The Office of the New York State Comptroller has released a series of audits examining the financial and operational practices of various local governments and school districts across the state. The audits highlighted issues related to fund balance management, payroll procedures, procurement practices, claims auditing, and compliance with state regulations.
In one district, auditors found that board members and officials did not properly manage the district’s fund balance. The board regularly overestimated budget appropriations by an average of $1.3 million per year, resulting in a cumulative overestimation of about $6.4 million. Most of this overestimation was for special education instruction. From fiscal years 2019-20 through 2022-23, reported surplus fund balances ranged from 10 to 15% of the following year’s budget—exceeding the statutory limit by up to $1.8 million. Despite appropriating $5.5 million in surplus fund balance over five years, only $350,000 was used due to operating surpluses in four out of five years. When unused appropriated funds are included in calculations, actual surplus fund balances ranged from 12 to 23%—surpassing legal limits by as much as 19 percentage points. At the end of fiscal year 2023-24, the recalculated surplus exceeded the limit by nearly $1.3 million. The board also raised taxes by about $318,000 each year during this period despite having excess funds.
Another audit revealed that officials failed to ensure payroll payments for tutoring, class coverage, chaperoning, and sports scorekeeping were accurate or supported by proper documentation. Time sheets for thirteen employees lacked sufficient support for payments totaling $100,103; auditors questioned $14,190 paid for events with discrepancies such as overlapping times or non-existent games. There was no written payroll policy outlining expectations or processes for these activities.
A review of BOCES operations found that while officials properly claimed $3.8 million in state aid for administrative costs and $39.3 million for approved services—and reached out to correct an error—they improperly included certain rental revenues when claiming facility rental aid without deducting portions not paid by component districts. This led all twenty-three districts to receive nearly $2 million more than they were entitled to collectively; two component districts missed out on nearly $30,000 owed because payment reconciliations were incomplete.
Procurement practices came under scrutiny as one board did not seek competitive bids when purchasing a ladder truck valued at $1.9 million or maintain adequate records justifying exceptions to bidding requirements. Six purchases totaling over $41,000 lacked required quotes; another professional service contract worth over $19,000 had no request for proposals as mandated by policy; and one trustee failed to disclose an interest in a property purchase from a fire department.
Auditors also noted failures in claim auditing processes: seventy-nine disbursements totaling almost a quarter-million dollars were paid without proper board knowledge or inclusion on audited lists; sixteen disbursements had mismatched amounts compared with check images; thirty-three others lacked enough detail for effective review.
Monitoring deficiencies extended to Length of Service Award Programs (LOSAP), where boards did not ensure annual audits per state law or document procurement processes for investment management services even as asset values declined and contributions increased.
Several school districts did not fully comply with laws requiring testing and remediation of lead levels in potable water outlets: some outlets went untested or unaccounted for due to missing sampling plans or remedial action documentation; reporting obligations were unmet regarding test results shared with health departments or stakeholders.
Follow-up reviews measured progress since prior audits at Greenwood Lake Union Free School District and Port Jervis City School District concerning procurement procedures and financial condition management respectively. Greenwood Lake implemented all nine recommendations made previously regarding procurement and claims processing while Port Jervis made partial progress on six recommendations aimed at improving financial oversight—fully implementing one recommendation while three remain outstanding.
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