On June 17, 2016, Thomas P. DiNapoli, the New York State Comptroller, released an audit called “Extra-Classroom Activities,” which disclosed how ineffectively officials (school principals, district treasurers, student activities directors, and school treasurers) from six different school districts (Deposit, Dryden, Greene, Ithaca, Laurens, and Livingston Manor Central) in New York State kept track of extra-classroom activity funds (ECAFs) from July 1, 2013, through May 8, 2015.
The New York State Education Department (SED) defines ECAFs as cash raised by means other than taxation or a board of education (Board). The audit found that while the School Boards had already adopted policies for properly recordkeeping cash receipts and disbursements, the Board and district officials “did not ensure that policies were being followed or that procedures were adequate.”
The findings were these. Out of the 442 cash receipts reviewed, totaling $299,000, “158 receipts totaling $113,800 were unsupported and 193 receipts totaling $164,400 were submitted to the Treasurer either untimely or [the study] could not determine timeliness due to inadequate records.” In fact, “None of the Districts we reviewed ensured that each activity requiring a profit and loss statement had one to support the fundraising event.” The audit also reviewed 330 disbursements totaling $281,000 and found that “72 disbursements totaling $64,000, or 23 percent, lacked appropriate support at the club level.” This meant that district officials lacked competent supervision over ECAF disbursements, which made it difficult to assess the amount and validity of disbursements. Thus, districts faced an increased “risk of fraud or misuse of these funds.”
Gabriel F. Deyo, Deputy Comptroller, released information that pertained specifically to ICSD. In LACS, the audit reviewed 61 receipts totaling $19,400 and “could not determine if 43 receipts, totaling $8,400 were deposited in the bank” due to a lack of deposit slips or poor recordkeeping. Also, at LACS, disbursements totalling $21,000 lacked sufficient documentation and 15 electronic transfers totalling $18,500 were either not approved or lacked a record of approval.
The data regarding ECAF transactions at ICSD middle schools were revealing as well. At Boynton Middle School, “No or minimal records existed for 13 cash receipts totaling $25,100” and 11 out of 13 tested disbursements totalling $12,500 lacked appropriate recordkeeping. At DeWitt Middle School, the study simply “could not determine if all receipts were accounted for due to record keeping practices.”
However, the audit did not find significant issues relating to cash receipts and management of cash disbursements at IHS, albeit “minor deficiencies with District officials.” Alice Linton, IHS account clerk typist, said, “In addition to the state comptroller auditing our books last year—this was the only audit done by them since I’ve been at IHS; I started in 1998—we are audited every year by an accounting firm. The accounting firm has not found significant problems, so we have not undergone any recent changes.”
Linton attributes this success to the few new procedures that were added over the past few years. “All club student treasurers are now asked to keep a student ledger in addition to the ledger that I keep. That needs to be turned in at the end of each school year so the auditors can compare it to my records,” she said.
Linton is also looking forward to some changes. “This year, we may start a new procedure where student treasurers bring their records to my office at the end of the first semester to make sure we are in agreement. This can save a little time at the end of the school year if there are any discrepancies,” she said. “Generally, everyone was pleased with IHS and the controls that we have in place.”
The audit did suggest that district boards adopt and enforce policies that better oversee ECAF cash receipts, disbursements, and recordkeeping. It also recommended that district officials ensure that school treasurers, faculty advisors, and student treasurers follow the policies and keep “adequate and appropriate accounting records.”
All six of the reviewed school districts released letters in response to the auditors, in acknowledgement of the mismanagement of the recordkeeping and depositing processes. Superintendent Luvelle Brown and Mr. Robert Ainslie, President of the BoE, initiated a few changes at Boynton Middle School, DeWitt Middle School, and LACS. Linton said, “They have all moved to a computer program designed for extracurricular activities and have gone through training for that.”