Role in the Stewardship of New York’s School Districts
October 2004, responding to recent financial scandals in certain
Long Island school districts, New York State Comptroller Alan
Hevesi announced a five-point plan for increasing financial
accountability in all New York State schools.
plan, which the NYSSCPA supports, is one of our state government’s
more important initiatives in recent years, because nothing
matters more to the future of our state than the proper
education of its children. And nothing deserves more thoughtful
scrutiny than its finances, which comprise an enormous part
of the state budget.
More Responsible Oversight
plan has been submitted to the state legislature. Because
not every part of the plan requires legislative action,
some points are already moving ahead. In the wake of the
scandals, Hevesi is also conducting detailed forensic audits
at five districts and reviewing administrative expenses
at 16 others.
its entirety, the plan includes:
Enhancing the effectiveness of the external audits that
all school districts are required to obtain every year.
This will include presenting the audit results to the
full school board in a public meeting.
Requiring audit committees in school districts to ensure
that audit findings and other accountability issues receive
adequate oversight. These committees would oversee the
selection of both internal and external auditors, as well
as oversee auditors’ work.
Requiring a competitive RFP process for selecting auditors
when contracts expire, or at least every five years. Current
vendors that meet independence and other requirements
will be allowed to compete. Auditor rotation is not required.
Creating an internal audit function within each school
district’s financial management team that performs
internal auditing, particularly the testing of internal
Requiring six hours of financial oversight training for
all newly elected school board members. The NYSSCPA will
assist in implementing this plan, with 26 hands-on seminars
to be held around the state for school board members,
business administrators, and superintendents. This training
will be part of an integrated course of study covering
the fiduciary and other responsibilities of school board
plan will take time to develop and money to execute—more
than $5 million each year. But that amount pales in comparison
to the benefits of better financial management.
discussions include requiring that the external audits of
New York’s school districts comply with the Government
Accountability Office’s (GAO) Government Auditing
Standards, better known as the “Yellow Book,”
which applies to both mandatory financial audits and to
voluntary audit services that are subject to standards for
boards, the stewards of the tax dollars that we allocate
for our children’s education, have an enormous responsibility.
But sincere dedication to quality education is not enough.
Serving in any area of financial responsibility within the
educational system requires a financial education in itself.
The people who accept that responsibility deserve the best
available expertise wherever they need it. In the financial
management arena, the CPA—the trusted professional—is
the logical one to play this role.
Publisher, The CPA Journal
Executive Director, NYSSCPA