Senate and Assembly Passes School Reform Bills
FOR RELEASE: June 21, 2005
Quote:
Legislature Passes School Reform Bills
After the Senate and Assembly passed two school finance reform bills, New York State Comptroller Alan G. Hevesi today thanked the Legislature for this action:
“These two bills are crucial to restoring accountability and public trust in school finances following the scandals in several Long Island districts. The bills correctly make strong internal controls inside each school district the primary defense against mismanagement and corruption. The bills will help each school district develop the tools to deter corruption and facilitate discovery of wrongdoing when it does occur. The bills also provide for better independent audits, as well as regular audits by the Comptroller’s Office. That outside review is essential to ensure that internal controls are implemented and followed.
“I would like to thank both the Senate and Assembly, especially Majority Leader Bruno and Speaker Silver, for their non-partisan approach to this important issue. I would also like to thank the members of the education community and others with whom we developed this legislation ¯ the New York State School Boards Association, the New York State Society for Certified Public Accountants, the New York State Council of School Superintendents and the New York State Association of School Business Officials. I would also like to thank the State Education Department for contributing their expertise during the development of the plan.”
The bills are:
A.6082-B/S. 5050-A ¯ Five-Point Plan for School Financial Accountability
This bill implements the five-point plan developed by the State Comptroller’s Office in cooperation with a coalition of education organizations. The plan strengthens auditing, training and financial oversight by school district officials and their boards, and includes the following key provisions:
Require training for school board members on their financial oversight responsibilities.
Establish an internal audit function within each school district.
Create audit committees in school districts.
Mandate a competitive RFP process for selecting audit firms.
Improve annual external CPA audits by requiring direct school board involvement and a formal response by the school board to issues raised in the audit, and by providing better guidance on internal controls testing by the CPA firm.
A. 6761-B/S. 890-B ¯ Fiscal Audits of School Districts
This legislation allows the State Comptroller’s Office to access $2.9 million in funding provided in the 2005-06 Enacted State Budget to audit school districts statewide. OSC responded immediately to the problems on Long Island by redirecting $1.2 million in existing resources and conducting audits in 23 school districts on Long Island, including in-depth audits of internal controls over financial operations in nine districts and administrative expense audits in 14 other districts.
To add an effective audit presence for school districts, State Comptroller’s Office requested resources to hire and train 89 staff to audit all school districts in the State within a five-year period.
The $2.9 million in the budget provides initial funding for this program, but access to this funding was made contingent upon “chapter legislation” defining its use. This legislation answers that need and specifies that the funds are to be used for school financial audits. It requires that each school district, charter school and BOCES (Board of Cooperative Educational Services) be audited within five years, and provides for the Comptroller to report annually to the Governor and the Legislature on the school audits initiative.
