School Districts Auditors | New York State
External & Internal Audits

Overview of Recent School Accountability Legislation: In response to taxpayer concerns, the New York State Comptroller’s Office worked with a coalition of school and professional organizations, including the New York State School Boards Association, the New York State Society of Certified Public Accountants, the New York State Council of School Superintendents, the New York State Association of School Business Officials and the State Education Department (SED) to develop policy solutions to improve the internal control structures in school districts and increase the effectiveness of financial oversight mechanisms.

Send Request for Proposals to:

Freed Maxick & Battaglia, CPAs    Attn: Eric Majchrzak    Governmental Group    424 Main Street    Liberty Building, Suite 800    Buffalo, NY 14202    or send via email here

As a result of these efforts, new State legislation was enacted in July 2005 that will strengthen auditing, training and financial oversight by school district officials and boards. The new law includes the following key provisions:

• Requires six hours of training for school board members on their financial oversight responsibilities.
• Establishes an internal audit function within each school district.
• Creates audit committees in school districts.
• Mandates a competitive RFP process for selecting audit firms at least every five years.
• Improves the effectiveness of annual external audits by requiring
  direct school board involvement and a formal response to issues raised in the audit.

In addition, OSC was provided funding to audit all school districts, BOCES and charter schools statewide during the next five years. OSC audits will generally focus on financial controls and operations, but could include any part of school district operations depending on the situation at the time of audit. Together with the coalition that helped develop the Five-Point Plan, OSC has prepared a school district auditing information guide. The Comptroller has also issued guidance on creating an audit committee charter and information on what to expect from an audit generally.

The State Education Department is working in consultation with OSC to approve a school board training curriculum and to develop regulations regarding internal audit requirements. OSC has collaborated with SED to develop guidance for school districts to help strengthen their external financial audits. OSC has also developed guidance for school district officials on procuring external audit services, and SED has developed an RFP template for districts that prefer to use it rather than developing their own.

---

2007 News Briefs on School District Audits From the New York State Society of CPAs

• Audit: Improper Payments to Jefferson School Official
• Audit Faults Berne-Knox-Westerlo School District
• Accurate Statements Could Have Prevented N. Babylon Cuts
• Senate Expected to Boost Roosevelt Schools
• Audits: Weak Practices at East Moriches, Southold Schools
• New Leader Appointed at Roosevelt Schools
• DiNapoli Announces School Board Training
• Roosevelt's School Superintendent Resigns
• Roslyn Hires New Superintendent
• Ex-William Floyd School Official Sentenced
• Roosevelt Board Cuts Services, $300G in Jobs
• Audit Finds Problems at Newfane Schools
• W. Floyd Superintent Sentenced on State Charges
• Spitzer Pushes Property Tax Cut, School Reform.
• Audit: Weak Financial Practices at Lakeland Central Schools
• Audit: Poor Recordkeeping at Seaford School District
• Comptroller's Office Releases Annual School District Report

2006 News Archives
2005 News Archives
2004 News Archives

---

Regarding Internal Audits

The legislation mandates that school districts create an internal audit function no later than July 1, 2006. The internal audit function will extend far beyond merely auditing the claims of the District, it is to be global in nature and to address all aspects of a District’s operations and internal controls, from decision-making processes, to payment of claims, to accountability of Board members. In order for the internal audit function to operate as intended, it should be awarded to a firm with a high degree of knowledge of school district operations and internal controls. The auditor should also be able to identify risks, develop an audit plan to test internal controls, evaluate the results of these tests, make recommendations to reduce identified risks and be able to clearly communicate with the Board of Education results of the process. One effect of the legislation is that a District’s general audit firm will not be able to serve as both the internal and external auditors. The assumption of the internal audit function by the District’s external auditor would be considered a breach of independence as defined by our professional standards.

---

How Freed Maxick & Battaglia, CPAs Can Help

As Western New York’s Largest public accounting firm, Freed Maxick & Battaglia, CPAs can assist you in the implementation of an internal audit function because we have extensive expertise in school district operations. We were also involved with the legislation through our Firm's involvement with the NY State Society of CPA’s Public School Accounting Committee, where we reviewed drafts of the legislation and submitted comments and recommendations to the Schools Financial Accountability Coalition, who was responsible for developing the legislation.

In an effort to assist school districts in this environment of greater accountability, Freed Maxick & Battaglia, CPAs will take a proactive approach to keep you informed and ensure that you are aware of the significance of the various components of the legislation.

Some of the services we offer include:

• Audit services
• Single audit and compliance audit services
• Accounting, bookkeeping and reporting assistance
• Internal control evaluations
• Budget planning and management
• Fund balance planning and management
• Cash management
• Evaluation and calculation of incurred but not reported liabilities
• Performance of special agreed-upon procedures
• Development and implementation of profit enhancement strategies
• Consulting services

Related Links:

• Counties
• Cities
• Fire Districts
• School Districts
• Towns
• Villages

---

Governmental Group Contact Information:

Freed Maxick & Battaglia, CPAs is Western and Upstate New York's (NY) largest public accounting firm and a Top 100 firm in the U.S. Freed Maxick provides, audit, tax and consulting services to private and public (SEC) companies in Buffalo, Rochester, Syracuse and Albany New York. Freed Maxick & Battaglia, CPAs is also affiliated with RSM McGladrey, the 5th largest accounting firm in the U.S., Freed Maxick has vast national and international resources to help your business expand nationally and internationally.

Contact us Via the Web or 585-344-1967

Laura Landers, CPA, MPA	Kathryn Barrett, CPA
Director	Director