Report: Roslyn Schools Auditor Ignored, Missed Fraud Evidence

ALBANY, N.Y. -- The accounting firm that audits more than half of Long Island's school districts ignored or missed evidence of massive fraud in Roslyn, N.Y., that led to the theft of millions of dollars, a report by state Comptroller Alan G. Hevesi’s office has found, according to Newsday.

Click here to see the full report and all corresponding documentation.

The report, released Thursday, describes a pattern of "appallingly inadequate" work by Roslyn's former independent auditor, Miller, Lilly & Pearce of East Setauket, N.Y., that was full of unexplained discrepancies and routinely violated basic accounting practices and ethical standards for the profession.

The firm's managing partner, Andy Miller, could not be reached for comment, by Newsday. But as the Roslyn scandal unfolded last spring, he said that no accounting firm could have caught the alleged fraud, because it involved a conspiracy between several key administrative and financial officials.

But Hevesi's report points out serious discrepancies in the accounting firm's records that raise questions about one of the key methods used to conceal the alleged theft: changing the vendor names on computerized financial records to make it appear as if checks were written to school-related companies, when they were actually being used to pay for personal expenses.

In at least seven instances, state auditors found that the vendor name changes were not made when the checks were written, but in February and March 2004, after two anonymous letters were sent to the district and the district attorney's office accusing school officials of massive fraud.

Yet workpapers from the accounting firm, which were supposed to reflect what was in the computerized records at the time of the annual audits in 2001-02 and 2002-03, showed the bogus vendor names -- even though the changes were not made until years after the audits were performed.

-- NYSSCPA.org News Staff

Posted on 1/6/05