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 September 13, 2016.  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 Tallon, Regent Tilles, Regent Young, Regent Ouderkirk, Regent Collins, Regent Mead and Regent Hakanson. In addition to Audits/Budget Committee Members, in attendance were: Chancellor Rosa, Regents Cashin, Cea, and Cottrell, as well as Commissioner Elia and Executive Deputy Commissioner Berlin.

ITEMS FOR DISCUSSION

Chair’s Remarks: Regent Finn welcomed everyone.  She introduced Sharon Cates-Williams, Deputy Commissioner to present the Board of Regents Oversight of Financial Accountability Report and Don Juron, Chief Financial Officer to present the August 2016 Fiscal Report.

Completed Audits

The Department’s Internal Audit Workgroup reviewed the one hundred and twenty audits that are being presented to the Committee this month. Two were issued by the New York City Comptroller and the remaining one hundred twenty were issued by the Office of the State Comptroller (OSC). One hundred ten audits were of school districts, four BOCES, two providers of special education services, one of the State Education Department, one of the Office of General Services and the State Education Department, one addressing six districts within one region, and one College.

The findings were in the areas of banking, budget and financial reporting, capital assets, cash, claims processing, extra classroom activity fund, fuel accountability/energy management, information technology, payroll/leave accruals, procurement, reimbursable cost manual, segregation of duties, employee overtime, health insurance contribution, implementing corrective actions, inventory control, school lunch fund, state aid, preferred source contracting, reserve funds, safe schools act, and tax collection.

Deputy Commissioner, Sharon Cates-Williams, gave a brief overview of the NYC Charter School Audits and East Ramapo follow-up Audit.

NYC Charter School Audits

There are two audits of charter schools with a number of recommendations. Both audits found issues with fiscal management, inadequate controls and failure to follow established rules and procedures.

Bedford Stuyvesant New Beginnings Charter School – 19 recommendations
Merrick Academy Queens Public Charter School– 17 recommendations

East Ramapo Follow-up Audit

The audit focused on the implementation of recommendations for two previously issued audit reports. Of the five audit recommendations from the 2013 audit, one recommendation was implemented, one recommendation was partially implemented and three recommendations were not implemented. Of the eleven audit recommendations from the 2011 audit, one recommendation was implemented, seven recommendations were partially implemented, two recommendations were not implemented and one recommendation was not applicable.

2016 Fiscal Report

Our Chief Financial Officer provided the Members with the August fiscal report that reflects actual expenditures through August 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.