Oceanside school officials were sloppy in their oversight of $2 million in community services ranging from prekindergarten classes to adult education, according to a new state audit report that warns the district could be leaving itself open to financial abuses.

For example, state auditors checked fee payments for a 2008 summer recreation program at one of the district's schools, and found receipts for only 249 of the 432 children registered.

Auditors also reported that the district had collected $73,965 in fees for after-school care of students in September and October of the same year, but could only show that $53,602 of that money had ever been deposited in a bank.

The report, released Tuesday by the state comptroller's office, finds no evidence of outright theft. But it warns that failure to provide proper oversight "increases the risk that fraud, professional misconduct, and/or errors or irregularities may occur and remain undetected."

Stung by the findings, Oceanside Superintendent Herb Brown objected in a response letter to the state report's wording that he described as "inflammatory and exaggerated." The letter is addressed to Jeffrey Leonard, a chief examiner in the comptroller's office.

Brown's letter acknowledged the need for tighter financial controls. But the letter also contended that the district's accounting was generally strong, and that the community programs criticized constituted only about 1 percent of school operations.

advertisement | advertise on newsday

In a separate statement, Louis Frontario, the district's assistant superintendent for business, said the office running community programs had expanded in recent years and "has now outgrown the accounting procedures that were initially put in place."

The state report also found Oceanside was careless in the way it paid private contractors and tracked employees' use of district-issued credit cards. Such criticisms are a frequent theme in reports generated by the comptroller's office, which is engaged in an effort to audit every district in the state by March.

In Oceanside, for example, auditors checked $69,093 paid to a consultant in 2007-08 to run a nature-study center. The consultant was to be paid $400 per day. However, auditors found that the district wound up paying on an hourly basis, resulting in an overpayment of $2,120.

Auditors also checked Oceanside employees' use of 36 district-issued credit cards to purchase $60,000 in fuel. Auditors found numerous instances in which card holders submitted handwritten slips as proof of purchases, rather than original receipts as required. Auditors also reported frequent failures to record required odometer readings, which would have allowed the district to determine whether fuel purchases and mileage were reasonable.