Governor Signs Laws Requiring Fiscal Accountability for All School Districts

July 27, 2005

Governor Pataki is joined by Assemblymember Lavine as well as members of the Assembly and Senate to sign a package of legislation into law that will strengthen oversight and increase accountability of school district finances, while protecting property taxpayers from fraud and abuse.

Assemblymember Charles Lavine (D-North Shore/Glen Cove) announced the governor has signed into law two measures he sponsored to increase the oversight of school districts statewide by requiring more intensive audits following financial scandals at several Long Island school districts.

"Pilfering taxpayer dollars earmarked to educate our children simply cannot be tolerated," Lavine said. "By requiring more thorough audits, the laws will help put an end to these crimes. By making our school districts more accountable, we can start to restore taxpayer confidence."

The first law will:

  • require 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;
  • set 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
  • require any findings of fraud or abuse uncovered by the OSC be reported to the Commissioner of Education, charter entity, and state and federal prosecutors.

Assemblymember Lavine noted the law would release $2.9 million for the Comptroller’s office to hire additional auditing staff money that was approved in this year’s state budget. The law 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 on all the school audits completed that year.

The governor also signed a second measure that will further increase the oversight of schools throughout the state. The law:

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

"The increased oversight provided by these laws should dramatically reduce the incidence of fraud in our schools," Lavine said. "With these laws in place, accountability and trust will be restored to our school systems."