Presents
Fiscal Oversight Fundamentals
for
School Board Members
Safeguarding District Resources:
Roles and Responsibilities
New York State School Boards Association
Table of Contents
Page
Audit Committee Self Evaluation…………………………………. 1
Audit Committee Charter Guidance……………………………… 6
Internal Audit Charter…………………………………………….. 9
Internal Auditor Job Description…………………………………. 17
RFP Guidance……………………………………………………… 22
NYSSBA Sample Policies
#2160 School District Officer and Employee Code of Ethics…………..
#6640 Inventories………………………………………………………….
#6660 Independent/External Audits…………………………………….
#6660-E External Audit Guidance For School District Officials……...
#6680 Internal Audit Function…………………………………………..
#6690 Audit Committee……………………………………………….....
#6690-E Audit Committee Charter Template………………………….
#6700 Purchasing………………………………………………….............
#6710 Purchasing Authority……………………………………………...
#6830 Expense Reimbursement………………………………………….
#8330 Authorized Use of School-Owned Materials and Equipment…..
#8334 Use of Credit Cards………………………………………………..
#9120.1 Conflict of Interest………………………………………………
#9645 Disclosure of Wrongful Conduct (Whistleblower Policy)……....
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Reading Material…………………………………………………… 70
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Audit Committee Charter Guidance
Provisions of Education Law require the trustees or board of education (board) of most
school districts to establish an audit committee to oversee and report to the board on the
annual independent audit of the district’s records. Education Law also requires most
school districts to establish an internal audit function and for the audit committee to assist
the board in the oversight of that function. Pursuant to section 170.12 of the Regulations
of the Commissioner of Education, which were adopted as an emergency action and are
subject to revision, the audit committee must develop and submit to the board for
approval, a formal, written charter, which must include provisions regarding the
committee’s mission, duties, responsibilities and membership requirements.
These guidelines provide a framework and offer guidance that boards of education can
use for establishing an audit committee charter. A sample charter is provided at the end of
this guidance. This sample charter does not include all activities that might be appropriate
to a particular audit committee, nor will all activities identified in this sample charter be
relevant to every committee. Except for those requirements mandated by Education Law
§§2116-b and 2116-c, this sample charter should be tailored to meet each district’s needs
by taking into consideration the size and complexity of each district’s operations.
Audit Committee Authority
This section of the charter should cite Education Law §2116-c, which requires every
school district, except those employing fewer than eight teachers, to establish an audit
committee by January 1, 2006 by resolution of the board. The role of the audit committee
is to assist and advise the board on issues relating to the district’s external and internal
audit functions. However, the ultimate responsibility for review and action on audit
reports remains with the full board.
Mission
This section of the charter should describe the purpose or mission of the audit committee
in connection with both external and internal audit functions. It should address the
appropriate scope of the audit committee’s activities and make clear that these activities
are advisory in nature.
Composition and Requisite Skills
This section should describe the number of members on the audit committee (Education
Law §2116-c requires at least three). Members should collectively possess the knowledge
in accounting, auditing, financial reporting and school district finances needed to
understand and resolve concerns raised by independent auditors or the district’s internal
auditor.
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To accommodate the varying needs and circumstances among school districts,
membership of the audit committee may be structured in any of the following
configurations:
•
•
•
As a committee of the board;
As a committee of the whole board; or
As an advisory committee that may include or be comprised entirely of persons
other than board members, if the board deems that such composition is advisable
to provide the requisite accounting, auditing and financial reporting knowledge.
Although audit committee members are considered district officers for certain limited
purposes, they need not be residents of the district. This can help ensure that the
committee has the appropriate level of knowledge. Committee members serve without
compensation but are allowed reimbursement for any actual and necessary expenses
incurred in relation to attendance at committee meetings.
Audit Committee Duties
This section should specify the duties and responsibilities to be performed by the audit
committee. The committee has two primary functions: to assist in the oversight of the
annual external audit and assist in the oversight of the internal audit function (if an
internal audit function is required in that district). The committee’s responsibilities start
with recommendations regarding the selection of the independent and internal auditors
and continue on through the review of significant internal and external audit findings.
This section of the charter should also outline the principal features of the external audit
engagement and monitoring process.
Membership Qualifications
This section should specify the ethical standards required of audit committee members,
including who is not eligible to serve on the board. Employees of the school district and
certain other individuals are prohibited from serving on the audit committee.
Meetings and Notification
This section should describe the frequency of audit committee meetings and
documentation requirements for meetings held. Meeting frequency will largely depend on
the nature and scope of the audit committee’s responsibilities.
Education Law §2116-c (7) provides that an audit committee may conduct an executive
session under certain circumstances, including those pertaining to meetings with the
external auditor prior to the commencement of the audit, reviewing and discussing with
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the external auditor any risk assessment of district fiscal operations, receiving and
reviewing the draft external audit report and accompanying management letter, and
assisting the board in interpreting these documents. The audit committee should consult
with the district’s legal counsel prior to utilizing the executive session privileges
enumerated in this section of Education Law.
Section 2116-c (7) also provides that a member of the board of education who is not a
member of the audit committee may be allowed to attend an audit committee meeting if
authorized by a resolution of the board.
Decision-Making Process
This section should describe the guidelines to be followed by the audit committee in their
decision-making and voting process.
Reporting Requirements
This section should describe the board of education’s reporting expectations for the audit
committee.
Review of the Charter
This section should describe the expectations of the board of education for the annual
review of the audit committee charter.
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Audit Committee Charter Template
All italicized sample wording represents statutory requirements contained in Education
Law §§2116-b and 2116-c. All other (non-italicized) sample wording should be tailored
or modified to meet the requirements and guidance developed by the trustees or board of
education of each district. For those districts governed by trustees, the word “trustees”
should be substituted for “board of education”.
Audit Committee Authority
Pursuant to resolution number [insert number of resolution], dated [insert date of
resolution], the Board of Education of the [insert name of district] has established an
audit committee to assist the Board of Education in the oversight of both the internal and
external audit functions. The requirement to create an audit committee was established by
Education Law §2116-c. In accordance with Education Law §2116-c (4), the role of an
audit committee shall be advisory and any recommendations it provides to the Board
shall not be substituted for any required review and acceptance by the Board of
Education. The District’s resolution also states that [insert any other relevant wording
from the establishing resolution for each District].
Mission
The Board of Education of the [insert name of district] has established an audit
committee to provide independent advice, assistance, and recommendations to the Board
in the oversight of the internal and external audit functions of the district.
Composition and Requisite Skills
The [insert name of district] Audit Committee is comprised of [insert number of members
– must be at least three]. The committee shall include:
[Insert composition of the audit committee as established by the Trustees or the Board of
Education, whether as a committee of the board of education, a committee of the whole,
or an advisory committee.]
The Committee members collectively should possess the knowledge in accounting,
auditing, financial reporting and school district finances needed to understand and
evaluate the school district’s financial statements, the external audit and the district’s
internal audit activities. Accordingly, the Audit Committee’s members, collectively,
should:
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•
•
•
Possess the requisite knowledge necessary to understand technical and complex
financial reporting issues.
Have the ability to communicate with auditors, public finance officers and the
school board.
Be knowledgeable about internal controls, financial statement audits and
management/operational audits.
Duties and Responsibilities
The duties and responsibilities of the [insert name of district] Audit Committee include
the following:
•
External Audit Focus
o Provide recommendations regarding the selection of the external auditor
to the Board of Education.
o Meet with the external auditor prior to commencement of the audit to,
among other things, review the engagement letter.
o Review and discuss with the external auditor any risk assessment of the
district’s fiscal operations developed as part of the auditor’s
responsibilities under governmental auditing standards for a financial
statement audit and federal single audit standards, if applicable.
o Receive and review the draft annual audit report and accompanying draft
management letter, including the external auditor’s assessment of the
district’s system of internal controls, and, working directly with the
external auditor, assist the Board of Education in interpreting such
documents.
o Make a recommendation to the Board of Education on accepting the
annual audit report.
o Review every corrective action plan developed by the school district and
assist the Board of Education in the implementation of such plans.
•
Internal Audit Focus
o Make recommendations to the Board of Education regarding the
appointment of the internal auditor.
o Assist in the oversight of the internal audit function, including reviewing
the annual internal audit plan to ensure that high risk areas and key control
activities are periodically evaluated and tested, and reviewing the results
of internal audit activities.
o Review significant recommendations and findings of the internal auditor.
o Monitor implementation of the internal auditor’s recommendations by
management.
o Participate in the evaluation of the performance of the internal audit
function.
•
Administrative Matters
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o Hold regularly scheduled meetings.
o Review and revise the Audit Committee Charter, as necessary.
Membership
The membership duties of the [insert name of district] Audit Committee include the
following:
•
Good Faith – Members of the Committee shall perform their duties in good faith,
in a manner they reasonably believe to be in the best interests of the Committee
and the District with such care as a generally prudent person in a similar position
would use under similar circumstances.
•
Independence – An individual, other than members of the Board of Education,
may not serve on an audit committee constituted as an advisory committee if he or
she:
o Is employed by the district.
o Currently provides, or within the prior two years, has provided, goods or
services to the district.
o Is an immediate family member (spouse, spouse equivalent or dependent
[whether or not related]) or close family member (parent, sibling or
nondependent child) of an individual who is an employee, officer or
contractor providing services to the district.
o Is the owner of or has a direct and material interest in a company
providing goods or services to the district.
•
Confidentiality – During the exercise of duties and responsibilities, the
Committee members may have access to confidential information. The
Committee shall have an obligation to the district to maintain the confidentiality
of such information.
Meetings and Notification
The [insert name of district] Audit Committee shall meet a minimum of [insert number]
times each year. An agenda of each meeting should be clearly determined in advance and
the Audit Committee should receive supporting documents in advance, for reasonable
review and consideration. Any member of the Board of Education, who is not a member
of the Audit Committee, may attend audit committee meetings if authorized by a
resolution of the Board.
The Audit Committee shall give notice and prepare minutes of each meeting. At a
minimum, the minutes will include the following:
•
The meeting agenda
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•
•
•
Date, attendance and location of the meeting
Except as otherwise provided by law in connection with executive sessions,
summaries of the topics discussed, and all motions, proposals, resolutions and any
other matter formally voted upon and the vote thereon, including
recommendations agreed to by the committee.
As appropriate, copies of materials discussed or presented at the meeting.
Decision-Making Process
All decisions shall be reached by vote of a simple majority of the total membership of the
committee. A quorum constitutes a simple majority of the total membership and meetings
will not be conducted unless a quorum is present.
Reporting Requirements
The [insert name of district] Audit Committee has the duty and responsibility to report its
activities to the Board of Education as needed, but not less than annually. Periodic written
reports of Audit Committee activities are an important communication link between the
Audit Committee and the Board on key decisions and responsibilities. The Audit
Committee’s reporting requirements are to:
•
•
•
•
•
•
Report on the scope and breadth of committee activities so that the Board of
Education is kept informed of its work.
Provide minutes or a summary of minutes of meetings which clearly record the
actions and recommendations of the Committee.
Report on their review of the District’s draft annual audit report and
accompanying management letter and their review of significant findings.
Report on suspected fraud, waste or abuse, or significant internal control findings
and activities of the internal control function.
Report on indications of material or significant non-compliances with laws or
District policies and regulations.
Report on any other matters that the committee believes should be disclosed to the
Board of Education.
Review of the Charter
The [insert name of district] Audit Committee shall assess and report to the Board of
Education on the adequacy of this Charter no less than an annual basis or as necessary.
Charter modifications, as recommended by the Audit Committee, should be presented to
the Board of Education in writing for their review and action.
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XYZ SCHOOL DISTRICT
INTERNAL AUDIT CHARTER
Preamble:
The Internal Audit function is required under Ed. Law. Sec. 2116-b. The Board of
Education (hereinafter referred to as the “Board”) of the XYZ School District (hereinafter
referred to as the “District”) is responsible for the function.
The Board shall secure the services of a qualified “internal auditor” under Ed. Law sec.
2116-b. This position shall perform the Internal Audit function pursuant to Ed. Law sec.
2116-b.
Such a position reports to, and is accountable to, the Board. The Board is also required to
establish an Audit Committee under Ed. Law sec. 2116-c. The Audit Committee shall
assist the Board in the Board’s oversight of the Internal Audit function. [Ed. Law sec.
2116-c (6)]
The Internal Audit function, as carried out by the Internal Auditor, has a number of
objectives. These include: having a professional, as stated below, carry out audit duties;
supporting the Board’s governance responsibilities; assisting in detecting and preventing
fraud, waste, and abuse of District assets; and assisting to secure and maintain the public
trust and confidence that District operations are carried out in a prudent manner.
The following is meant to complement the Internal Auditor Job Description and the
Audit/Work Plan, which is approved by the Board. It is also meant to help document the
history and efforts of the Board to faithfully discharge its duties.
Internal auditing is an independent, objective assurance and consulting activity designed
to add value and improve the operations of the District. It helps the District accomplish
its objectives by bringing a systematic, disciplined approach to evaluate and improve the
effectiveness of the risk management, control, and governance processes.
Professional Standards:
The position of Internal Auditor shall be governed by adherence to applicable AICPA
Generally Accepted Auditing Standards and The Institute of Internal Auditors’ Code of
Ethics. The Institute’s International Standards for the Professional Practice of Internal
Auditing (Standards) shall constitute the operating procedures for the department. The
Institute of Internal Auditors’ Practice Advisories will be adhered to as applicable. In
addition, Internal Auditing will comply with applicable regulations promulgated by the
State Commissioner of Education, District policies and procedures, and the Internal
Auditor’s Annual Audit/Work Plan.
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Internal Audit Definitions:
Risk Assessment – A review of District operations to establish the level of risk, and
determine how frequently and when a specific area should be audited. This also assists in
planning audit procedures to be performed.
Audit Universe – Documentation compiled based on the risk assessment, displaying all
defined audit units and their intended audit frequency. This should be reviewed and
updated as needed to fit the changing needs of the District, and the needs and requests of
the Board and Audit Committee. It also includes any areas of compliance to be audited.
Audit/Work Plan – Defines the annual goals and responsibilities of the Internal Audit
function, namely the planned audits. The document is formulated based on current year
progress.
Audit – Typically includes the testing and evaluation of internal controls and a review of
financial policies and procedures of an audit unit, ending with a formal conclusion on the
audit objectives. Audit objectives can be modified to cover current events, or the needs,
requests, and concerns of the Board and Audit Committee.
Risk – Risk is the potential for loss due to error, fraud, inefficiency, failure to comply
with regulatory requirements, or actions which bring disrepute. Risk is a function of the
probability that such consequences will occur, their magnitude, and their imminence.
Inherent Risk – The susceptibility of an account balance or class of transactions to
misstatement that could be material, assuming there were no related internal controls.
Control Risk – The risk that material errors or fraud are not prevented or detected by the
internal control system.
Authority:
The position shall be accountable only to the Board, and shall have full authority.
Authority shall be granted for full, free, and unrestricted access to any and all of the
District’s records, physical properties, and personnel relevant to any function under
review, unless otherwise restricted by applicable provisions of law, in carrying out
responsibilities under the laws. All personnel are to assist the Internal Auditor in
fulfilling the requirements of the position. The Internal Auditor shall also have full, free
and unrestricted access to the Board of Education, any member of the Board, the Audit
Committee, any member of the support requests for contact with legal counsel, or the
External Auditor.
Documents and information given to the Internal Auditor during a periodic review will be
handled in the same prudent and confidential manner as by those employees normally
accountable for them.
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Organization:
The Internal Auditor shall report administratively and functionally to the Board.
Independence:
The Internal Audit activities shall remain free of influence by any element in the District,
including matters of audit selection, scope, procedures, frequency, timing, or report
content to permit maintenance of an independent and objective mental attitude necessary
in rendering report.
The Internal Auditor shall have no direct operational responsibility or authority over any
of the activities reviewed. Accordingly, the Internal Auditor shall not develop nor install
systems or procedures, prepare records, or engage in any other activity which would
normally be audited.
Audit Scope:
The scope of Internal Audit encompasses the examination and evaluation of the adequacy
and effectiveness of the District’s governance, risk management process, system of
internal control structure, and the quality of performance in carrying out assigned
responsibilities to achieve the District’s stated goals and objectives. It includes:

Reviewing the reliability and integrity of financial and operating information and the
means used to identify, measure, classify, and report such information.

Reviewing the systems established to ensure compliance with those policies, plans,
procedures, laws, and regulations which could have a significant impact on operations
and reports.

Reviewing the means of safeguarding assets and, as appropriate, verifying the
existence of assets.

Reviewing and appraising the economy and efficiency with which resources are
employed.

Reviewing operations or programs to ascertain whether results are consistent with
established objectives and goals and whether the operations or programs are being
carried out as planned.

Reviewing specific operations at the request of the Board or Audit Committee, as
appropriate.

Coordination where applicable with external auditors.
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Audit Planning:
Annually, the internal Auditor shall submit to the Board and the Audit Committee and
Audit/Work Plan, and any budgeting needs for the following fiscal year. The
Audit/Work Plan is to be developed based on a prioritization of the Audit Universe using
a risk-based methodology. Any significant deviation from the formally approved annual
Audit/Work Plan schedule shall be communicated to the Board and the Audit Committee.
Reporting:
A written report will be prepared and issued by the Internal Auditor following the
conclusion of each audit and will be distributed as appropriate. A copy of each audit
report will be forwarded to the Superintendent, appropriate management, the Board, and
the Audit Committee.
The Internal Auditor shall, where possible, include in the audit report the auditee’s
response and corrective action taken or to be taken in regard to the specific findings and
recommendations. Management’s response should include a timetable for anticipated
completion of action to be taken and an explanation for any recommendations not
addressed.
The Internal Auditor should periodically assess whether the purpose, authority, and
responsibility, as defined in this charter, continue to be adequate to enable the Internal
Auditing activity to accomplish its objectives. The result of this periodic assessment
should be communicated to the Board and Audit Committee.
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________________Central School District
Internal Auditor
Job Description
General Function:
The Internal Audit position is established pursuant to Ed. Law Sec. 2116-b, and reports directly to
the Board of Education (hereinafter referred to as the “Board”) of the __________________ Central
School District (hereinafter referred to as the “District”). The position carries out the Internal Audit
Function pursuant to Ed. Law Sec. 2116-b. The Audit Committee, established under Ed. Law Sec.
2116-b, shall assist in the oversight of the Internal Audit Function, and, hence, of the Internal
Auditor.
This is a new position and function under the law, and it is expected that new rules, regulations and
policies will be promulgated from time to time. These may come from various regulatory agencies
and the Board itself. Therefore, the Internal Auditor will be expected to be flexible and adaptive to
changing circumstances. This also means that significant challenges and opportunities will present
themselves to the Internal Auditor and to the Board.
The Internal Auditor shall perform all duties of and possess all the authority granted to an Internal
Auditor under to provisions of the Education Law or those of any other statute of the State of New
York, or under the applicable provisions of AICPA Generally Accepted Auditing Standards and
The Institute of Internal Auditors’ (The IIA) Code of Ethics, or The IIA’s International Standards
for the Professional Practice of Internal Auditing, or applicable IIA Practice Advisories.
This document is meant to complement the Internal Audit Charter and the Audit/Work Plan, which
is annually approved by the board. It is also meant to help document the history and effects of the
Board to faithfully discharge its duties.
If there is any conflict, apparent or real, between this Board approved Job Description Charter, or
the Board approved Audit/Work Plan, then the Board approved Job Description and the Board
approved Audit/Work Plan prevail.
The District is responsible for establishing and maintaining controls to prevent and detect fraud,
waste, and abuse. Internal Audit is responsible for examining and evaluating the adequacy and the
effectiveness of actions taken by the District to fulfill this obligation. Internal Audit should have
sufficient knowledge of fraud to be able to identify indicators that fraud might have been
committed. However, Internal Audit is not expected to have the knowledge equivalent to a person
whose primary responsibility is to detect and investigate fraud, only the knowledge and capabilities
of a reasonable person in a similar position. Audit procedures alone, even when carried out with
due professional care, do not guarantee that fraud or irregularities will be detected. Internal Audit
can provide only reasonable assurance, not absolute assurance, regarding the achievement of
District objectives. Internal Audit alone cannot prevent fraud, waste, and abuse, but can help to
significantly reduce the probability of their occurrence.
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The Internal Auditor is responsible for:
1. Performing independent and objective analyses, and appraisals of District financial
activities, organization structure, work processes and operations to determine efficiency,
effectiveness and compliance with applicable laws, regulations, procedures, and good
management practices in accordance with established audit standards.
2. Assisting the District in reducing the climate and opportunities for fraud, waste, and abuse
of assets by helping to decrease risk, and improve the efficiency of operations.
3. Providing continuous advocacy for the achievement of the District’s philosophy, mission,
strategy, and annual goals and objectives. This includes performing a key leadership
position by assisting the Board in managing and carrying out its fiduciary, business and
educational objectives. This also includes assisting in securing and maintaining public trust
in this respect.
4. Formulating audit procedures to review individual subsystems of internal control in order to
determine proper authorization and organization.
5. Applying accounting skills in auditing and analysis of accounting records, systems,
procedures and agency programs as related to fiscal management, and other operational
functions as appropriate.
6. Preparing, issuing, and maintaining consistent, complete, and organized working papers and
audit reports, some of which may be of a confidential nature.
7. Preparing and presenting, as part of a formal report, recommendations, including options
where appropriate and feasible, to the Board that would strengthen the internal operations of
the District.
8. Including the key business operations performed by the Central Business Office in the initial
and annual risk assessment development and update respectively, and performing audits on
those operations as deemed appropriate.
Major Functional Expectations:
1. Assists the District in achieving its goal of assessing risk exposure on a current and ongoing
basis by:
a. Developing a risk assessment of District operations, including but not limited to a
review of financial policies and procedures and the testing and evaluation of District
internal controls.
b. Performing an annual review and update of the risk assessment.
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2. Plans and executes complete and organized internal duties of defined financial and
operational audit units by:
a. Periodically testing and evaluating one or more areas of the District’s internal
controls, taking into account risk, control weaknesses, size and complexity of
operations.
b. Developing and implementing an annual auditing plan.
3. Ensures the Board and Audit Committee are well informed of Internal Audit’s progress and
status, to enable the Board to make informed decisions by:
a. Attending Board meetings and convening with Board and Audit Committee
members as deemed necessary.
b. Timely preparing and issuing straightforward reports which analyze significant risk
assessment and/or audit findings as frequently as necessary, and which can be
interpreted easily by the Board.
c. Promoting and maintaining clear, open lines of communication with the Board and
Audit Committee.
d. Ensuring that the board and Audit Committee are aware of changing needs or issues
encountered by the internal Audit function, including but not limited to budgeting
needs, and audit scope limitations.
e. Estimating, to the extent feasible and possible, the potential for loss to the District
uncovered as a result of the completion of an audit.
4. Works continuously to improve efficiency and effectiveness of District operations by:
a. Recommending changes and options for strengthening controls and reducing
identified risks, and ensuring timeframes are established for implementation of such
recommendations, while always keeping in mind feasibility of recommendations.
b. Developing a system to annually monitor and follow up on the implementation of
recommendations and management responses resulting from internal audit reports.
5. Supports the District in achieving its goal of fortifying and enhancing the Independent Audit
process by:
a. Assisting in the coordination of Independent Audits.
b. Assessing and commenting on the adequacy, timeliness, and appropriateness of
management’s proposed corrective action plans to the Independent Auditor’s Report
findings on an annual basis.
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6. Functions as the District’s Compliance Officer by:
a. Determining the various applicable areas within the District, which are required to
operate under specific strict guidance from an outside governing body.
b. Evaluating and reporting on the identified compliance audit units to determine their
conformity with promulgated rules and regulations.
7. Proactively manages the Internal Audit Function by:
a. Communicating effectively with the Board and Audit Committee including focusing
on written and verbal clarity.
b. Being familiar with District financial policies and procedures, including
administrative regulations.
c. Being familiar with statutory or regulatory requirements relating to financial
operations or transactions, including purchasing and procurement requirements under
the General Municipal Law.
d. Reviewing relevant industry literature and guidance.
e. Exerting a continued effort to stay apprised of applicable legislative updates,
changes, and recommendations.
f. Continuing to obtain and develop relevant technical and working knowledge through
reading professional literature, participation in professional societies, and formal
continued professional education.
g. Considering the efficiency and effectiveness of Internal Audit operations and
processes on an ongoing basis.
Summary of Annual Responsibilities:
1. Performing an annual review and update of the initial risk assessment.
2. Developing and implementing an annual auditing plan, to be approved by the Board.
3. Monitoring, following up on, and annually reporting on the Board’s implementation of
recommendations and management responses resulting from internal audit reports.
4. Assessing and commenting on the adequacy, timeliness, and appropriateness of
management’s proposed corrective action plans to the Independent Auditor’s Report
findings on an annual basis.
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Scope of Authority and Independence:
The position shall be accountable only to the Board, and shall have full authority. Authority shall
be granted for full, free, and unrestricted access to any and all of the District’s records, physical
properties, and personnel relevant to any function under review, unless otherwise restricted by
applicable provisions of law, in carrying out responsibilities under the laws. All personnel are to
assist the Internal Auditor in fulfilling the requirements of the position. Their Internal Auditor shall
also have full, free and unrestricted access to the board of Education, any member of the Board, the
Audit Committee, any member of the Audit Committee, the District’s legal counsel, and to the
District’s External Auditor. The Board shall fully support requests for contract with legal counsel,
or the External Auditor.
Educational and Experience Requirements:
1. Certified Public Accountant registered to practice in the State of New York with at least two
years of relevant experience.
2. Able to perform duties in accordance with AICPA Generally Accepted Auditing Standards
and the Institute of Internal Auditors’ Code of Ethics. Adhere, where applicable, to the
Internal Standards for the Professional Practice of Internal Auditing of the Institute of
Internal Auditors.
Other Desired Skills and Capabilities:
1. Possesses excellent verbal and written communication skills.
2. Develops and maintains positive working relationships.
3. Flexible and adapts to changing priorities and circumstances.
4. Follows up with the Board or Audit Committee in a timely manner, or as promised.
5. Performs all job responsibilities with honesty, independence, credibility, integrity, and due
professional care.
6. Takes ownership and responsibility for job duties and responsibilities, and is open and
responsive to constructive criticism, and recommendations for improvement.
7. Possesses and maintains Certified Public Accountant (CPA) licensure by fulfilling the
Continuing Professional Education (CPE) requirements set forth by applicable governing
policies.
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RFP Guidance for School Districts Seeking Audit Services
Overview
This section should:
1. Describe the purpose for which the school district is soliciting an a request for
proposals (RFP)
ƒ General information which directs the need for the audit (laws/regulations)
ƒ Timeline for RFP submission, review and selection
ƒ Outline of expected engagement calendar
o Audit start date
o Time frames for preliminary audit work and final fieldwork
o Due date for filing of auditor’s report.
2. Provide background and description related to the school district
ƒ Description of the district (K-12 enrollment, list of district schools, size of
budget, etc.)
ƒ Description of the Board of Education
ƒ Name of BOCES
ƒ District management structure and list of contacts
ƒ Number of employees (administrators, teachers, support staff)
ƒ Description of other important district operations (food or computer services)
ƒ Fund structure
ƒ Schedule of state and federal financial assistance
ƒ Pension plans
ƒ Description of financial software programs used
ƒ Three-year history of expenditures by major object
ƒ Three-year history: number of W-2’s, purchase orders and extra classroom
activity fund checks.
ƒ Availability of prior reports and papers
Scope
This section should:
1. Specify which financial statements will be audited and the applicable time period to
be audited
2. Specify audit standards to be followed
ƒ Government Audit Standards (Yellow Book)
ƒ Standards promulgated by the Office of the State Comptroller (OSC)
ƒ Regulations of the Commissioner of Education
ƒ Regulations of the Federal Government regarding federal funds
ƒ Specific guidelines from the Board of Education or Superintendent of Schools
OFFICE OF THE NEW YORK STATE COMPTROLLER
1
22
3. Describe content of mandatory work products
ƒ Annual financial report, including Management Discussion & Analysis
ƒ Audit of extra-classroom activity funds
ƒ Single audit report (where required)
ƒ Management letter, including district’s actions to address items in previous
management letter
4. Describe content of additional work products (if any are under consideration)
ƒ Internal controls review
ƒ Computer software review
5. Discuss work product issues (i.e. who will have access to materials and working
papers) and confidentiality issues
6. Outline expectations in terms of entrance/exit conferences, progress reports,
responsibility for report preparation, documentation, retention period etc.
7. List any assistance to be provided by district staff during the audit
ƒ Finance department staff
ƒ Clerical staff
ƒ Internal auditor of the district
ƒ Work area and equipment provisioning
8. Specify contract terms and conditions
ƒ Written contract with an engagement letter outlining audit scope, deliverables,
and standards for performance
ƒ Sanctions for non-performance (reduction in fees, flat penalties, cost recovery)
ƒ Engagement letter should require auditor to notify the State Education
Department (SED) if district terminates audit prematurely, require district to
notify SED if auditor resigns from audit prematurely, and require auditor to
notify SED and OSC of suspected fraud
ƒ Manner of payment
ƒ Circumstances when contract terms or procedures may be modified
ƒ Conditions for termination (district should have right to terminate at any time
upon reasonable notice)
ƒ Overall supervision of the contract
ƒ Options for annual contract renewals/extensions up to no more than 5 years
ƒ Indication that services must be subject to a competitive RFP process at least
every 5 years, and that prior experience with the school district may be a factor
taken into account during scoring (i.e. scoring preference may be given to firm
or partner rotation).
9. Explain how and when the district will address questions or communicate
modifications to RFP
ƒ Should be communicated in writing to all respondents
OFFICE OF THE NEW YORK STATE COMPTROLLER
2
23
ƒ Proposals cannot be changed after submission unless subsequent modifications
to RFP by the district make a proposal unresponsive
RFP Requirements
This section specifies the information to be included in the firm’s proposal:
1. Qualifications and experience of the firm
ƒ Size of the firm
ƒ Level and type of auditing experience
ƒ Experience with governmental auditing, including list of prior engagements
ƒ Experience with school district auditing, including list of prior engagements
ƒ Client references
ƒ Peer review
2. Qualifications and experience of the firm’s staff
ƒ Licensing
ƒ Proposed staffing (level, hours)
ƒ Experience of partner or manager in charge
ƒ Experience of audit staff
ƒ Resumes and references (from government or school district sources)
ƒ Affirmation that all staff have met CPE requirements for government auditing
ƒ RFP may include wording that allows school district to reject staff it feels
does not have appropriate experience or qualifications to conduct the audit
3. Proposed work plan
ƒ Interim work and entrance conference
ƒ Details of audit plan, including level of testing, field work, etc.
ƒ Draft report and exit conference
ƒ Final report (must be presented to the district board of education)
ƒ Samples of above items
4. Proposed fee structure
ƒ Hourly rate per audit staff
ƒ Other fees and expenses (do not include RFP preparation, travel or out-ofpocket expenses, etc.)
ƒ Flat rate or “not to exceed” maximum price
ƒ Rates for any optional (desirable) work products
ƒ Distinguish one time costs from ongoing costs
5. Affirmation that no conflicts of interest exist between the firm and the district, its
board or its management
OFFICE OF THE NEW YORK STATE COMPTROLLER
3
24
Organization, Content and Presentation of Proposals
This section provides greater detail as to the format and presentation of the proposal:
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
Title page
Letter of transmittal
Table of contents
Qualifications of the firm and assigned staff
Work plan
Fees
Number of copies required, deadline for submission and mailing instructions
Option for oral RFP presentations if the district so chooses
Evaluation of Proposals
This section details how each RFP will be evaluated:
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
ƒ
“Lowest responsible bidder” –type standard
Specific scoring criteria and weighting factors
Method to evaluate cost portion of RFP
Selection timetables
Circumstances under which a proposal may be disqualified or rejected
Standards for timeliness, quality and performance
District reserves the right to reject all proposals
Results and Contract Award Process
This section should outline the contract award process:
ƒ
ƒ
ƒ
Award notification timeline (generally 45 days after RFP deadline)
Letters to be sent to all respondents
Award should be subject to successful contract negotiations
OFFICE OF THE NEW YORK STATE COMPTROLLER
4
25
NYSSBA Sample Policy 2160
SCHOOL DISTRICT OFFICER AND EMPLOYEE CODE OF ETHICS
The Board of Education is committed to avoiding any situation in which the existence of
conflicting interests of any Board member, officer or employee may call into question the
integrity of the management or operation of the school district. The Board recognizes that sound,
ethical standards of conduct serve to increase the effectiveness of district officers and staff as
educators and public employees in the community. Adherence to a code of ethics promotes
public confidence in the schools and furthers the attainment of district goals.
The Board also recognizes its obligation to adopt a code of ethics setting forth the
standards of conduct required of all Board members, district officers and employees under the
provisions of the General Municipal Law. Therefore, every Board member, officer and
employee of the district, whether paid or unpaid, shall adhere to the following code of ethics.
Statutory Conflicts of Interest
It is a conflict of interest for a Board member, officer or employee to benefit personally
from contracts made in their official capacity.


“Contract” is defined broadly to include any claim or demand against the district or
account or agreement with the district, whether expressed or implied which exceeds the
sum of $750.00 in any fiscal year.
An “interest” is defined as a direct or indirect benefit that runs to the employee as a result
of a contract with the district.
No Board member, officer or employee shall have an “interest” (i.e., receive a direct or
indirect benefit as the result of a contract with the district) in:
1.
2.
3.
4.
a firm, partnership or association in which he/she is a member or employee;
a corporation in which he/she is an officer, director or employee;
a corporation in which he/she, directly or indirectly, owns or controls 5% or more of the
stock;
a contract between the district and his/her spouse, minor child or dependents, except for
an employment contract between the school district, a spouse, minor child or dependent
of a Board member authorized by §800(3) of the General Municipal Law or §3016 of the
Education Law.
NYSSBA Sample Policy
Copyright © 2009 by the New York State School Boards Association, Inc.
Not for further reproduction or posting without the express permission of NYSSBA
26
NYSSBA Sample Policy 2160
NOTE: A code of ethics is required by General Municipal Law § 806(a)(1). Paragraphs one
through four below are drawn directly from the law and are required to be in the code. However,
the law specifically allows the Board to regulate conduct that is not prohibited by law. For
instance, the Board may lower the limit on gifts (found in paragraph 1) to an amount less than
$75. The law also requires the Board to enact a code that touches upon all the subjects detailed
in paragraphs five through seven, but the precise language is not dictated by statute. Therefore,
although the language provided in those paragraphs is recommended, the Board may make
changes to the specific details of these paragraphs. Paragraph 8 is not required, but NYSSBA
offers it to address the potential ethical issues raised by the relationship between the district and
charitable organizations, such as booster clubs, community or educational foundations, etc. The
language offered by NYSSBA is in accordance with an opinion of the OSC (2008-01).
The second paragraph in item 1 concerning gifts from children is optional and offered for
the Board’s consideration
1.
Gifts: A Board member, officer or employee shall not directly or indirectly solicit any
gift or accept or receive any gift having a value of [insert dollar amount, not to exceed
$75] or more, whether in the form of money, services, loan, travel, entertainment,
hospitality, thing or promise, or any other form, under circumstances in which it could
reasonably be inferred that the gift was intended to influence him or her in the
performance of his or her official duties or was intended as a reward for any official
action on his or her part.
However, the Board welcomes and encourages the writing of letters or notes
expressing gratitude or appreciation to staff members. Gifts from children that are
principally sentimental in nature and of insignificant financial value may be accepted in
the spirit in which they are given.
2.
Confidential information: A Board member, officer or employee shall not disclose
confidential information acquired by him or her in the course of his or her official duties
or use such information to further his or her personal interest.
Representation before the Board or District: A Board member, officer or employee shall
not receive or enter into any agreement, expressed or implied, for compensation for
services to be rendered in relation to any matter before the school district.
Disclosure of interest in matters before the Board: A Board member, officer or employee
of the district, whether paid or unpaid, must publicly disclose the nature and extent of any
interest they or their spouse have, will have or later acquire in any actual or proposed
contract, purchase agreement, lease agreement or other agreement involving the school
district (including oral agreements), to the governing body and his/her immediate
supervisor (where applicable) even if it is not a prohibited interest under applicable law.
Such disclosure must be in writing and made part of the official record of the school
district. Disclosure is not required in the case of an interest that is exempted under
Section 803(2) of the General Municipal Law. The term “interest” means a pecuniary or
material benefit accruing to an officer or employee.
3.
4.
NYSSBA Sample Policy
Copyright © 2009 by the New York State School Boards Association, Inc.
Not for further reproduction or posting without the express permission of NYSSBA
27
NYSSBA Sample Policy 2160
5.
6.
7.
8.
Investments in conflict with official duties: A Board member, officer or employee shall
not invest or hold any investment directly in any financial, business, commercial or other
private transaction that creates a conflict with his or her official duties. Exceptions to the
conflict of interest law can be found in Section 802 of the General Municipal Law (see
2160-E.1).
Private employment: A Board member, officer or employee shall not engage in, solicit,
negotiate for or promise to accept private employment when that employment or service
creates a conflict with or impairs the proper discharge of his or her official duties.
Future employment: A Board member, officer or employee shall not, after the
termination of service or employment with the district, appear before the Board in
relation to any action, proceeding, or application in which he or she personally
participated during the period of his or her service or employment or that was under his
or her active consideration.
Involvement with Charitable Organizations: A Board member, officer or employee may
be involved as a volunteer in a charitable organization which has a relationship with the
district. However, if matters come before the Board regarding that organization, for
example the offer of a donation by the charitable organization, the Board member should
disclose their involvement and role with that organization. In addition, the Board
member should not participate in discussions or decisions pertaining to that charitable
organization, unless the Board member is acting in an official capacity as liaison from the
Board to the organization. When participating in activities of the charitable organization,
the Board member, officer or employee shall not make representations on behalf of the
district unless specifically authorized to do so by the Board.
Distribution of Code of Ethics
The Superintendent of Schools shall cause a copy of this Code of Ethics to be distributed
to every member of the Board, every officer and employee of the school district. Each officer
and employee elected or appointed thereafter shall be furnished a copy before entering upon the
duties of his or her office or employment. In addition, the Superintendent shall ensure that a
copy of Article 18 of the General Municipal Law shall be kept posted in each public building
under the district's jurisdiction in a place conspicuous to the district's officers and employees.
Penalties
In addition to any penalty contained in any other provision of law, any person who shall
knowingly and intentionally violate any of the provisions of the Board's code of ethics and its
accompanying regulation may be fined, suspended or removed from office or employment, as
the case may be, in the manner provided by law.
Ref:
General Municipal Law §§806-808
Opn. St. Comp. 2008-01
Adoption date:
NYSSBA Sample Policy
Copyright © 2009 by the New York State School Boards Association, Inc.
Not for further reproduction or posting without the express permission of NYSSBA
28
NYSSBA Sample Policy 6640
INVENTORIES
In accordance with “The Uniform System of Accounts for School Districts” and the
recommendations of the State Comptroller’s Office, an inventory of fixed assets and other
equipment and property valuing over $ (insert amount of money, i.e. 250) of the district shall
be maintained by the business office with the cooperation of all building and department
administrators.
The business office shall develop and maintain a system of internal controls for all fixed
assets and other inventoried district property, including a property register which shall be
updated on an ongoing basis. The business office may use the assistance of outside advisors and
appraisers in carrying out this responsibility.
Ref:
Uniform System of Accounts for School Districts – Fiscal Section
Adoption date:
29
NYSSBA Sample Policy 6660
INDEPENDENT/EXTERNAL AUDITS
NOTE: Each school district (except those employing fewer than eight teachers)
including the city school districts of Buffalo and Rochester must obtain an annual
audit of its records by an external auditor. The external auditor is an independent
certified public accountant (CPA) hired by the district to perform the legally
required financial statements audit in accordance with Government Auditing
Standards The objective of the audit is to render an opinion that the financial
statements are fairly presented. In other words, the auditor determines if the
district’s financial statements are accurate and consistent with accounting
standards so that the board can have confidence in using them to assess the
financial condition of the district.
Chapter 263 of the Laws of 2005 improves the effectiveness of annual
external audits by requiring direct school board involvement and a formal
response to issues raised in the audit.
As required by law, the school district shall obtain an annual audit of its
records by an independent certified public accountant or an independent public
accountant. The report of such annual audit shall be presented to the Board of
Education by such accountant.
The district shall, within 90 days of the receipt of such report or letter,
prepare a corrective action plan in response to any findings contained in the
annual external audit report or management letter, or any final audit report issued
by the state comptroller. This corrective action plan shall be presented to the
Board for review. To the extent practicable, implementation of such corrective
action plan shall begin no later than the end of the next fiscal year.
NOTE: A competitive Request for Proposals (RFP) process for selecting auditors
is required when contracts expire, or at least every five years. The Office of the
State Comptroller (OSC) has guidance available for school district officials on
procuring external audit services using a competitive RFP process, and the State
Education Department (SED) has developed a template for districts that wish to
use it. These documents can be found on OSC and SED websites.
The district shall use a competitive request for proposals (RFP) process
when contracting for such annual audit. In addition, pursuant to law, no audit
engagement shall be for a term longer than five consecutive years; provided,
however, that the district, in its discretion, may permit an independent certified
public accountant or an independent public accountant engaged under an existing
contract for such services to submit a proposal in response to an RFP or to be
awarded a contract to provide such services under a RFP process.
NOTE: While no single contract for external auditing services may be for a
period longer than five years, the law permits a district, in its discretion, to allow
the auditor currently engaged to compete and be awarded a new contract for such
services.
27
30
NYSSBA Sample Policy 6660
NOTE (cont.):
School procurement policies and procedures adopted pursuant to section
104-b of the General Municipal law may need to be amended to be consistent with
this requirement.
Cross-ref:
Ref:
6600, Fiscal Accounting and Reporting
6690, Audit Committees
Education Law §2116-a(3) and (b)
Adoption date:
28
31
Sample Exhibit 6660-E
EXTERNAL AUDIT GUIDANCE FOR SCHOOL DISTRICT OFFICIALS
NOTE: This guidance was developed by the New York State Office of the
Comptroller (OSC). This and other guidance documents relating to fiscal
accountability
can
be
found
on
OSC’s
website
at
www.osc.state.ny.us/localgov/schoolsfa.htm.
The Five Point Plan for increasing school district financial oversight and
accountability includes a provision to enhance the effectiveness of external audits
by:


Requiring CPAs to present audit results directly to school boards.
Require a formal school district response to the management letter and a
corrective action plan for any reportable conditions.
Provide guidance on internal controls and audit testing, including specific
types of testing and suggested level of detail.

The following list provides some specific examples of the audit guidance
that will be helpful to school districts in working with their CPAs in order to
enhance the effectiveness of the audit process and help assure school district
officials that their annual independent audit is providing effective accountability.
The list may be helpful to school board members and district officials as they
participate in the annual financial audit process.
► Prudent use of taxpayer dollars
Goods and services are procured in a manner so as to assure the prudent and
economical use of public moneys in the best interest of the taxpayers.


A comprehensive test of cash disbursements that includes sample testing
of procurement for compliance with laws, rules, regulations and
policies/procedures for competitive purchasing, bidding or use of state or
county contracts. Controls designed to prevent purchasing from businesses
owned or controlled by officers, employees or other related parties should
also be reviewed and tested. Tests of transactions are expected to include
verification that goods or services were properly authorized, received by
the district, charged to the proper appropriation accounts and audited prior
to payment. This testing should include review of requisitions, purchase
orders, receiving slips, vouchers, invoices, cancelled checks, and postings
to the accounting records.
A review of the district’s policies and procedures for procuring goods and
services that are not subject to competitive bidding requirements,
including sample testing of cash disbursements to ensure the district
complied with its procurement policies and acquired goods and services of
maximum quality at the lowest possible cost under the circumstances. This
test will also help assure the district’s procedures guard against favoritism,
fraud and corruption.
29
32
Sample Exhibit 6660-E



Expense reimbursements or other payments to board members,
administrators and other district personnel should be tested to verify
compliance with board policies, reasonableness, appropriateness of
payment, and documentation of expenses.
Expenditures for meals and refreshments at meetings, cell phones and
purchases with credit cards should be reviewed for reasonableness.
A comprehensive test of payroll disbursements that includes verification
of the existence of the employee, authorization, time worked, accuracy of
rates, overtime payments and distributions to appropriate expenditure
categories by tracing from time records through the payroll records to the
cancelled check. Testing of accounting records should also be performed
such as payroll summaries and payments of taxes and other withholdings.
► Sound internal control structure
A sound internal control structure is in place and internal controls are
appropriately designed and operating effectively.





A sufficient understanding of the school district’s system of internal
controls including the district’s control environment, control activities,
system for risk assessment, information and communication, and
monitoring. This audit procedure should also include a documented
understanding of controls over the school district’s computer systems that
are significant to audit objectives.
Testing of controls deemed significant to the audit’s objectives. For
example: observing district personnel actually performing the control
procedures in the regular course of operations; examining documents and
looking for evidence of approvals, sign-offs, etc.; and replicating a control
procedure to test whether it was applied correctly.
Analytical procedures should be performed to identify unusual trends,
activities or transactions. Revenue and expenditure trends should be
reviewed over a number of years, and significant budget variances
investigated. Control and detail records for budget, revenue, payroll,
procurement, capital project and capital asset activities should be scanned
for questionable trends or entries, and unusual items investigated.
A sample of budget amendments should be checked to verify they were
completed before appropriations were over-expended to verify budget
control over district expenditures.
Documentation of how the evaluation of the district’s control structure and
the results of the analytical reviews will affect the audit approach for
testing of controls and tests of transactions. This documentation should
include the auditor’s consideration of the risk of fraud, illegal acts, abuse,
or violations of contract/grant provisions, and the impact these risks will
have on audit testing.
30
33
Sample Exhibit 6660-E
► Assets are safeguarded
School district assets are safeguarded against loss, waste and abuse.



Verification that a current asset inventory system is in place.
Physical inspection of assets and personal property items, especially those
items most susceptible to theft and abuse (e.g. computers, televisions,
video equipment).
Verification of adequacy of insurance coverage for assets and for
employees with authorized access to those assets.
Adoption date:
31
34
NYSSBA Sample Policy 6680
INTERNAL AUDIT FUNCTION
NOTE: The internal audit function assists the Board in ensuring that proper
internal controls are in place and are working. The Education Law requires
school districts no later than July 1, 2006 to establish an internal audit function
to be in operation no later than the following December 31st.
School districts of less than eight teachers, districts with actual general
fund expenditures totaling less than $5 million in the previous school year, and
districts with an enrollment of less than 300 students in the previous school year
are exempt from this requirement. However, such districts must annually certify
to the Commissioner of Education that the district meets the requirements for
exemption (see subdivision (2) of section 2116-b of the Education Law).
The Board of Education recognizes its responsibility to ensure sound fiscal
management of the district. To this end, the Board establishes an internal audit
function to carry out the following tasks:

Develop an annual risk assessment of district fiscal operations which shall
include but not be limited to:
a. a review of financial policies and procedures,
b. the testing and evaluation of district internal controls;

An annual review and update of such risk assessment; and

Prepare reports, at least annually or more frequently as the Board may
direct, which:
a. analyze significant risk assessment findings,
b. recommend changes for strengthening controls and reducing
identified risks, and
c. specify timeframes for implementation of such recommendations.
To fulfill this function, the district may use inter-municipal cooperative
agreements, BOCES shared services, or independent contractors as long as such
personnel or entities performing the internal audit function comply with the
Regulations of the Commissioner and meet professional auditing standards for
independence between the auditor and the district. The district may also use
existing personnel to fulfill this function but only if such persons shall not have
any responsibilities for other business operations of the district while performing
such function.
NOTE: Whether the Board decides to use an employee or other entity as the
internal auditor, in each instance, the Board must consider the independence
issues associated with the internal auditor in order to prevent any perceived or
actual conflicts of interest.
16
35
NYSSBA Sample Policy 6680
NOTE (cont.):
Before a Board hires an internal auditor, it should ensure that the person
or firm being hired has or can develop expertise in school district financial
operations, legal mandates, purchasing and investment policies, accounting
systems and procedures, and other areas that are deemed necessary. The Board
needs to ensure that the internal auditor receives training in these areas as
appropriate.
Personnel or entities performing this function shall report directly to the
Board. The district’s audit committee shall assist in the oversight of this internal
audit function.
Cross-ref:
6690, Audit Committee
Ref: Education Law §2116-b
Adoption date:
17
36
NYSSBA Sample Policy 6690
AUDIT COMMITTEE
NOTE: Education Law §2115-c requires each school district, except those
districts employing fewer than eight teachers, to establish an audit committee by
January 1, 2006 by resolution of the Board. The role of the audit committee is to
advise the board on issues relating to the district’s external and internal audit
functions. However, the ultimate responsibility for review and action on audit
reports remains with the full board.
The audit committee may be structured as: (1) a sub-committee of the
Board, (2) a committee of the whole board; or (3) an advisory committee that may
include or be comprised entirely of non-Board members, if the Board deems that
such composition is advisable to providing the requisite accounting, auditing and
financial reporting expertise.
The policy has been updated to include a provision addressing executive
session, which is underlined below.
The Board of Education will designate and appoint an Audit Committee
for purposes of overseeing and carrying out the Board’s audit policies and the
performance of related duties and responsibilities.
The district’s Audit
Committee shall be comprised of at least three members. At least three members
shall be appointed to serve on the committee on an annual basis. Employees of
the school district are prohibited from serving on the committee.
NOTE: Although audit committee members are considered district office-holders
under the law so that they can be covered by district policies and indemnity
powers, they may be selected from outside of the district in order to ensure the
appropriate level of expertise and experience. Committee members must serve
without compensation but are allowed reimbursement for any actual and
necessary expenses incurred in relation to attendance at committee meetings.
Employees of the district are prohibited from serving on the audit committee.
The Audit Committee shall:
1.
2.
3.
4.
Recommend internal and external audit plans to the Board,
specifying the areas of District operations to be reviewed for
compliance with legal and regulatory requirements, operating
efficiency and effectiveness;
Receive and review the resulting audit reports; and propose
recommendations to the Board for action as may be necessary and
appropriate;
Receive and review the report of the external auditor on any
findings commented on during the annual audit report, and the
management response thereto, and propose recommendations to
the Board for action as may be necessary and appropriate;
Oversee the selection of the internal auditor and the external
auditor, pursuant to the relevant Board policies, and make
recommendations to the Board for appointment to said positions;
and
1
37
NYSSBA Sample Policy 6690
5.
Perform any other responsibilities outlined by the Board and/or as
listed in the District’s Audit Committee Charter (see attached
exhibit, 6690-E).
The audit committee may conduct an executive session in accordance with
law and Commissioner’s regulation. Any member of the board of education who
is not a member of the audit committee may be allowed to attend an executive
session if authorized by a resolution of the board of education.
It is not the intent of the Board of Education that the Audit Committee
participate in or be responsible for the day to day operations of the school district
or in the decisions that are the responsibility of the Superintendent of Schools or
Assistant Superintendent for Business, or the other district administrators.
Ref:
Education Law §2116-c
8 NYCRR §170.12 (d)
Adoption date:
2
38
Sample Exhibit 6690-E
AUDIT COMMITTEE CHARTER TEMPLATE
NOTE: NYSSBA has updated the audit committee charter template because the
one issued three years ago was completed before the Office of the State
Comptroller finalized its version and before the issuance of the Commssioner’s
most recent regulations. This version is not substantively different, but language
has been clarified and simplified in some instances. Two items that have been
changed are the addition of language addressing executive session and eligibility
for membership has been brought into conformance with OSC’s template. Please
note that NYSSBA’s template is not identical to the Comptroller’s Office version.
NYSSBA offers some additional provisions for the Board’s consideration. The
OSC’s
charter
template
is
available
on
their
website
at:
http://www.osc.state.ny.us/localgov/schoolsfa/accharter.pdf
All italicized sample wording represents statutory requirements
contained in Education Law §2116-c or Commissioner’s Regulations (§170.12).
All other (non-italicized) sample wording should be tailored or modified to
meet the requirements and guidance developed by the trustees or board of
education of each district.
Audit Committee Authority
Pursuant to resolution number [insert number of resolution], dated
[insert date of resolution], the Board of Education of the [insert name of
district] has established an audit committee to assist the Board of Education in
the oversight of both the internal and external audit functions. The requirement to
create an audit committee was established by Education Law §2116-c. According
to §2116-c(4), the role of an audit committee shall be advisory and any
recommendations it provides to the Board shall not be substituted for any
required review and acceptance by the Board of Education. The District’s
resolution also states that [insert any other relevant wording from the
establishing resolution for your district].
Mission
The Board of Education has established an audit committee to provide
independent assistance to the Board in the oversight of the following matters:
•
•
•
•
Assist the Board in providing oversight of the internal and external audit
functions, including the appointment of the internal and external auditors.
Oversee the competitive Request for Proposal Process (RFP) used to
solicit quotations for the District’s annual external audit.
Review the scope, plan and coordination of the external audit.
Provide a communications link between the external and internal auditors
and the Board.
3
39
6690-E
Composition and Requisite Skills
The District’s Audit Committee is comprised of [insert number of members
must be at least three]. The committee shall include:
[insert composition of the audit committee as established by the Trustees or
the Board of Education]
The Committee members collectively should possess the expertise and
experience in accounting, auditing, financial reporting and school district finances
needed to understand and evaluate the school district’s financial statements, the
external audit of those statements and the district’s internal audit activities.
Accordingly, the Audit Committee’s members should:
•
•
•
Possess the requisite skills and experience necessary to understand
technical and complex financial reporting issues.
Have the ability to communicate with, and offer advice and assistance to,
public finance officers and auditors.
Be knowledgeable about internal controls, financial statement audits and
management/operational audits.
Duties and Responsibilities
The duties and responsibilities of the District’s Audit Committee include the
following:
•
External Audit Focus
NOTE: All but item 4 below are statutory requirements contained in Education
Law §2116-c.
o
o
o
o
o
Provide recommendations regarding the selection of the external auditor
to the Board of Education.
Meet with the external auditor prior to commencement of the audit to
review the engagement letter.
Review and discuss with the external auditor any risk assessment of the
district’s fiscal operations developed as part of the auditor’s
responsibilities under governmental auditing standards for a financial
statement audit and federal single audit standards, if applicable.
Review the external auditor’s assessment of the district’s system of
internal controls.
Receive and review the draft annual audit report and accompanying draft
management letter and, working directly with the external auditor, assist
the Board of Education in interpreting such documents.
4
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o
o
Make a recommendation to the Board of Education on accepting the
annual audit report.
Review every corrective action plan developed by the school district and
assist the Board of Education in the implementation of such plans.
• Internal Audit Focus
NOTE: All but item 3 and part of item 4 below are statutory requirements
contained in Education Law §2116-c.
o
o
Make recommendations to the Board of Education regarding the
appointment of the internal auditor.
Assist in the oversight of the internal audit function.
Review the annual internal audit plan to ensure that high risk areas and
key control activities are periodically evaluated and tested.
Review the results of internal audit activities and significant
recommendations and findings of the internal auditor.
Monitor implementation of the internal auditor’s recommendations by
management.
Provide input on the performance evaluation of the internal auditor.
•
Administrative Matters
o
o
o
Hold regularly scheduled meetings.
Administer other related duties as prescribed by the Board of Education.
Review and revise the Audit Committee Charter.
o
o
o
o
Membership
The membership duties of the [insert name of district] Audit Committee
includes the following:
• Good Faith – Members of the Committee shall perform their duties in
good faith, in a manner they reasonably believe to be in the best
interests of the Committee and the District with such care as a
generally prudent person in a similar position would use under
similar circumstances.
• Independence – The following individuals are precluded from being an
Audit Committee member:
o
o
Someone currently employed by the District
Someone currently or previously providing goods or
services to the District during the past two years.
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o
o
Someone of the immediate family (spouse, spouse
equivalent or dependent, whether or not related) or close
family member (parent, sibling or nondependent child) of
an individual who is an employee, officer or contractor
providing goods or services to the district.
Someone who is the owner of or has a direct and material
interest in a company providing goods or services to the
district.
• Confidentiality – During the exercise of duties and responsibilities, the
Committee members may have access to confidential information. The
Committee shall have an obligation to the district to maintain the
confidentiality of such information.
• Oath of Office - All non-board members, who are members of the Audit
Committee, should be administered the district’s oath of office by the
District Clerk.
Meetings and Notification
The [insert name of district] Audit Committee shall meet a minimum of [insert
number] times each year. An agenda of each meeting should be clearly
determined in advance and the Audit Committee should receive supporting
documents in advance, for reasonable review and consideration. The audit
committee may conduct an executive session in accordance with law and
Commissioner’s regulation. Any member of the board of education who is not a
member of the audit committee may be allowed to attend an executive session if
authorized by a resolution of the board of education.
The Audit Committee shall prepare minutes of each meeting. At a
minimum, the minutes will include the following:
• Copies of the meeting agenda
• Date, attendance and location of the meeting
• As appropriate, brief summary of the topics discussed
• Except as otherwise provided by law in connection with executive
session, copies of materials discussed or presented at the meeting
• A record of all actions or recommendations agreed to by the committee
Decision-Making Process
A quorum constitutes a simple majority of the total membership and meetings
will not be conducted unless a quorum is present. All decisions shall be reached
by vote of a simple majority of the total membership.
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Reporting Requirements
The [insert name of district] Audit Committee has the duty and
responsibility to report its activities to the Board of Education. Periodic written
reports of Audit Committee activities are an important communication link
between the Audit Committee and the Board on key decisions and
responsibilities. The Audit Committee’s reporting requirements are to:
• Report on the scope and breadth of committee activities so that the Board
of Education is kept informed of its work.
• Provide minutes of meetings which clearly record the actions and
recommendations of the Committee.
• Report on their review of the District’s draft annual audit report and
accompanying management letter and their review of significant
findings and recommendations of the internal auditor.
• Report on suspected fraud or abuse or material defects in the internal
control systems.
• Report on indication of material or significant non-compliances with
laws or District policies and regulations.
• Report on any other matters that should be disclosed to the Board of
Education.
Review of the Charter
The [insert name of district] Audit Committee shall assess and report to
the Board of Education on the adequacy of this Charter no less than an annual
basis or as necessary. Charter modifications, as recommended by the Audit
Committee, should be presented to the Board of Education in writing for their
review and action.
Adoption date:
7
43
NYSSBA Sample Policy 6700
PURCHASING
NOTE: This sample policy provides a comprehensive overview of the issues that
Boards should address in the matter of district purchasing. General Municipal
Law §104-b requires that boards of education adopt a policy regarding the
purchasing or procurement of goods and services that are not subject to
competitive bidding, and that boards conduct an annual review of this policy.
The Board of Education views purchasing as serving the educational
program by providing necessary supplies, equipment and related services.
Purchasing will be centralized in the business office under the general supervision
of the Purchasing Agent designated by the Board.
It is the goal of the Board to purchase competitively, without prejudice or
favoritism, and to seek the maximum educational value for every dollar expended.
Competitive bids or quotations shall be solicited in connection with purchases
pursuant to law. The General Municipal Law requires that purchase contracts for
materials, equipment and supplies involving an estimated annual expenditure
exceeding $10,000 and public work contracts involving an expenditure of more
than $20,000 will be awarded only after responsible bids have been received in
response to a public advertisement soliciting formal bids. Similar procurements
to be made in a fiscal year will be grouped together for the purpose of
determining whether a particular item must be bid.
NOTE: As required by the Individuals with Disabilities Education Act (IDEA)
and Section 504 of the Rehabilitation Act of 1973, a student who needs an
accommodation to instructional materials because of his or her disability must be
provided with such materials in the alternative format needed by the student.
Chapter 377 of the Laws of 2001 requires that each school district and BOCES
revise its procurement policies to give a preference in the purchase of
instructional materials to vendors who agree to provide materials in alternative
formats.
In accordance with law, the district shall give a preference in the purchase
of instructional materials to vendors who agree to provide materials in alternative
formats. The term “alternative format” shall mean any medium or format for the
presentation of instructional materials, other than a traditional print textbook, that
is needed as an accommodation for a disabled student enrolled in the district (or
program of a BOCES), including but not limited to Braille, large print, open and
closed captioned, audio, or an electronic file in a format compatible with
alternative format conversion software that is appropriate to meet the needs of the
individual student.
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6700
NOTE: The following paragraph has been added to reflect State Education law
§409-i and State Finance Law §163-b regarding the purchase of green cleansers.
The Board is also aware of the need to reduce exposure of students and
staff to potentially harmful chemicals and substances used in cleaning and
maintenance. In accordance with law, regulation and guidelines set forth by the
Office of General Services (OGS), the district will purchase and utilize
environmentally sensitive cleaning and maintenance products in its facilities
whenever feasible. Cleansers purchased must, first and foremost, be effective so
that the district may continue to purchase non-green products as necessary.
Environmentally sensitive cleaning and maintenance products will be procured in
accordance with standard purchasing procedures as outlined in this policy and
regulation.
Goods and services which are not required by law to be procured by the
district through competitive bidding will be procured in a manner so as to ensure
the prudent and economical use of public monies, in the best interests of the
taxpayers, to facilitate the acquisition of goods and services of maximum quality
at the lowest possible cost under the circumstances, and to guard against
favoritism, improvidence, extravagance, fraud and corruption.
Alternative proposals or quotations will be secured by requests for
proposals, written or verbal quotations or any other appropriate method of
procurement, except for procurements:
1.
2.
3.
4.
under a county contract;
under a state contract;
of articles manufactured in state correctional institutions; or
from agencies for the blind and severely disabled.
The district's purchasing activity will strive to meet the following
objectives:
1.
2.
3.
4.
to effectively supply all administrative units in the school system with
needed materials, supplies, and contracted services;
to obtain materials, supplies and contracted services at the lowest prices
possible consistent with the quality and standards needed as determined by
the Purchasing Agent in conformance with state law and regulation and in
cooperation with the requisitioning authority. The educational and
physical welfare of the students is the foremost consideration in making
any purchase;
to ensure that all purchases fall within the framework of budgetary
limitations and that they are consistent with the educational goals and
programs of the district;
to maintain an appropriate and comprehensive accounting and reporting
system to record and document all purchasing transactions; and
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6700
5.
to ensure, through the use of proper internal controls, that loss and/or
diversion of district property is prevented.
Opportunities shall be provided to all responsible suppliers to do business
with the school district. Suppliers whose place of business is situated within the
district may be given preferential consideration only when bids or quotations on
an item or service are identical as to price, quality and other factors. Purchases
will be made through available cooperative BOCES bids, state contracts of the
Office of General Services or county contracts whenever such purchases are in the
best interests of the district. In addition, the district will make purchases from
correctional institutions and severely disabled persons through charitable or nonprofit-making agencies, as provided by law.
The district will provide justification and documentation of any contract
awarded to an offeror other than the lowest responsible dollar offeror, setting
forth the reasons why such award is in the best interests of the district and
otherwise furthers the purposes of section 104-b of the General Municipal Law.
The Purchasing Agent will not be required to secure alternative proposals
or quotations for:
1.
2.
3.
emergencies where time is a crucial factor;
procurements for which there is no possibility of competition (sole source
items); or
very small procurements when solicitations of competition would not be
cost-effective.
The Superintendent of Schools, with the assistance of the Purchasing
Agent, shall be responsible for the establishment and implementation of the
procedures and standard forms for use in all purchasing and related activities in
the district. Such procedures shall comply with all applicable laws and
regulations of the state and the Commissioner of Education.
No Board member, officer or employee of the school district shall have an
interest in any contract entered into by the Board or the district, as provided in
Article 18 of the General Municipal Law.
Comments will be solicited from those administrators involved in the
procurement process before enactment of the district’s policies regarding
purchasing and from time to time thereafter. The policies must then be adopted
by Board resolution. All district policies regarding the procurement processes
will be reviewed by the Board at least annually.
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6700
The unintentional failure to fully comply with the provisions of section
104-b of the General Municipal Law or the district’s policies regarding
procurement will not be grounds to void action taken nor give rise to a cause of
action against the district or any officer or employee of the district.
Ref:
Education Law §§305(14); 409-i; 1604(29-a); 1709(4-a)(9)(14)(22);
2503(7-a); 2554(7-a)
General Municipal Law §§102; 103; 104-b; 109-a; 800 et seq.
State Finance Law 163-b
Adoption date:
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6700-R
PURCHASING REGULATION
NOTE: The sample regulations provide the specific detail and appropriate
processes that must be followed by statute and regulations regarding purchasing
activities in a school district. Boards should see that this information is provided
to and carefully reviewed by Superintendents, School Business Officials,
Purchasing Agent, and all personnel involved in purchasing in the district.
The following sets forth the procedures for the procurement of goods and
services by the district:
I.
Definitions
Purchase Contract: a contract involving the acquisition of commodities,
materials, supplies or equipment
Public Work Contract: a contract involving services, labor or construction
II.
General Municipal Law
The General Municipal Law requires that purchase contracts for materials,
equipment and supplies involving an estimated annual expenditure
exceeding $10,000 and public work contracts involving an expenditure of
more than $20,000 will be awarded only after responsible bids have been
received in response to a public advertisement soliciting formal bids.
Similar procurements to be made in a fiscal year will be grouped together
for the purpose of determining whether a particular item must be bid.
III.
Competitive Bidding Required
A.
Method of Determining Whether Procurement is Subject to
Competitive Bidding
1.
2.
3.
The district will first determine if the proposed
procurement is a purchase contract or a contract for public
work.
If the procurement is either a purchase contract or a
contract for public work, the district will then determine
whether the amount of the procurement is above the
applicable monetary threshold as set forth above.
The district will also determine whether any exceptions to
the competitive bidding requirements (as set forth below)
exist.
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6700-R
B.
Contract Combining Professional Services and Purchase
In the event that a contract combines the provision of professional
services and a purchase, the district, in determining the appropriate
monetary threshold criteria to apply to the contract, will determine
whether the professional service or the purchase is the predominant
part of the transaction.
C.
Opening and Recording Bids; Awarding Contracts
The Purchasing Agent will be authorized to open and record bids.
Contracts will be awarded to the lowest responsible bidder (as
recommended by the Purchasing Agent), who has furnished the
required security after responding to an advertisement for sealed
bids.
D.
Documentation of Competitive Bids
The district will maintain proper written documentation which will
set forth the method in which it determined whether the
procurement is a purchase or a public work contract. Proper
written documentation will also be required when a contract is not
awarded to the vendor submitting the lowest quote, setting forth
the reasons therefore. A quote which exceeds the bid limit will be
awarded only when such award is in the best interests of the
district and otherwise furthers the purposes of section 104-b of the
General Municipal Law. The district will provide justification and
documentation of any such contract awarded.
E.
Purchase of Instructional Materials
In accordance with Education Law the district shall give a
preference in the purchase of instructional materials to vendors
who agree to provide materials in alternative formats (i.e., any
medium or format for the presentation of instructional materials,
other than a traditional print textbook, that is needed as a
accommodation for a disabled student enrolled in the district,
including but not limited to Braille, large print, open and closed
captioned, audio or an electronic file in an approved format.)
The district will establish and follow a plan to ensure that every
student with a disability who needs his or her instructional
materials in an alternative format will receive those materials at the
same time that they are available to non-disabled students.
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6700-R
F.
Leases of Personal Property
In addition to the above-mentioned competitive bidding
requirements, section 1725 of the Education Law requires that the
district will be subject to competitive bidding requirements for
purchase contracts when it enters into a lease of personal property.
Documentation: The district will maintain written documentation
such as quotes, cost-benefit analysis of leasing versus purchasing,
etc.
G.
Environmentally-Sensitive Cleaning and Maintenance Products
The district will purchase and utilize environmentally sensitive
cleaning and maintenance products whenever feasible. The
purchasing agent will consult with the Green Guidelines provided
by the Office of General Services.
Any legal issues regarding the applicability of competitive bidding
requirements will be presented to the school attorney for review.
IV.
Exceptions to Competitive Bidding Requirements
The district will not be subject to competitive bidding requirements when
the Board of Education, in its discretion, determines that one of the
following situations exists:
1.
emergency situations where:
a.
b.
c.
the situation arises out of an accident or unforeseen
occurrence or condition;
a district building, property, or the life, health, or safety of
an individual on district property is affected; or
the situation requires immediate action which cannot await
competitive bidding.
However, when the Board passes a resolution that an emergency
situation exists, the district will make purchases at the lowest
possible costs, seeking competition by informal solicitation of
quotes or otherwise, to the extent practicable under the
circumstances.
Documentation: The district will maintain records of verbal (or
written) quotes;
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6700-R
2.
when the district purchases surplus or second-hand supplies,
materials or equipment from the federal or state governments or
from any other political subdivision or public benefit corporation
within the state.
Documentation:
The district will maintain market price
comparisons (verbal or written quotes) and the name of the
government entity;
3.
when the Board separately purchases eggs, livestock, fish and
dairy products (other than milk), juice, grains and species of fresh
fruits and vegetables directly from producers or growers. The
amount expended in any fiscal year by the district may not exceed
an amount equal to fifteen cents multiplied by the number of days
in the school year multiplied by the total enrollment of the district.
Documentation:
The district will maintain documentation
consistent with sections 114.3 of the Regulations of the
Commissioner of Education;
4.
when the Board separately purchases milk directly from licensed
milk processors employing less than forty (40) people. The
amount expended in any fiscal year by the district may not exceed
an amount equal to twenty-five cents multiplied by the number of
days in the school year multiplied by the total enrollment of the
district or exceed the current market price.
Documentation: The district will maintain documentation
consistent with section 114.4 of the Regulations of the
Commissioner of Education;
5.
when the district purchases goods, supplies and services from
municipal hospitals under joint contracts and arrangements entered
into pursuant to section 2803-a of the Public Health Law.
Documentation: The district will maintain the legal authorization,
Board authorization and market price comparisons; or
6.
when there is only one possible source from which to procure
goods or services required in the public interest.
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6700-R
Documentation: The district will maintain written documentation
of the unique benefits of the item or service purchased as
compared to other items or services available in the marketplace;
that no other item or service provides substantially equivalent or
similar benefits; and that, considering the benefits received, the
cost of the item or service is reasonable, when compared to
conventional methods. In addition, the documentation will provide
that there is no possibility of competition for the procurement of
the goods.
V.
Quotes When Competitive Bidding Not Required
Goods and services which are not required by law to be procured by the
district through competitive bidding will be procured in a manner so as to
ensure the prudent and economical use of public monies in the best
interests of the taxpayers. Alternative proposals or quotations will be
secured by requests for proposals, written or verbal quotations or any other
appropriate method of procurement, as set forth below.
A.
Methods of Documentation
1.
2.
3.
Verbal Quotations: the telephone log or other record will
set forth, at a minimum, the date, item or service desired,
price quoted, name of vendor, name of vendor’s
representative;
Written Quotations: vendors will provide, at a minimum,
the date, description of the item or details of service to be
provided, price quoted, name of contact. For example, with
regard to insurance, the district will maintain
documentation that will include bid advertisements,
specifications and the awarding resolution. Alternatively,
written or verbal quotation forms will serve as
documentation if formal bidding is not required. “Requests
for Proposals” (RFPs), documented in the same manner as
described herein, may also be used;
Requests for Proposals: the district will contact a number
of professionals (e.g., architects, engineers, accountants,
lawyers, underwriters, fiscal consultants, etc.) and request
that they submit written proposals. The RFPs may include
negotiations on a fair and equal basis. The RFPs and
evaluation of such proposals will consider price plus other
factors such as:
a.
b.
the special knowledge or expertise
professional or consultant service;
the quality of the service to be provided;
of
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the
52
6700-R
c.
d.
the staffing of the service; and
the suitability for the district’s needs.
The district will first locate prospective qualified firms by:
a.
advertising in trade journals;
b.
checking listings of professionals; or
c.
making inquiries of other districts or other
appropriate sources.
The district will then prepare a well-planned RFP which will
contain critical details of the engagement, including the methods
which it will use in selecting the service.
B.
Purchases/Public Work: Methods of Competition to be Used for
Non-Bid Procurements; Documentation to be Maintained
The district will require the following methods of competition be
used and sources of documentation maintained when soliciting
non-bid procurements in the most cost-effective manner possible:
1.
2.
3.
4.
5.
Purchase Contracts up to $10,000
a.
Contracts from $100 to $1,000: Verbal quotes
Documentation will include notations of verbal
quotes.
b.
Contracts in excess of $1,000 to $10,000: Written
quotes
Public Work Contracts up to $20,000
a.
Contracts from $1,000 to $5,000: Verbal quotes
Documentation will include notations of verbal
quotes.
b.
Contracts in excess of $10,000 to $20,000: Written
quotes
Emergencies: Verbal quotes
Documentation will include notations of verbal quotes.
Insurance: Written quotes
Documentation will include bid advertisements,
specifications and the awarding resolution. Alternatively,
written or verbal quotation forms will serve as
documentation if formal bidding is not required. “Requests
for Proposals” (RFPs), documented in the same manner as
described herein, may also be used.
Professional Services: RFP
Documentation will include written proposals.
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6700-R
6.
7.
8.
9.
10.
VI.
Leases of Personal Property: Written quotes
Documentation will include written quotes, cost-benefit
analysis of leasing versus purchasing, etc. The district will
note that the contract is a true lease and not an installment
purchase contract.
Second Hand Equipment from Other Governments:
Written quotes
Documentation will include market price comparisons
(verbal or written quotes) and the name of the government.
Certain Food and Milk Purchases: Written quotes
Documentation will be consistent with sections 114.3 and
114.4 of the Regulations of the Commissioner of
Education.
Certain Municipal Hospital Purchases: RFP
Documentation will include the legal authorization, Board
authorization, and market price comparisons.
Sole Source: Written or verbal quotes
Documentation will include, among other things, the
unique benefits of the patented item as compared to other
items available in the marketplace; that no other item
provides substantially equivalent or similar benefits; and
that considering the benefits received, the cost of the item
is reasonable, when compared to conventional methods.
Notations of verbal quotes will be maintained by the
district. In addition, the district will document that there is
no possibility of competition for the procurement of the
goods.
Quotes Not Required When Competitive Bidding Not Required
The district will not be required to secure alternative proposals or
quotations for those procurements:
1.
2.
3.
4.
under a county contract;
under a state contract;
of articles manufactured in state correctional institutions; or
from agencies for the blind and severely disabled.
In addition, the district will not be required to secure such alternative
proposals or quotations for:
1.
2.
emergencies where time is a crucial factor;
procurements for which there is no possibility of competition (sole
source items);
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6700-R
3.
4.
VII.
procurements of professional services, which, because of the
confidential nature of the services, do not lend themselves to
procurement through solicitation; or
very small procurements when solicitations of competition would
not be cost-effective.
Procurements from Other than the “Lowest Responsible Dollar Offeror”
The district will provide justification and documentation of any contract
awarded to an offeror other than the lowest responsible dollar offeror,
setting forth the reasons why such award is in the best interests of the
district and otherwise furthers the purposes of section 104-b of the General
Municipal Law.
VIII.
Internal Control
The Board authorizes the Superintendent of Schools, with the assistance of
the Purchasing Agent, to establish and maintain an internal control
structure to ensure, to the best of their ability, that the district’s assets will
be safeguarded against loss from unauthorized use or disposition, that
transactions will be executed in accordance with the law and district
policies and regulations, and recorded properly in the financial records of
the district.
Comments will be solicited from those administrators involved in the
procurement process before enactment of the district’s regulations
regarding purchasing and from time to time thereafter. The regulations
must then be adopted by Board resolution. All district regulations
regarding the procurement processes will be reviewed by the Board at
least annually.
The unintentional failure to fully comply with the provisions of section
104-b of the General Municipal Law or the district’s regulations regarding
procurement will not be grounds to void action taken or give rise to a
cause of action against the district or any officer or employee of the
district.
Adoption date:
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55
NYSSBA Sample Policy 6710
PURCHASING AUTHORITY
NOTE: It is essential that the authority and responsibility for all purchasing functions be
delegated by the Board of Education to one official or employee, whose duty is is to oversee and
coordinate all district purchasing and related activities.
The Board of Education designates the School Business Manager Purchasing Agent for
the school district. The Purchasing Agent will be responsible for administering all purchasing
activities and ensuring the quality and quantity of purchases made by the district.
All purchases shall be made through the Purchasing Agent.
The Purchasing Agent is authorized to issue purchase orders without prior approval of the
Board when formal bidding procedures are not required by law and budget appropriations are
adequate to cover such obligations.
The Purchasing Agent shall be responsible for preparing all bid specifications and a
statement of general bidding conditions to be included in every notice or invitation to bid. If
there are questions concerning specifications, the Purchasing Agent will consult with the
requisitioner to clarify the matter so as to ensure that the appropriate goods or services are
obtained.
Ref:
Education Law §1709(20-a)
Adoption date:
56
NYSSBA Sample Policy 6830
EXPENSE REIMBURSEMENT
NOTE: Boards of Education are authorized to reimburse Board members, officers and
employees for expenses reasonably, actually and necessarily incurred in the performance of
their duties, provided they comply with required procedures. This sample policy and
accompanying regulation set out some guidelines and procedures for the Board’s consideration.
School district employees, officials and members of the Board of Education will be
reimbursed for reasonable, actual and necessary out-of-pocket expenses which are legally
authorized and incurred while traveling for school related activities.
Note: The Board may set the mileage rate for use of private vehicles for school business.
Usually this is done at the annual reorganizational meeting. Although it is not required, many
boards set the rate at the current rate fixed by the federal IRS for business travel. If your rate
differs, please amend the text below.
Only expenses necessary to the purpose of the travel shall be reimbursable.
Transportation costs such as taxi cabs are allowable only for essential transportation. Mileage
will be paid at the rate fixed by the federal Internal Revenue Service for business travel. Tax
exemption certificates shall be issued and utilized as appropriate.
The Board, by majority vote, shall determine and approve which meetings and
conferences may be attended by Board members and the Superintendent of Schools. [Please note
that if the Board wishes to have the Board President or Superintendent authorize attendance
at meetings or conferences, this paragraph must be modified to reflect that.]
The Superintendent shall determine, in the first instance, whether attendance by district
staff at any conference or professional meeting is in the best interest of the district and eligible
for reimbursement of expenses under this policy.
To obtain reimbursement, the claimant must complete and sign an expense voucher,
attach all receipts or other expense documentation, together with a copy of the approved
conference attendance request form and evaluation report (if required), and submit the same to
the appropriate administrator. Reimbursement shall only be made after such claim has been
audited and allowed.
Regulations concerning expense reimbursement shall be attached to this policy and shall
be reviewed annually and revised as appropriate.
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57
NYSSBA Sample Policy 6830
Ref:
Education Law §§1604(27); 1709(30); 1804; 2118; 3023; 3028
General Municipal Law §77-b
Adoption date:
NYSSBA Sample Policy
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58
NYSSBA Sample Regulation 6830-R
EXPENSE REIMBURSEMENT REGULATION
NOTE: It is good business practice for school districts to adopt local rules addressing travel,
meals and other administrative expenses.
This is a sample regulation only. The district should amend it to reflect its own procedures.
The district shall reimburse district employees, officials and members of the Board of
Education for reasonable, actual and necessary out-of-pocket expenses incurred while traveling
for school-related business upon receipt of a completed voucher with itemized receipts along
with approved attendance form. The following rules shall guide the reimbursement of schoolrelated travel expenses:
NOTE: These rules would be subject to anything inconsistent in collective bargaining
agreements.
Transportation




Travel shall be by the most economical method, whether by private automobile, school
vehicle or common carrier such as bus, train or plane.
If travel is by private automobile, mileage shall be reimbursed at the level approved by
the Internal Revenue Service for business travel. Parking and tolls will also be
reimbursed but gasoline will not.
Rental car expenses will be reimbursed only if authorized in advance. Receipts must be
attached.
Air travel is only allowed when determined by the Board President or the Superintendent
to be in the district’s best interest. Air travel shall be reimbursed at the lowest feasible
fare available and shall not exceed regular coach class fare. Travel arrangements should
be made as soon as reasonably practicable so as to avoid payment of a higher fare due to
a late booking.
Lodging
NOTE: By law, a district can only reimburse employees for lodging charges which were actually
incurred. However, the district may wish to set a maximum lodging rate for which they will
reimburse notwithstanding the amount actually charged for the room. To that end, the district
may wish to use the federal travel reimbursement rates which are also used by the New York
State government to set such a maximum rate.
These rates can be found at
http://policyworks.gov/org/main/mt/homepage/mtt/perdiem/perd05d.html
The rates for lodging (and for meals and incidental expenses) vary by county and major cities.
These federal/state rates do not apply specifically to school districts; however, they do serve as
good general guidelines.
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NYSSBA Sample Regulation 6830-R

Persons traveling on district-related business are expected to secure the most reasonable
rate for necessary hotel accommodations. The district will reimburse for actual lodging
fees up to the maximum lodging fee set by the federal government for that location.

When the rate is pre-determined by the organization sponsoring the event, the traveler
shall secure a room rate at no more than the pre-determined rate notwithstanding what the
federal travel reimbursement rate is. Hotel accommodations at a rate other than the most
reasonable rate or a pre-determined rate described above will be reimbursed only if
approved by the Board President (for members of the board and the Superintendent) and
the Superintendent (for all others) prior to the stay.
Meals
NOTE: Again, the district may wish to use the federal reimbursement rates as a maximum
reimbursement rate for meals. For more information on the meal allowance breakdown for New
York rate go to http://nysosc3.osc.state.ny.us/agencies/travel/2004-05rate.htm
Under section 77-c of the General Municipal Law, a school board may determine, by
resolution, to allow and pay a reasonable per diem allowance for meals in lieu of such actual
and necessary expenses. In determining the amount of such allowance, the board shall consider
the prevailing costs for meals in the area in which the travel will occur, but in no event shall
such allowance exceed the standard meal allowance for business-related travel adopted or
prescribed for federal income tax purposes. If the Board opts to allow per diem allowances for
meals, itemized receipts will nevertheless be required to be presented.
Reimbursable meal charges, including gratuities, for persons traveling for district-related
business shall be as follows:

Breakfast
$_____ (e.g., $10.00)

Lunch
$_____ (e.g,, $15.00)

Dinner
$______(e.g..$40.00)
OR
Daily Total
(e.g., $55.00)
Personal Expenses
The district does not reimburse persons traveling on district-related business for personal
expenses including, but not limited to, pay television, hotel health club facilities, alcoholic
beverages, theater and show tickets, and telephone calls and transportation costs unrelated to
district business.
Adoption date:
NYSSBA Sample Policy
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60
NYSSBA Sample Policy 8330
AUTHORIZED USE OF SCHOOL-OWNED MATERIALS AND EQUIPMENT
The Board of Education permits the use of district-owned materials and equipment (e.g.,
laptop computers, cell phones, audio-visual equipment, etc.) by Board members, officers, and
employees of the district when such material and equipment is needed for district-related
purposes.
The Superintendent of Schools, in consultation with the School Business Official, shall
establish regulations governing the loan and use of such equipment. Such regulations must
address:
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

the individuals who may properly authorize the use of such material and/or equipment;
the lack of authority of the borrower to use such material or equipment for private, nonbusiness purposes;
the responsibilities of the borrower for proper use, care and maintenance;
that, regardless of condition or other factors, all loaned equipment must be returned to the
district. No item may be sold to or purchased by the borrower unless such equipment has
been returned to the district for evaluation and, if necessary, disposal in accordance with
district policy and procedures.
All equipment shall be inventoried and a list shall be maintained of the date such
equipment was loaned, to whom it was loaned, and the date of expected and actual return.
Individuals borrowing district-owned equipment shall be fully liable for any damage or
loss occurring to the equipment during the period of its use, and shall be responsible for its safe
return.
The Business Office shall maintain records of all equipment that is loaned for long-term
use (e.g, school year, term of office, etc.) and shall review such list yearly.
Adoption date:
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NYSSBA Sample Policy 8334
USE OF CREDIT CARDS
The Board of Education permits the use of district credit cards by certain
school officials and Board members to pay for actual and necessary expenses
incurred in the performance of work-related duties for the district. A list of those
individuals who will be issued a district credit card will be maintained in the
Business Office and reported to the Board each year at its reorganizational
meeting in July. All credit cards will be in the name of the school district.
The district shall establish a credit line not to exceed $______ [e.g.
$2,500] for each card issued and an aggregate credit limit of $_________ [e.g.,
$25,000] for all cards issued to the district.
The Board shall ensure that the credit card is secured through an RFP
process and the relationship between the district and the credit card company is
such that the district reserves its right to refuse to pay any claim or portion thereof
that is not expressly authorized, does not constitute a proper district charge, or
supersedes any laws, rules, regulations, or policies otherwise applicable. In
addition, the Board will ensure that no claim shall be paid unless an itemized
voucher approved by the officer whose action gave rise or origin to the claim,
shall have been presented to the Board and shall have been audited and allowed.
Credit cards may only be used for legitimate school district business
expenditures. The use of credit cards is not intended to circumvent the district’s
policy on purchasing.
Users must take proper care of these credit cards and take all reasonable
precautions against damage, loss, or theft. Any damage, loss, or theft must be
reported immediately to the Business Office and to the appropriate financial
institution. Failure to take proper care of credit cards or failure to report damage,
loss or theft may subject the employee to financial liability.
Purchases that are unauthorized, illegal, represent a conflict of interest, are
personal in nature or violate the intent of this policy may result in credit card
revocation and discipline of the employee.
Users must submit detailed documentation, including itemized receipts for
commodities, services, travel and/or other actual and necessary expenses which
have been incurred in connection with school-related business for which the credit
card has been used.
NYSSBA Sample Policy – Used with Permission
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NYSSBA
62
NYSSBA Sample Policy 8334
The Superintendent of Schools, in consultation with the Assistant
Superintendent of Business and the district’s Purchasing Agent, shall establish
regulations governing the issuance and use of credit cards. Each cardholder shall
be apprised of the procedures governing the use of the credit card and a copy of
this policy and accompanying regulations shall be given to each cardholder.
The Assistant Superintendent of Business shall periodically, but no less
than twice a year, monitor the use of each credit card and report any serious
problems and/or discrepancies directly to the Superintendent and the Board.
Cross-ref:
Ref:
6700, Purchasing
6830, Expense Reimbursement
Education Law §§1724(1); 2524(1)
Opn. St. Compt. No. 79-202
Opn. St. Compt. No. 79-494
Opn. St. Compt. No. 78-897
Adoption date:
NYSSBA Sample Policy – Used with Permission
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NYSSBA
63
NYSSBA Sample Policy 9120.1
CONFLICT OF INTEREST
NOTE: A conflict of interest arises in situations where an officer or employee of a
school district is in a position to benefit personally from a decision he or she may
make on behalf of the district, exercising official authority or disposing of public
funds.
The General Municipal Law contains specific prohibitions against any
officer or employee, as well as his or her spouse, minor child or other dependent,
having an interest in any contract over which he or she has any responsibility to
negotiate, prepare, authorize, approve or audit (see policy 2160). The Education
Law also prohibits ay school officer from voluntarily becoming interested,
directly or indirectly, in any contract, lease, purchase or sale in which he or she
took part or could take part.
In addition to these statutory prohibitions, the Board may include policies
forbidding administrative or supervisory staff from hiring or supervising members
of their own family, purchasing services or products without competitive bidding
or comparison pricing, allowing any other personal interest or influence to
interfere in the performance of official duties.
The Board of Education is committed to avoiding any situation in which
the existence of simultaneous, conflicting interests in any officer or employee
may call into question the integrity of the management or operation of the school
district. Therefore:
No person employed by the district shall hire, supervise, evaluate,
promote, review or discipline any other employee who is a member of the same
family. In the event that marriage, promotion, or reorganization results in a
situation not in compliance with this policy, reassignment or transfer will be
effected, in accordance with the applicable provisions of any collective bargaining
agreement, to correct the situation.
No person employed by the district shall negotiate or execute any contract
on behalf of the district for the purchase, sale or lease of real or personal property,
services of any nature, nor for insurance without first having determined the
common price for such property, services or insurance, or requesting bids from all
potential providers of such property, services or insurance.
No person employed by the district shall allow any matter, concern or
interest, personal, financial or otherwise, to influence or interfere with the
performance of his or her duties. Should such a matter, concern or interest arise,
the employee shall bring the matter to the attention of his or her supervisor to seek
ways to reduce or eliminate the influence or interference.
The Board affirms its commitment to adhere scrupulously to all applicable
provisions of law regarding material conflicts of interest.
Sample Policy Copyright © 2009 by the New York State School Boards
Association, Inc.
64
NYSSBA Sample Policy 9120.1
Knowing or willful violation of this policy by any employee may result in
disciplinary action up to and including dismissal.
Any officer, employee or member of the public noting or suspecting a
violation of this policy is encouraged to bring the matter, either in confidence or
in public, to the Board or the Superintendent of Schools.
Ref:
Education Law §§ 410, 3016
General Municipal Law Art. 18, §§ 801-813
Labor Law §201-d
Dykeman v. Symonds, 54 AD2d 159 (4th Dep't 1976)
Adoption date:
Sample Policy Copyright © 2009 by the New York State School Boards
Association, Inc.
65
NYSSBA Sample Policy 9645
DISCLOSURE OF WRONGFUL CONDUCT
(Whistleblower Policy)
NOTE: It is good practice for a Board to adopt a policy to encourage its officers
and employees to report instances of illegal or improper conduct such as theft,
fraud, and mismanagement of district resource.
This policy also serves to notify district employees of the protections
afforded them under the so-called “whistle-blower law” which prohibits a school
district from retaliating against an employee who discloses to the district
information concerning either a violation of law, rule or regulation, which
creates a substantial and specific danger to the public health or safety, or which
the employee reasonably believes to be true and reasonably believes constitutes
an improper action by the district.
The Board of Education expects officers and employees of the district to
fulfill the public’s trust and to conduct themselves in an honorable manner,
abiding by all district policies and regulations and by all applicable state and
federal laws and regulations.
However, when district officers or employees know or have reasonable
cause to believe that serious instances of wrongful conduct (e.g., mismanagement
of district resources, violations of law and/or abuse of authority) have occurred,
they should report such wrongful conduct to the Board or one of its designated
officers.
For purposes of this policy, the term “wrongful conduct” shall be defined
to include:





theft of district money, property, or resources;
misuse of authority for personal gain or other non-district purpose;
fraud;
violations of applicable federal and state laws and regulations; and/or
serious violations of district policy, regulation, and/or procedure.
Disclosure and Investigation
NOTE: Prior to making a disclosure, an employee must make a good faith effort
to give the employer the information to be disclosed and permit a reasonable time
to take appropriate action.
Employees and officers who know or have reasonable cause to believe
that wrongful conduct has occurred shall report such mismanagement, fraud or
abuse to the Superintendent of Schools, the School Attorney or the Independent
Auditor. Each of these Board-designated officers, upon receiving a report of
alleged wrongful conduct, shall take immediate steps to conduct an investigation.
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NYSSBA Sample Policy 9645
NOTE: The Board may wish to carefully consider the individual(s) it will appoint
to receive such disclosures and how such investigations will be conducted. It is
important that the appointees and investigators be trained in how to conduct a
proper investigation so that, for example, necessary documentary evidence and
records are not destroyed in the process.
The Superintendent, School Attorney or the Independent Auditor shall
maintain a written record of the allegation, conduct an investigation to ensure that
the appropriate unit (auditors, police, etc.) investigates the disclosure, and notify
the Board when appropriate to do so.
Except as otherwise provided in either state and/or federal law, the Boarddesignated officer shall make all reasonable attempts to protect the identity of the
employee making the disclosure in a confidential manner, as long as doing so
does not interfere with conducting an investigation of the specific allegations or
taking corrective action.
Complaints of Reprisal
NOTE: Section 75-b of the Civil Service Law, the so-called “whistleblower law”
prohibits school districts from taking retaliatory personnel action against an
employee who discloses to a governmental body information concerning either a
violation of law, rule or regulation, which creates a substantial and specific
danger to the public health or safety, or which the employee reasonably believes
to be true and reasonably believes constitutes an improper governmental action.
To the extent to which any school district has provided greater benefits of
protection in a collective bargaining agreement, employees of such district will
not be limited in their being protected by such protections.
If the employee discloses information which he or she has reasonable
cause to believe is false or which is prohibited or protected from disclosure by
law, the employee is not covered by this provision of law.
An employee who has been subject to an adverse employment action
based on his or her prior disclosure of alleged or actual wrongful conduct may
contest the action by filing a written complaint of reprisal with the Board
President. The Board President, or his/her designee, will review the complaint
expeditiously to determine:



whether the complainant made a disclosure of alleged wrongful conduct
before an adverse employment action was taken;
whether the responding party could reasonably have been construed to
have had knowledge of the disclosure and the identity of the disclosing
employee;
whether the complainant has in fact suffered an adverse employment
action after having made the disclosure; and
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NYSSBA Sample Policy 9645

whether the complainant alleges that adverse employment action occurred
as a result of the disclosure.
If the designee determines that all of the above elements are present, he or
she shall appoint a review officer or panel to investigate the claim and make a
recommendation to the Board. At the time of appointment, the designee shall
inform the complainant and the respondent, in writing, of:




the intent to proceed with an investigation;
the specific allegations to be investigated;
the appointment of the review officer or panel; and
the opportunity of each party to support or respond, in writing, to the
allegation.
Once the review officer or panel has conducted a review and considers the
investigation to be complete, the officer or panel will notify the designee of its
completion. From the date of that notice, the review officer has ___ days (e.g., 30
days) to report his or her findings and make any recommendations he or she
deems appropriate to the designee. The designee, in conferral with the
appropriate administrator shall issue a letter of findings to both the complainant
and the respondent.
The decision of the review officer or panel is binding.
NOTE: The protection afforded by the “whistleblower law” is not available
where the district has a separate and independent basis for alleged adverse
actions taken against the employee.
Nothing in this policy is intended to interfere with legitimate employment
decisions.
The Superintendent of Schools shall establish regulations necessary to
implement this policy.
This policy and accompanying regulations shall be published in employee
handbooks, posted in employee lounges and given to all employees with fiscal
accounting and/or money handling responsibilities on an annual basis.
The Superintendent of Schools, the Auditor, the School Attorney and
others involved in implementing this policy shall meet with the Board once a year
to evaluate the effectiveness of this policy and to make appropriate adjustments, if
any, to the policy and accompanying regulations.
NYSSBA Sample Policy
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NYSSBA Sample Policy 9645
Ref:
Civil Service Law §75-b
Labor Law §740
Garrity v. University at Albany, 301 A.D. 2d 1015 (3rd Dept. 2003)
Matter of Brey v. Bd. of Educ., 245 A.D. 2d (3rd Dept. 1997)
Adoption date:
NYSSBA Sample Policy
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69
For additional information, NYSSBA recommends:
NYS Office of the Comptroller, School Accountability Reform (contains annual reports) online at
http://www.osc.state.ny.us/reform/school/index.htm
School Law, New York State School Boards Association & New York State Bar Association, 32nd Edition, 2008.
Chapters 27 (Fiscal Management). This book can be purchased through LexisNexis at
http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=42394.
Statement on the Governance Role of a Trustee or Board Member, Board of Regents, USNY, Nov 2007, online at
http://www.regents.nysed.gov/about/statement_governance.html or as a .pdf
at http://www.regents.nysed.gov/about/stmt07.pdf. If you do not have Adobe Acrobat Reader you can download it
here to read any .pdf files.
"Fiscal Fitness: A Guide to Monitoring Your School District’s Budget," New York State Education Department,
February 2004. This document is available online by clicking on the following
link: http://www.emsc.nysed.gov/mgtserv/FiscalFitnessGuide.htm.
NYS Office of the Comptroller Local Government and School Accountability Publications Page (Also contains the
Local Government Management Guide)
NYS Office of the Comptroller School District Financial Accountability Resource Materials provides comprehensive
guidance to understanding the audit process.
NYS Office of the Comptroller School District Auditing; Roles, Responsibilities, and Resources.
NYS Office of the Comptroller Fiscal Oversight Responsibilities of the Governing Board.
The New York State Education Department, Office of Education Management Services, makes available additional
guidance documents at http://www.emsc.nysed.gov/mgtserv/.
NYS Office of the Comptroller Local Government and School Accountability landing
page: http://www.osc.state.ny.us/localgov/schoolsfa/.
Guidance on Implementing Fiscal Accountability Legislation, NYS Department of Education.
Chapter 12, Fundamentals of School Finance, Becoming a Better Board Member: A Guide to Effective Board Service,
National School Boards Association, 3rd edition, 2006. This book is available through the NYSSBA bookstore at
http://nyssba.org/index.php?submenu=book_store1&src=directory&view=store&category=Books.
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