In audits released Wednesday, state Comptroller Thomas DiNapoli found the Hampton Bays school district practicing "adequate controls" over purchasing claims, but said a Roosevelt charter school failed to adopt "realistic budgets."
The auditors analyzed a portion of each of the institutions' finances and operations. Officials from both the district and the school said they had complied with the recommendations in a response to the audit.
They looked at the Roosevelt Children's Academy Charter School's overall financial operations over a period ranging from July 1, 2011 to January 31, 2013, and Hampton Bays district's claims processing from July 1, 2012 to Aug. 31, 2013.
"School district officials have established adequate controls over the claims processing function that ensure claims are audited in a timely manner and are properly supported," read the report. "However, the purchasing agent did not always formally approve all purchases prior to ordering goods and services."
Auditors reviewed 25 claims, totaling $154,909, a portion of the $17,972,830 in claims made over the period studied. While the majority of transactions were legitimate, "purchase orders for 10 of the 25 claims, totaling $50,859, were confirming purchase orders which were prepared after the invoices were received from the vendor."
Auditors recommended that district's purchasing agent "ensure that purchase orders are prepared and approved in advance of any purchase."
In the Roosevelt charter school, which generated $8.2 million in operating expenses during the 2011-2012 year, "The Board did not adopt realistic budgets or routinely monitor financial operations," the audit said, noting that charter schools are subject to fewer legal operational requirements than traditional public schools and are mainly bound by bylaws, charter agreement and their own financial management plans.
"School officials created an expenditure code entitled 'building fund' and budgeted $4.8 million in the 2010-11 fiscal year, $5.2 million in 2011-12 and $2.6 million in 2012-13, even though school officials had no expectation of any outflow of cash for such expenses," the audit said. "This created the appearance that there would be no net income for those years. As a result, net income was understated in each of those three years."
It also said that "The School also paid for Board member expenditures that were not authorized by the School's bylaws or policy. Of $31,630 in Board expenditures, $26,444 was not authorized. These expenditures, which included undocumented credit card charges as well as direct reimbursements, were for food, transportation to attend regular Board meetings, lodging and charges for the Chairman's cell phone."
Auditors recommended that school officials take "corrective action" and report their progress to DiNapoli's office within 90 days.
In a letter from chief financial officer Philip Leconte and superintendent Ron Boykins, the Roosevelt school officials said they had addressed each of the audit's recommendations for the 2014 fiscal year. "We have worked diligently to correct the practices and issues cited in the report. We intend to remain in compliance with all the rules and regulations."
Lars Clemenson, superintendent of Hampton Bays schools, responded to the report in a Dec. 18 letter with appreciation for the auditors: "We have taken actions based on their report and we continue to improve our fiscal and operational controls."
The measures and controls include:
Ensuring that "appropriations are incorporated in the budget only when there is an anticipated outflow of cash for goods or services," requesting financial reports from the director of finance to monitor financial operations and develop realistic budgets and tighten oversight of reimbursement of expenditures practices and credit card use.