Report of Regents Audits/Budget and Finance Committee to The Board of Regents

Your Committee on Audits/Budget and Finance had its scheduled meeting on November 14, 2016. Regent Josephine Finn, Chair of the Audits/Budget and Finance Committee, submitted the following written report. In attendance were committee members: Regent Finn, Char, Regent Tilles, Regent Young, Regent Collins, Regent Mead and Regent Hakanson.

Regents, in addition to Audits/Budget Committee Members, in attendance were: Chancellor Rosa, Vice Chancellor Brown, Regents Cashin, Cea, Cottrell, and Ouderkirk, as well as Commissioner Elia and Executive Deputy Commissioner Berlin.

ITEMS FOR DISCUSSION

Chair’s Remarks: Regent Finn welcomed everyone and congratulated Donald Juron on his 34 ½ years of dedicated service.  She introduced Don Juron, Chief Financial Officer, to present the October 2016 Fiscal Report and Sharon Cates-Williams, Deputy Commissioner, to present the Board of Regents Oversight of Financial Accountability Report and Overview of the SED Office of Audit Services.

2016 Fiscal Report

Our Chief Financial Officer provided the Members with the October fiscal report that reflects actual expenditures through October 31, 2016 and projected expenditures through the lapse period ending June 30, 2017.  Extensive spending controls continue for all funds.  General Fund spending plans reflect the amounts appropriated in the 2016-17 enacted budget. General Fund accounts are in structural balance. Special Revenue accounts are all in structural balance on a current year basis and the accumulated negative balance in the Cultural Education Account is projected to remain at a negative $3.6 million. Federal Funds reflect current year plans for two year grant awards.

Completed Audits

The Department’s Internal Audit Workgroup reviewed fifty-four audits that are being presented to the Committee this month. All fifty-four were issued by the Office of the State Comptroller (OSC). Thirty-nine audits were of school districts, seven BOCES, two of the State Education Department, one of the State Education Department and the Department of Health, one college, two charter schools, and two providers of special education services.

The findings were in the areas of budget and financial reporting, capital construction, cash, claims processing, employee and contractor finger printing, information technology, non-resident student tuition, payroll/leave accruals, procurement, Reimbursable Cost Manual compliance, reserve funds, school fire and safety, school lunch program, segregation of duties, student immunizations, and Tuition Assistance Program (TAP).

Deputy Commissioner, Sharon Cates-Williams, gave a brief overview of the State Education Department – Oversight of School Fire Safety Compliance

• Auditors visited 25 schools and found many did not complete the required number of fire drills; they also found that emergency evacuation plans at six schools did not include procedures to address evacuation of students who have disabilities or special needs.
• Almost 50 percent of the total number of private schools did not submit required inspection reports for the 2015-16 school year.
• The Department’s electronic reporting system has not been verified for accuracy and lacks reporting capabilities to monitor school compliance.

The report’s recommendations focused primarily on SED officials developing a risk-based approach for verifying, by site visit or other means, whether information provided in fire inspection report is accurate and schools are complying with fire safety requirements.

SED officials agreed with the report’s recommendations and have indicated that they planned corrective action.

In addition, Deputy Commissioner, Sharon Cates-Williams, presented the SED Office of Audit Services Overview.  The presentation covered the Office’s responsibilities and other areas such as, the differences between auditing and monitoring, the types of internal and external audits done by the Office, and the purpose of audit summaries.