Statewide audit of 733 school districts, BOCES wraps up
An audit of all 733 school districts found many instances of wasteful spending. Credit: File / Bill Zimmerman
Six years after an outcry over an $11.2-million embezzlement of public funds in Roslyn, the state comptroller's office has wrapped up a monumental auditing of all 733 school districts and BOCES statewide that found many instances of lax controls and wasteful spending.
The effort was capped Thursday with release of a report on cyber thieves who made off with more than $100,000 in Lindenhurst because of poor security.
At a Hauppauge news conference, Comptroller Thomas P. DiNapoli vowed his office would continue its watchdog role, but with fewer audits focused more intently on preventing wasteful spending. He added that auditors also would look for positive examples of schools that manage to save money in tough economic times.
"Educating our children - and stretching every taxpayer dollar to do it - is the prime objective for our schools," said DiNapoli, 55, who began his public career as a Mineola school board trustee at age 18.
DiNapoli's aides contend the $7-million-a-year auditing effort has proved highly successful in forcing schools to tighten financial controls and train board trustees to exercise fiscal oversight. One recent review of operations in 15 school districts, including five on Long Island, concluded that those districts had implemented 82 percent of state auditors' recommendations for improvement.
Others are more skeptical. In Jericho, one of the first districts audited, local administrators acknowledge state recommendations were helpful in keeping closer track of fuel usage in district vehicles. But some question whether resulting savings come anywhere close to matching the cost of extra auditing.
"How much taxpayer money has been recovered with the expenditure of $7 [million] to $9 million a year?" asked Henry Grishman, Jericho schools superintendent and president of the Nassau Council of School Superintendents.
DiNapoli aides provided no overall answer Thursday, though they noted a Middle Country audit resulted in recovery of $42,500 from three teachers who were overpaid retirement incentives. His office plans to lay out its accomplishments and recommendations for improved school management in Albany next week.
The statewide monitoring effort was launched by a new state law in 2005, following the Roslyn revelations. Since then, one audit after another has stressed some common themes:
Many districts are accumulating excessive cash reserves, and should spend down those reserves to curb taxes.
Districts are giving too many employees access to financial accounts and other resources, and need to tighten controls.
Districts should require better documentation of employee expenses and eligibility for vacation and sick leave.
DiNapoli, appointed in 2007, will seek election in November. His hammering away at districts' reserve funds has proved a hit with taxpayer groups.
"He's been aware of the hundreds of millions of dollars - maybe billions - that are sitting in school districts' accounts without educating a single child," said Fred Gorman, a regional taxpayer advocate and Nesconset/Sachem Civic Association president. "The guy has really done a good job."
Thursday, DiNapoli raised another issue: the need for improved cybersecurity. An audit released at the news conference reported six unauthorized wire transfers from July 2-5, 2007, from a bank account held by the Lindenhurst school district. Transfers totaled $601,577.
Auditors found the bank was able to block $496,590 in transfers and retrieve the money, but that $104,987 was lost. District officials said the missing money was reimbursed by an insurance company.
"We were very fortunate," said Richard Nathan, the superintendent of Lindenhurst schools since July, who attended Thursday's conference and noted adequate controls had been put in place.
The FBI investigated the Lindenhurst thefts but wasn't able to find the culprits, state officials said.
Findings: Two school board trustees failed to disclose they ran nonprofit Wantagh Foundation for Educational Excellence, which received more than $500,000 from the district over two years. Allowed staffers to carry over year-to-year more sick days than allowed under labor contracts.
Action: Only current school board trustee with a Wantagh Foundation position gave it up this year. Another no longer on the board. Sick day policy now conforms to labor contracts.
Findings: District held $14 million in excess reserves.
Action: District officials said yesterday their "reserves were carefully built and designed to avoid dramatic tax rate increases that might otherwise occur in the absence of available resources . . ." Officials also noted Bay Shore has reduced its unappropriated, unreserved fund balance to below 1 percent - 4 percent being the maximum allowed.
Comsewogue
Findings: A former school superintendent collected unusual $739,000 "golden parachute" when he retired in 2006, boosting administrator's annual pension nearly $100,000 beyond his pay while working. Contract allowed Richard Brande to cash in unused vacation and sick days at daily rates of $1,304 and $2,784, respectively, when he retired.
Action: School officials said in response to 2009 audit that district no longer grants contract terms as generous as those given Brande.
Findings: Repeated annual operating deficits, including $2.8 million in 2005-06 and $6 million in 06-07. Routine use of cash reserves to pay operating expenses. More than $7 million in cost overruns in 2006-07.
Action: Installed new acting assistant superintendent for business. Requires three managers to sign off on monthly spending reports.
Findings: Two school board trustees failed to complete financial oversight training required by state law. District overpaid for life insurance for five top administrators.
Action: District officials said Thursday most state auditors' recommendations were put in place by district prior to auditors' arrival. Recommendations not already in place were corrected and in place prior to auditors' departure.
Findings: Paid some retiring workers for more unused leave time and granted others more holidays than owed under contract. Used 27 percent more fuel than employees reported.
Action: Overpayments and holidays - longtime district policy - were incorporated into labor contracts. Workers using district gasoline must keep records down to 1/10th of a gallon.
Findings: School board president and a former board member violated law and district's ethics code by failing to publicly disclose their spouses had taken jobs with district. Assistant superintendent for business received payment in lieu of health insurance, which her original contract did not stipulate could be done.
Action: District said it was no secret to those in audience that two board members' wives were being hired by district. However, the fact it was not recorded in minutes has been corrected since receiving auditors' report. Now, when a board member abstains from voting on a personnel matter, explanation for abstention - such as person is a spouse - is recorded in minutes.
Board move to give payment to assistant superintendent for business in lieu of health insurance had been approved previously. Since audit, district determined new contracts would be written if and when employees receive change from original agreements.
Sarra Sounds Off, Ep. 15: LI's top basketball players On the latest episode of "Sarra Sounds Off," Newsday's Gregg Sarra and Matt Lindsay take a look top boys and girls basketball players on Long Island.
Sarra Sounds Off, Ep. 15: LI's top basketball players On the latest episode of "Sarra Sounds Off," Newsday's Gregg Sarra and Matt Lindsay take a look top boys and girls basketball players on Long Island.
