Assembly Sends School Audit Bills
To Governor For Consideration

Silver, Hevesi, DiNapoli
Urge Pataki To Sign Measures Requiring Audits For All Schools

Assembly Speaker Sheldon Silver today announced that the Assembly has sent legislation increasing the oversight of statewide local school districts to the governor for his approval. The two bills seek to improve fiscal practices in school districts throughout the state.

"Cases of school district misconduct have made it evident that significant reforms are urgently needed," said Silver. "Pilfering taxpayer dollars earmarked to educate our children simply cannot be tolerated. The oversight provided by state Comptroller Alan Hevesi with this legislation will make our school districts more accountable, begin to restore taxpayer confidence and help put an end to these crimes. I strongly urge the governor to sign these bills in order to safeguard against future abuses."

"When no one is watching, there is always the risk of mismanagement and even corruption, which unfortunately took place in some schools districts. This legislation is about preventing corruption and restoring the public's confidence. It is also about giving every school district the oversight tools to ensure that taxpayers' money is spent effectively. The overall goal is to ensure that schools can use all of their limited assets to focus on providing the best possible education to all of our children," said Hevesi. "I would like to thank our partners in the education community who helped us create a plan that will create effective oversight without adding expensive new burdens on already hard-pressed schools. These bills would not have been passed by both houses without the leadership of Speaker Silver and Assemblymember Tom DiNapoli in the Assembly and Majority Leader Bruno and Senators Steve Saland and Carl Marcellino in the Senate."

"These bills, which enjoy wide support in the educational community and from the accounting profession, strengthen school district financial oversight. Together with additional auditing by the comptroller, it provides a comprehensive approach to ensure accountability and restore public confidence in school district financial operations," said DiNapoli (D-Great Neck), who sponsored the legislation in the Assembly.

Silver explained that the governor now has 10 days to approve or veto the bills.

Provisions of the first measure (A.6761-B) include:

• a requirment that every school district, board of cooperative educational services (BOCES) and charter school be audited by the Office of the State Comptroller (OSC) at least once by March 31, 2010 - after that date, schools will be audited based on an OSC audit plan and risk assessment process;
• the establishment of minimum criteria for the scope of these audits, including assessment of current financial practices, examination and evaluation of financial practices and determination of the adequacy of internal controls; and
• requiring any findings of fraud or abuse uncovered by the OSC be reported to the Commissioner of Education, charter entity and state and federal prosecutors.

Silver also noted the bill would release $2.9 million for the comptroller's office to hire additional auditing staff - money that was approved in this year's on-time state budget.

The measure would also require schools to make the final OSC audit report available to the public and calls for an end-of-year report from the OSC to the governor and Legislature on all of the school audits completed that year.

The second bill (A.6082) would further increase the oversight of schools throughout the state. The bill:

• requires school board members to be trained on their financial oversight responsibilities;
• mandates that school districts and BOCES establish an internal audit function;
• requires audit committees in school districts;
• mandates that schools districts select an external auditor through a competitive request for proposals (RFP) process;
• establishes a five-year limitation on contracts between a school district and the external auditor; and
• improves annual external audits by requiring direct school board involvement.