New York State Comptroller Thomas P. DiNapoli announced the following audits were issued during the week ending June 26, 2020. To access the full report click on the data highlighted in color.
State Department and Agencies
New York City Department of Housing Preservation and Development, Purchasing Practices at the Linden Plaza Mitchell-Lama Housing Development (2019-F-50) (Follow-Up) An audit issued in September 2018 found that New York City’s rules were limited in scope and did not encourage Linden Plaza officials to make purchases at competitive prices and none of the $10.7 million in purchases made by Linden Plaza were subject to competitive bidding. With limited exception, there was no documentation indicating that Linden Plaza had conducted price analyses or taken other steps to determine the reasonableness of the prices related to sampled non-contract purchases. In a follow-up, auditors found that HPD officials made limited progress in addressing the problems identified in the initial audit.
State Education Department (SED): Oversight of Smart Schools Bond Act Funds (2019-S-13) It takes SED nearly 300 days on average to approve school district projects funded through the Smart Schools Bond Act, leading to project delays and increased costs. While SED has taken steps to review school districts’ Smart School spending plans, it has not done enough to ensure the money is going to appropriate projects that meet guidelines to get funding.
State Education Department: Through Ages Inc. – Compliance With the Reimbursable Cost Manual (2019-S-56) Through Ages is a New York City-based for-profit organization authorized by SED to provide preschool Special Education Itinerant Teacher (SEIT) services to children with disabilities who are between the ages of three and five years. For the three fiscal years ended June 30, 2015, auditors identified $137,377 in reported costs that did not comply with the requirements for reimbursement and recommended those costs be disallowed.
State University of New York Upstate Medical University (Upstate): User Access Controls Over Selected System Applications (2019-S-34) Upstate’s access controls are not sufficient to prevent unnecessary or inappropriate access to various applications. Inappropriate access can lead to intentional or accidental modification, destruction, or disclosure of clinical, educational, and research – and otherwise confidential – information.
Commack Union Free School District – Information Technology (IT) Assets Inventory (Suffolk County) At the time of initial visits to nine district buildings, auditors were unable to locate 146 of 475 IT assets tested (31 percent). It took between 11 and 55 days from the initial visits for officials to locate 80 additional IT assets. Because of inaccurate inventory records, district officials were unable to locate the remaining 66 IT assets (14 percent).
The board overestimated appropriations from 2016-17 through 2018-19, resulting in over $5 million in appropriated fund balance not being used to finance operations. After adding back unused appropriated fund balances each year, the district’s recalculated surplus fund balance exceeded the statutory 4 percent limit each of the last three fiscal years ranging from 12.1 percent to 16.7 percent.
Rochester City School District – 2020-21 Budget Review (Monroe County) Auditors commend the superintendent and board for the actions they have taken to improve the accuracy of budget projections in the 2020-21 budget and restore the district’s overall financial condition, especially in light of the challenges caused by unexpected revenue reductions due to the economic fallout resulting from the COVID-19 pandemic. Auditors found revenue projections to be substantially accurate. However, appropriations for charter school tuition are underbudgeted by approximately $1.5 million, and salary and substitute costs will have to be closely monitored. Additionally, the budget remains structurally imbalanced because district officials are relying on the city council to approve a waiver to the city charter for the use of $10 million for operation expenditures rather than capital purposes. Therefore, absent recurring additional revenue, appropriation reductions will be necessary for future budgets to be structurally balanced.
Urban Choice Charter School – Information Technology (Monroe County) A former employee’s user account was used to process 510 financial transactions after her resignation. In addition, school officials did not adopt IT policies or a disaster recovery plan. IT users were not provided with IT security awareness training.
Municipalities and Political Subdivisions
Berkshire Fire District – District Operations (Tioga County) District officials did not comply with their procurement policy when procuring assets. Auditors determined the district could have saved $3,800 if it had purchased propane at state contract prices. Auditors also determined the board did not establish adequate controls to safeguard fixed assets. In addition, the treasurer did not submit required annual financial reports to the State Comptroller’s Office.
Town of North Elba – Cash Collections (Essex County) Auditors determined the town clerk did not deposit collections totaling $100,496 in a timely manner. In addition, the golf director did not provide adequate oversight of golf course collections. Auditors also found the park manager did not ensure employees remitted collections at the end of activities.
Frankfort Hill Volunteer Fire Company – Financial Activities (Herkimer County) Auditors determined the bylaws provided limited guidance on financial responsibilities and the board did not establish any supplemental financial policies or procedures. The treasurer did not maintain adequate accounting records and prepare monthly bank reconciliations. Most claims were paid without membership approval, as required by the bylaws and 47 claims totaling $34,437 were paid without proper supporting documentation. In addition, company officials did not ensure that cash receipts were adequately documented. Of 125 deposits totaling $318,091 made during the audit period, 43 deposits totaling $16,023 were either supported by only a deposit receipt or had no supporting documentation.
Village of Hilton – Financial Management (Monroe County) Auditors determined the board adopted budgets with unrealistic estimates, which resulted in operating surpluses and unused appropriated fund balances in the general, water and sewer funds. In addition, the board maintained unreasonable levels of fund balance in these funds that ranged between 29 percent and 128 percent of subsequent years’ budget appropriations. Also the board did not adopt a multiyear financial and capital plan or a detailed reserve plan that included the need and optimal funding level for each reserve.
Town of Mooers – Highway Asset Accountability (Clinton County) The highway superintendent did not maintain a complete and up-to-date inventory of department assets. Auditors determined department assets were not properly disposed of. In addition, town officials did not adequately monitor fuel use, which resulted in 9,216 gallons of unrecorded fuel used at the highway facility, valued at $20,576. Also, the Mooers Volunteer Fire Department was not billed for 2,413 gallons of recorded fuel used, valued at $4,841.
Town of Mooers – Cash Management (Clinton County) The board did not develop and manage a comprehensive investment program to ensure interest earnings were maximized. Auditors determined that had the supervisor invested available funds in a financial institution with higher available interest rates, revenue could have increased by approximately $31,300 during the audit period.
Town of Mooers – Procurement (Clinton County) The board did not ensure that officials and employees procured goods and services in accordance with the procurement policy. Of the nine purchase contracts totaling approximately $1.3 million that were entered into during the audit period and exceeded the competitive bidding threshold, one purchase contract totaling $61,766 was not procured in accordance with statutory requirements. In addition, of the 15 purchase and public works contracts totaling $150,939 that did not exceed the competitive bidding threshold, 11 contracts (73 percent) totaling $105,010 were not procured in accordance with the procurement policy.
Town of Patterson – Information Technology (IT) (Putnam County) The board did not adopt adequate IT policies or a disaster recovery plan. Auditors found town officials did not have a service level agreement with the IT consultant. In addition, town officials did not provide IT security awareness training to staff. Sensitive IT control weaknesses were communicated confidentially to officials.
Village of Port Chester – Dual Employment (Westchester County) Village officials did not establish adequate time and attendance controls. Auditors could not confirm the three employees identified worked all the hours they were paid for. In addition, village officials did not ensure that employees’ days and hours worked were adequately documented, certified by the employees or verified by a supervisor. Leave usage paid, totaling $3,979, was not deducted from leave accruals, and 536 hours of leave was taken without the use of time off request forms, as required.
Town of Rushford – Procurement (Allegany County) The board and town officials could improve the town’s procurement policy and purchasing procedures. Auditors determined that out of 59 payments totaling $632,000, two purchases totaling $175,000 were not competitively bid as required. They also determined that out of 55 purchases totaling $189,000, 17 purchases totaling $56,000 did not have the required request for proposal or the required number of quotes prior to being made. The town’s procurement policy does not require the solicitation of competition, such as written proposals or quotes, for the procurement of professional services.
Town of Westerlo – Information Technology (Albany County) Town officials did not adequately safeguard IT resources. In addition, town officials have not established appropriate policies and procedures to safeguard IT resources. Auditors also found town officials have not implemented strong access controls over user accounts and have not disabled unnecessary accounts. They also have not formalized a contract describing specific services to be provided by the town’s third-party IT vendor.
West Seneca Fire District #4 – Procurement (Erie County) The district’s procurement policy could be improved and the board of fire commissioners should ensure compliance with the policy. District officials were unable to provide written quotes for 42 purchases totaling $149,854 to demonstrate competitive pricing.
City of Yonkers – Budget Review (Westchester County) The 2020-21 budget relies on nonrecurring revenue of $67.1 million, such as fund balance, one-time state funding and sale of property, to balance its budget. Firefighting overtime costs could potentially be over budget by as much as $4 million and police overtime costs could potentially be over budget by $2.3 million based on the 2019-20 fiscal year overtime costs. The city plans to borrow up to $15 million for tax certiorari settlements in the 2020-21 fiscal year. Over the last 10 years, the city’s outstanding debt has grown 22.4 percent and the city’s debt service payments have risen 25.9 percent. The city will need $82.2 million to service its debt obligations during 2020-21. With the 2020-21 budget, the city will have exhausted 79.91 percent of its taxing authority and the city’s ability to increase property taxes may be limited in future years if property values do not increase.
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