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 January 9, 2017. Regent Josephine Finn, Chair of the Audits/Budget and Finance Committee, submitted the following written report. In attendance were committee members: Regent Finn, Chair, Regent Collins, Regent Hakanson, Regent Mead, Regent Tilles, and Regent Young.

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

ITEMS FOR DISCUSSION

Chair’s Remarks: Regent Finn welcomed everyone. She introduced Beth Berlin, Executive Deputy Commissioner, to present the December 2016 Fiscal Report and Sharon Cates-Williams, Deputy Commissioner, to present the Board of Regents Oversight of Financial Accountability Report.

2016 Fiscal Report

Our Executive Deputy Commissioner provided the Members with the December fiscal report that reflects actual expenditures through December 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 forty-one audits that are being presented to the Committee this month. All forty-one were issued by the Office of the State Comptroller (OSC). Twenty-eight audits were of school districts, five BOCES, and eight providers of special education services.

The findings were in the areas of budget and financial reporting, capital construction, cash, claims processing, extra classroom activity fund, information technology, payroll/leave accruals, procurement, Reimbursable Cost Manual compliance, and Tuition Assistance Program (TAP).

Deputy Commissioner, Sharon Cates-Williams, gave a brief overview of the Gingerbread Learning Center

• OSC audited three fiscal years ending June 30, 2013.
• They reported costs of $942,998 that did not comply with the Manual’s requirements for reimbursement.
• The ineligible costs included $621,356 in personal service costs and $321,642 in other than personal service costs.

The report’s recommendations focused primarily on SED reviewing the recommended disallowances and making the appropriate adjustments to the costs reported on Gingerbread’s CFRs and to their reimbursement rates.

SED officials agreed with the recommendations and will review and make adjustments, as noted in the report, and recover any overpayment as appropriate, along with providing technical assistance to the provider.