
The board and district officials neglected to use accurate estimates of appropriations to balance the 2018-19 budget, which contributed to an unplanned operating deficit of $27.4 million. Auditors also determined that the board failed to adopt a structurally balanced budget and did not follow its fund balance policy when it appropriated fund balance to finance the 2018-19 budget. The district lacked a comprehensive multiyear financial plan and a comprehensive multiyear financial plan.
Newark Valley Fire District – Board Oversight (Tioga County)
Auditors found control weaknesses in the community hall rental process. Documentation of compliance with the procurement policy was incomplete. Although monthly financial reports were accurate and reliable, the board did not perform an annual audit of the treasurer’s records for 2017 and 2018. The treasurer did not file required annual update documents with the Office of the State Comptroller.
School Districts
Brunswick Central School District – Online Banking (Rensselaer County)
The board did not adopt an online banking policy. Employees accessed nonbusiness websites although it is prohibited by district policy. In addition, district officials did not provide Information Technology (IT) security awareness training to users. Sensitive IT control weaknesses were communicated confidentially to officials.
East Islip Union Free School District – Financial Management (Suffolk County)
The district’s general fund balance increased by $12.9 million (141 percent) from 2015-16 through 2018-19, due to appropriations being overestimated by an average of $5.1 million (4.7 percent) per year. Over the last four fiscal years, the district reported unassigned fund balance equal to 4 percent of the ensuing year’s appropriations. However, when unused appropriated fund balance is added back, unassigned fund balance exceeds the statutory limit by up to 4.2 percentage points.
Fort Edward Union Free School District – Financial Condition (Washington County)
The district’s financial condition significantly declined due to a successful tax certiorari challenge. As a result, unrestricted fund balance as of June 30, 2019 totaled less than 1 percent of the next year’s appropriations. Based on the district’s outstanding tax certiorari liability of approximately $1.8 million, the district has an unfunded liability of approximately $873,000 as of July 31, 2019. District officials did not adopt a multiyear financial plan to address future unexpected revenue shortfalls or unanticipated expenditures.
Pawling Central School District – Budgeting Practices and Reserves (Dutchess and Putnam Counties)
District officials appropriated unrestricted fund balance as a financing source each year for the 2014-15 through 2018-19 budgets. Auditors found that only a fraction was used to finance operations, because the district generated operating surpluses in three of those years. After adding back the appropriated fund balance that was not used, the recalculated unrestricted fund balance for fiscal years 2014-15 through 2018-19 ranged from 7 percent to 12.15 percent of the ensuing year’s appropriations, exceeding the 4 percent statutory limit. Of the district’s six reserves, two were not used as intended and appear to be overfunded.
Shelter Island Union Free School District – Fund Balance (Suffolk County)
Surplus fund balance levels exceeded the statutory limit by at least 5.4 percentage points from fiscal years 2015-16 through 2018-19. Annual budgets overestimated appropriations by an average of $685,822 (6 percent) from 2015-16 through 2018-19. As a result, $1.7 million in appropriated fund balance was not used to fund operations during this time. In addition, the unemployment insurance reserve was overfunded and the employee benefit accrued liability reserve was not established by board resolution. Auditors also determined that district officials have not appropriately prepared or implemented corrective action plans (CAPs) to previous audits.
Rochester City School District – Budgeting and Multiyear Financial Planning (Monroe County)
The board and district officials neglected to use accurate estimates of appropriations to balance the 2018-19 budget, which contributed to an unplanned operating deficit of $27.4 million. Auditors also determined that the board failed to adopt a structurally balanced budget and did not follow its fund balance policy when it appropriated fund balance to finance the 2018-19 budget. The district lacked a comprehensive multiyear financial plan and a comprehensive multiyear financial plan.