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Division of LocaL Government & schooL accountabiLity
o f f i c e o f t h e n e w y o r k s t a t e c o m p t r o L L e r
report of ExaminationPeriod Covered:
July 1, 2014 – January 13, 2016
2016M-104
South Orangetown Central School District
Claims Processing
thomas p. Dinapoli
Page
AUTHORITY LETTER 1
INTRODUCTION 2 Background 2 Objective 2 Scope and Methodology 2 CommentsofDistrictOfficials 3
CLAIMS PROCESSING 4
APPENDIX A ResponseFromDistrictOfficials 6APPENDIX B Audit Methodology and Standards 8 APPENDIX C How to Obtain Additional Copies of the Report 9 APPENDIX D LocalRegionalOfficeListing 10
Table of Contents
11Division of LocaL Government anD schooL accountabiLity
State of New YorkOffice of the State Comptroller
Division of Local Governmentand School Accountability June2016
DearSchoolDistrictOfficials:
AtoppriorityoftheOfficeoftheStateComptrolleristohelpschooldistrictofficialsmanagetheirdistrictsefficientlyandeffectivelyand,bysodoing,provideaccountabilityfor taxdollarsspent tosupportdistrictoperations.TheComptrolleroverseesthefiscalaffairsofdistrictsstatewide,aswellasdistricts’compliancewithrelevantstatutesandobservanceofgoodbusinesspractices.Thisfiscaloversight is accomplished, in part, throughour audits,which identify opportunities for improvingdistrict operations and Board of Education governance. Audits also can identify strategies to reduce district costs and to strengthen controls intended to safeguard district assets.
FollowingisareportofourauditoftheSouthOrangetownCentralSchoolDistrict,entitledClaimsProcessing.ThisauditwasconductedpursuanttoArticleV,Section1oftheStateConstitutionandtheStateComptroller’sauthorityassetforthinArticle3oftheNewYorkStateGeneralMunicipalLaw.
Thisaudit’sresultsareresourcesfordistrictofficialstouseineffectivelymanagingoperationsandinmeetingtheexpectationsoftheirconstituents.Ifyouhavequestionsaboutthisreport,pleasefeelfreetocontactthelocalregionalofficeforyourcounty,aslistedattheendofthisreport.
Respectfullysubmitted,
Office of the State ComptrollerDivision of Local Governmentand School Accountability
State of New YorkOffice of the State Comptroller
2 Office Of the New YOrk State cOmptrOller2
Background
Introduction
Objective
Scope andMethodology
The South Orangetown Central School District (District) is located in the Town of Orangetown in Rockland County. The District is governed bytheBoardofEducation(Board),whichiscomposedoffiveelectedmembers. The Board is responsible for the general management and control of the District’s financial and educational affairs. TheSuperintendentofSchoolsistheDistrict’schiefexecutiveofficerandisresponsible,alongwithotheradministrativestaff,fortheDistrict’sday-to-day management under the Board’s direction. The Deputy Superintendentoversees theDistrict’sbusinessoperations, assistedin these duties by the District Treasurer.
TheDistrictoperatesfourschoolswithapproximately3,170studentsand430 employees.TheDistrict’s budgeted appropriations for the2015-16fiscalyearareapproximately$86million,whicharefundedprimarilywithrealpropertytaxesandStateaid.
During our audit period, the District paid 5,090 claims totalingapproximately$52.8millionfromthegeneral,schoollunch,specialaid and capital funds. The Board has delegated its claims auditing responsibility to a claims auditor. The claims auditor reports directly to theBoardandisresponsibleforexamining,andallowingorrejecting,allaccounts,charges,claimsordemandsagainsttheDistrict.
Theobjectiveofourauditwastoexaminetheclaimsauditingprocess.Ourauditaddressedthefollowingrelatedquestion:
• Did the District ensure that claims were for appropriate purposes,adequatelysupported,auditedandapprovedpriortopaymentandinaccordancewithNewYorkStateEducationLaw (Education Law)?
We examined theDistrict’s claims auditing process for the periodJuly1,2014throughJanuary13,2016.
We conducted our audit in accordance with generally accepted governmentauditingstandards(GAGAS).Moreinformationonsuchstandards and the methodology used in performing this audit are includedinAppendixBofthisreport.Unlessotherwiseindicatedinthisreport,samplesfortestingwereselectedbasedonprofessionaljudgment,asitwasnottheintenttoprojecttheresultsontotheentirepopulation.Where applicable, information is presented concerningthe value and/or relevant population size and the sample selected for examination.
33Division of LocaL Government anD schooL accountabiLity
Comments ofDistrict Officials
TheresultsofouraudithavebeendiscussedwithDistrictofficials,andtheircomments,whichappearinAppendixA,havebeenconsideredinpreparingthisreport.Districtofficialsagreedwithourreport.
4 Office Of the New YOrk State cOmptrOller4
Claims Processing
An effective system for claims processing ensures that every claim against the District contains enough supporting documentation to determine whether the amounts claimed represent actual and necessary expenditures and whether the goods or services beingbilledforwereactuallyreceived.EducationLawrequirestheBoardto audit all claims before they are paid or to appoint a claims auditor toassumetheBoard’spowersanddutiestoexamineandapproveordisapprove claims. The claims auditor should review detailed receipts to determine whether the claims are properly itemized and supported andwhethertheDistrictreceivedthegoodsorservices.Withspecificexceptions,EducationLawrequiresallclaimstobeauditedbeforepayments can be made.
District officials have established effective procedures to ensureclaimsareadequatelydocumentedandsupported,areforlegitimateDistrictpurposesandareapprovedpriortopayment,inaccordancewith District policy and Education Law. The Board has delegated its claims auditing responsibility to a claims auditor. The Board adopted aclaimsauditpolicythatrequirestheclaimsauditortodetermineifeachclaimagainsttheDistrictisforavalidpurpose,theobligationwasincurredbyanauthorizedDistrictofficial, theitemsforwhichpayment is claimed were in fact received or services were rendered andtheobligationdoesnotexceedtheavailableappropriation.Thepolicy also requires the claims auditor to verify that the claim ismathematicallycorrect,doesnotincludepreviouslypaidchargesandagrees with the purchase order or contract upon which it is based.
Additionally, District officials have developed a checklist that theclaims auditor completes with each warrant to verify that all the procedures listed in the District’s policy were followed. The claims auditor is required to provide these completed checklists with theapproved warrants to the Board so it can approve these reports each month.
We reviewed100 claims1 totaling approximately$1.2millionpaidduring our audit period to determine whether these claims contained evidence that the claims auditor audited and approved them before payment. We also determined whether the claims were mathematically accurate,adequatelysupportedandforlegitimateDistrictpurposes.Except for minor discrepancies, which we discussed with Districtofficials,alltheclaimswereviewedwereauditedandapprovedbythe claims auditor prior to payment, weremathematically correct,
1 SeeAppendixBformoreinformationonoursamplingmethodology.
55Division of LocaL Government anD schooL accountabiLity
weresupportedbyadequatedocumentationandwereforlegitimateDistrict purposes.
WecommendDistrictofficialsforestablishingeffectiveproceduresfor processing claims against the District. Establishing and adhering to effective claims auditing procedures decreases the risk that errors or irregularities with processing and paying claims may occur and go undetected.
6 Office Of the New YOrk State cOmptrOller6
APPENDIX A
RESPONSE FROM DISTRICT OFFICIALS
TheDistrictofficials’responsetothisauditcanbefoundonthefollowingpage.
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8 Office Of the New YOrk State cOmptrOller8
APPENDIX B
AUDIT METHODOLOGY AND STANDARDS
Toachieveourauditobjectiveandobtainvalidevidence,weperformedthefollowingprocedures:
• WereviewedBoardminutesfromthe2014-15and2015-16fiscalyearstoverifythattheBoardappointedaclaimsauditorinaccordancewithstatutoryrequirements.
• We interviewed District officials and the claims auditor and reviewed claims processingdocuments and District policies to gain an understanding of the District’s claims auditing process.
• Usingacomputerizedspreadsheetfunction,weselectedarandomtestsampleof100claims.We reviewed supporting documentation for the selected claims to determine whether payments wereforgoodsandservicesorderedandreceived,forproperDistrictpurposes,auditedandapprovedbytheappropriatepersonnelandsufficientlysupportedandproperlyrecorded.
WeconductedthisperformanceauditinaccordancewithGAGAS.Thosestandardsrequirethatweplanandperform theaudit toobtainsufficient,appropriateevidence toprovidea reasonablebasisforourfindingsandconclusionsbasedonourauditobjective.Webelievethattheevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjective.
99Division of LocaL Government anD schooL accountabiLity
APPENDIX C
HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT
OfficeoftheStateComptrollerPublicInformationOffice110StateStreet,15thFloorAlbany,NewYork12236(518)474-4015http://www.osc.state.ny.us/localgov/
Toobtaincopiesofthisreport,writeorvisitourwebpage:
10 Office Of the New YOrk State cOmptrOller10
APPENDIX DOFFICE OF THE STATE COMPTROLLER
DIVISION OF LOCAL GOVERNMENTAND SCHOOL ACCOUNTABILITYAndrewA.SanFilippo,ExecutiveDeputyComptroller
GabrielF.Deyo,DeputyComptrollerTraceyHitchenBoyd,AssistantComptroller
LOCAL REGIONAL OFFICE LISTING
BINGHAMTON REGIONAL OFFICEH.ToddEames,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Suite170244 Hawley StreetBinghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313Email:[email protected]
Serving:Broome,Chenango,Cortland,Delaware,Otsego,Schoharie,Sullivan,Tioga,TompkinsCounties
BUFFALO REGIONAL OFFICEJeffreyD.Mazula,ChiefExaminerOfficeoftheStateComptroller295MainStreet,Suite1032Buffalo,NewYork14203-2510(716)847-3647Fax(716)847-3643Email:[email protected]
Serving:Allegany,Cattaraugus,Chautauqua,Erie,Genesee,Niagara,Orleans,WyomingCounties
GLENS FALLS REGIONAL OFFICEJeffreyP.Leonard,ChiefExaminerOfficeoftheStateComptrollerOne Broad Street PlazaGlensFalls,NewYork12801-4396(518)793-0057Fax(518)793-5797Email:[email protected]
Serving:Albany,Clinton,Essex,Franklin,Fulton,Hamilton,Montgomery,Rensselaer,Saratoga,Schenectady,Warren,WashingtonCounties
HAUPPAUGE REGIONAL OFFICEIraMcCracken,ChiefExaminerOfficeoftheStateComptrollerNYSOfficeBuilding,Room3A10250VeteransMemorialHighwayHauppauge,NewYork11788-5533(631)952-6534Fax(631)952-6530Email:[email protected]
Serving:NassauandSuffolkCounties
NEWBURGH REGIONAL OFFICETennehBlamah,ChiefExaminerOfficeoftheStateComptroller33AirportCenterDrive,Suite103NewWindsor,NewYork12553-4725(845)567-0858Fax(845)567-0080Email:[email protected]
Serving:Columbia,Dutchess,Greene,Orange,Putnam,Rockland,Ulster,WestchesterCounties
ROCHESTER REGIONAL OFFICEEdwardV.Grant,Jr.,ChiefExaminerOfficeoftheStateComptrollerThe Powers Building16WestMainStreet,Suite522Rochester,NewYork14614-1608(585)454-2460Fax(585)454-3545Email:[email protected]
Serving:Cayuga,Chemung,Livingston,Monroe,Ontario,Schuyler,Seneca,Steuben,Wayne,YatesCounties
SYRACUSE REGIONAL OFFICERebeccaWilcox,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Room409333E.WashingtonStreetSyracuse,NewYork13202-1428(315)428-4192Fax(315)426-2119Email:[email protected]
Serving:Herkimer,Jefferson,Lewis,Madison,Oneida,Onondaga,Oswego,St.LawrenceCounties
STATEWIDE AUDITSAnnC.Singer,ChiefExaminerStateOfficeBuilding,Suite170244 Hawley Street Binghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313
