State auditors have released reviews of financial practices of two Suffolk school districts, concluding that Harborfields and West Islip had no improper transactions but recommending each district tighten procedures to ensure accountability and reduce risk.
State Comptroller Thomas P. DiNapoli’s office reviewed payroll records dated July 1, 2014 to Aug. 31, 2015 for West Islip and claims for goods and services generated between July 1, 2014 and Oct. 31, 2015 for Harborfields.
“The Board developed an adequate process to ensure that claims were accurate, valid, properly supported and for legitimate District purposes,” the auditors said of Harborfields officials in their 13-page report. “However, the claims auditor’s practice is to verify the vouchers or invoices against the purchase orders only.”
Specifically, the auditors said during the time period studied, the district processed $36.5 million in general fund claims. And they examined 20 claims totaling $251,773, asking whether “the claims were for legitimate District purposes; whether the claims contained price quotes, bids or applicable contracts; and whether the prices charged agreed with quotes, bids or applicable contracts.”
Auditors found that 17 of the claims totaling $217,765 “did not contain the applicable quotes, bids or contracts” so a claims auditor could not be sure that prices charged matched quotes bids or contracts, an oversight that “increases the risk that the District’s funds were not spent efficiently and that purchases made did not comply with ... requirements for competitive purchasing.”
They recommended Harborfields claims auditors verify vouchers and invoices against quotes, bids and contracts, in addition to purchase orders.
Harborfields Superintendent Diana Todaro said in response to the audit that the district was modifying its practices to match the recommendations.
West Islip officials also accepted the recommendations for improving payroll practices in the comptroller’s report, which found that “payroll clerks are performing incompatible duties related to payroll processing,” and that “District officials are not sufficiently monitoring or reviewing their work.”
Auditors concluded payroll duties must be better segregated, “to ensure that one individual does not control all phases of a payroll transaction.”
Payroll documents for the district’s 1,150 employees show salaries amounted to about $65 million, just over half of the district’s $117.8 million budget.
Examiners studied 40 payroll disbursements totaling $114,124 and concluded the officers in charge of the process labored under too little oversight.
“Two payroll clerks are responsible for adding new employees into the payroll system, entering payroll changes, collecting timesheets, entering hours worked and printing and distributing payroll checks for all District employees,” the auditors wrote. “All of these duties are performed with minimal management oversight.”
No improprieties were found in the audit, which also established that all of the disbursements were supported by timesheets, the report said. The danger, the review added, is that “the District has an increased risk that errors or irregularities could occur and remain undetected.”
Auditors recommended that the district appoint someone to certify payrolls before checks are distributed, that it “segregate payroll-processing duties so that one individual does not control all aspects of payroll transactions and that it “routinely generate and review payroll change reports to promptly identify, investigate and resolve any payroll discrepancies.”
West Islip Superintendent Bernadette M. Burns said the district was pleased the audit did not reveal any discrepancies and it accepted the comptroller’s recommendations to provide increased oversight “to avoid any risk of errors or irregularities that could occur and remain undetected.”