VOORHEESVILLE — The school district is doing a number of things to make sure its finances are in check and that it is prepared for the Comptroller’s five-point plan, which is now state law.

At this Monday’s school board meeting, the board contracted with the New York State School Boards Association’s Advisory Solution for $7,500 to do a complete analysis of the district’s financial procedures and practices in all areas and to provide the board of education with a report to include recommendations for future practices.

This comes at the same time that the state is auditing Voorheesville, as part of its pilot program to complete audits of all public schools in the state over the next five years.
Also last month, independent auditors Washburn, Ellingwood, Sheeler, Thaisz & Pinsley submitted to the board its review of the district’s financial statements, which it found to be free of material misstatements. While there were no instances of noncompliance, the management letter did point out a few "opportunities for strengthening internal controls."

And, this week, the board decided to start advertising for an internal claims auditor, which according to state mandates has to be done by an individual who does not work in the district’s business office.

Comptroller Alan Hevesi developed his plan in the wake of fraud at a Long Island School district

State review

Board president Joseph Pofit said that Advisory Solutions is focusing on all types of personnel and their roles and responsibilities and how money is handled — all the processes and procedures of the business office. The analysis started a month ago and is scheduled to be completed in December, Pofit told the Enterprise yesterday.

While the state it doing its own review, the board wants an independent evaluation and validation, he said.

Jennifer Freeman of the State Comptroller’s Office told The Enterprise that the state’s staff is reviewing the financial records and meeting with individual business office employees at Voorheesville.

While the annual external audit, required by the state is simply a review of the financial statements to insure that the statements are represented fairly, the comptroller’s review is more comprehensive, Freeman said. It looks at operations in addition to financial conditions.

Sixteen of the state’s audits have been completed on Long Island, and now the comptroller is doing about 20 audits in upstate New York. Freeman said that one of the things the state is checking, is if there are proper separations of duties. For example, one person should open the mail and receive the check, another record that check, and a third deposit it, Freeman said.

Also the state is reviewing computer controls, the accounting information in computers. For example, if someone makes a change to an accounting record, does the computer program show who made the adjustments and when, Freeman said.

Freeman said she wanted to emphasize that Voorheesville was not picked to be a part of the pilot because it had done something wrong.

The state stopped doing rotational audits on all of New York’s school district 20 years ago at the time when the state began requiring external audits. Starting up again, the Comptroller wanted a variety of different schools to start with, including ones of different sizes, different budgets, and different geographic areas.

The state will first provide its report to Voorheesville, highlighting areas that need improvement, and then give the district the opportunity to respond, Freeman said. The final report that then becomes available to the public includes the state’s findings, but also Voorheesville’s responses to those, Freeman said.

Sometimes discrepancies are actually remedied before the final reports are released, she said, because of the dialogue that is happening now between the district’s employees and state auditors.

There is currently no time line for the state process, which started this summer. There are small teams of state auditors doing field work within the school’s business office, and another handful of auditors back at the comptroller’s office in Albany doing analysis, Freeman said.

Voorheesville’s assistant superintendent for business, Sarita Winchell, said that so far the process with the state has been very professional. It has opened the dialogue, Winchell said. She said it is always useful to have another set of eyes offer criticisms of the procedures. She welcomes things, like state-wide audits that increase public confidence and makes business offices state-wide more uniform, she said

External audit

This year, after using the same external auditor for 10 years, the district chose to change companies, after Hevesi suggested regularly rotating the external auditor that a district uses.
Voorheesville’s external auditor this year, Neil Lamere, said that he would rate Voorheesville’s financial condition "slightly above average" compared to other schools he audited. From a long-term standpoint, the district is going to be fine, he said, but there are short-term concerns like retirement and health-care benefits.
"These are tough times...tensions are high" in school auditing and financing across the state, Lamere said.

Voorheesville’s financial statements are fairly represented, he said.

In his management letter, Lamere noted a deficit in the school lunch program. (See related story.)

He also said that nonbusiness office cash receipts are not being deposited in a timely fashion. The receipts from parking, books, etc. are not handed in immediately.

Winchell said that she has sent out a memo to remind teachers and secretaries that they need to hand in their money and receipts as soon as they get it. Winchell gave the example, that sometimes teachers who are collecting money for a field trip, will hang on to all the money until they have a total, while they really should be handing in the money as they receive it.

The external audit also said that the extracurricular clubs’ financial management needs to be tidied up, such as disbursing orders not having all the required signatures, and not filling out all the paperwork for fund-raisers. Also, all clubs have to have officers, or they are ineligible to be an extracurricular activity.

Internal controls

Board member Richard Brackett suggested that the district should team up with the neighboring districts of Bethlehem and Guilderland and share an internal claims auditor.

Winchell responded that she believes the board is confused about the internal claims auditor’s roll, which is different than an internal auditor. They serve two different functions and require a different level of skill, she said.

An internal auditor looks at specific functions of operation and has to be a certified public accountant. The internal claims auditor merely certifies warrants, meaning they insure that the correct check amounts are being sent out. This position, under new state law, can no longer be a member of business-office staff.

School board member David Gibson was concerned about having to hire someone for a job that only takes a few hours, and not every day.

Winchell said she would never suggest sharing claims auditors with other districts, because she wants them to be readily available. She envisions and would like to have someone who is already working in the building, just in another department, to stop by the business office each day to see if any warrants need to be checked.