mineola union free school district
TRANSCRIPT
Division of LocaL Government & schooL accountabiLity
o f f i c e o f t h e n e w y o r k s t a t e c o m p t r o L L e r
report of ExaminationPeriod Covered:
July 1, 2014 — June 30, 2015
2015M-313
Mineola Union Free School District
Competitive Quotations
thomas p. Dinapoli
Page
AUTHORITY LETTER 1
INTRODUCTION 2 Background 2 Objective 2 Scope and Methodology 2 CommentsofDistrictOfficialsandCorrectiveAction 2
COMPETITIVE QUOTATIONS 4 Recommendations 5
APPENDIX A ResponseFromDistrictOfficials 6APPENDIX B AuditMethodologyandStandards 9APPENDIX C HowtoObtainAdditionalCopiesoftheReport 10APPENDIX D LocalRegionalOfficeListing 11
Table of Contents
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State of New YorkOffice of the State Comptroller
Division of Local Governmentand School Accountability February2016
DearSchoolDistrictOfficials:
AtoppriorityoftheOfficeoftheStateComptrolleristohelpschooldistrictofficialsmanagetheirdistrictsefficientlyandeffectivelyand,bysodoing,provideaccountabilityfor taxdollarsspent tosupportdistrictoperations.TheComptrolleroverseesthefiscalaffairsofdistrictsstatewide,aswellasdistricts’compliancewithrelevantstatutesandobservanceofgoodbusinesspractices.Thisfiscaloversight is accomplished, in part, throughour audits,which identify opportunities for improvingdistrictoperationsandBoardofEducationgovernance.Auditsalsocanidentifystrategiestoreducedistrict costs and to strengthen controls intended to safeguard district assets.
Followingisareportofourauditof theMineolaUnionFreeSchoolDistrict,entitledCompetitiveQuotations.ThisauditwasconductedpursuanttoArticleV,Section1oftheStateConstitutionandtheStateComptroller’sauthorityassetforthinArticle3oftheNewYorkStateGeneralMunicipalLaw.
This audit’s results and recommendations are resources for district officials to use in effectivelymanagingoperationsandinmeetingtheexpectationsoftheirconstituents.Ifyouhavequestionsaboutthisreport,pleasefeelfreetocontactthelocalregionalofficeforyourcounty,aslistedattheendofthis report.
Respectfullysubmitted,
Office of the State ComptrollerDivision of Local Governmentand School Accountability
State of New YorkOffice of the State Comptroller
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Background
Introduction
Objective
Scope andMethodology
Comments ofDistrict Officials andCorrective Action
The Mineola Union Free School District (District) is located in the Town ofNorthHempstead,NassauCounty (County).TheDistrictisgovernedbytheBoardofEducation(Board),whichiscomposedof five electedmembers.TheBoard is responsible for the generalmanagementandcontrolof theDistrict’sfinancial andeducationalaffairs.TheSuperintendentofSchoolsistheDistrict’schiefexecutiveofficerandisresponsible,alongwithotheradministrativestaff,forthe District’s day-to-day management under the Board’s direction. TheAssistant Superintendent for Business, who is the purchasingagent,isresponsibleforreviewingandapprovingpurchaseorders.
TheDistrictoperatesfiveschoolswithapproximately2,800studentsand830 employees.TheDistrict’s budgeted appropriations for the2014-15fiscalyearwereapproximately$87.8million,whichwerefundedprimarilywithrealpropertytaxes.
The objective of our audit was to review the District’s internal controls over the procurement process. Our audit addressed the following relatedquestion:
• DidDistrictofficialsobtainquotesforpurchasesthatwerenotsubjecttothecompetitivebiddingrequirements?
WeexaminedtheDistrict’sinternalcontrolsoverpurchasesthatwerenotsubjecttocompetitivebiddingrequirementsfortheperiodJuly1,2014throughJune30,2015.
We conducted our audit in accordance with generally accepted governmentauditingstandards(GAGAS).Moreinformationonsuchstandards and the methodology used in performing this audit are includedinAppendixBofthisreport.Unlessotherwiseindicatedinthisreport,samplesfortestingwereselectedbasedonprofessionaljudgment,asitwasnottheintenttoprojecttheresultsontotheentirepopulation.Where applicable, information is presented concerningthe value and/or size of the relevant population and the sample selectedforexamination.
The results of our audit and recommendations have been discussed withDistrictofficials,andtheircomments,whichappearinAppendixA, have been considered in preparing this report.District officialsagreed with our recommendations and indicated they have taken corrective action.
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The Board has the responsibility to initiate corrective action. Pursuant toSection 35 ofGeneralMunicipalLaw,Section 2116-a(3)(c)ofNewYorkStateEducationLawandSection170.12oftheRegulationsoftheCommissionerofEducation,awrittencorrectiveactionplan(CAP)thataddressesthefindingsandrecommendationsinthisreportmustbepreparedandprovidedtoourofficewithin90days,withacopyforwardedtotheCommissionerofEducation.Tothe extent practicable, implementation of the CAPmust begin bytheendof thenextfiscalyear.Formore informationonpreparingandfilingyourCAP,pleaserefertoourbrochure,Responding to an OSC Audit Report, which you received with the draft audit report. TheBoardshouldmaketheCAPavailableforpublicreviewintheDistrictClerk’soffice.
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Competitive Quotations
Aneffectiveprocurementprocesshelpsensurethatgoodsandservicesoftherightquality,quantityandpricearepurchasedincompliancewith Board and legal requirements, without the influence offavoritism,extravaganceorcorruption.Therefore,itisimportantthatDistrictofficialsseekcompetitionwhenavailable.GeneralMunicipalLaw(GML) requiresadvertising forcompetitivebids forpurchasecontractsthatequaloraggregatetomorethan$20,000andforpublicworks contracts that equal or aggregate to more than $35,000.1 GMLalsorequirestheBoardtoadoptawrittenprocurementpolicygoverning the purchase of goods and services that are not subject to competitivebiddingrequirements.ThispolicyshouldindicatewhenDistrictofficialsmustobtainquotations,outline theprocedures fordeterminingwhichmethodwill be used and provide for adequatedocumentation of the actions taken.
The Board has adopted a purchasing policy for the procurement of goodsandservices.However,itdoesnothavewrittenguidelinesorprocedures for seeking competition for purchases that are not subject to competitivebiddingrequirements.Whilethepurchasingpolicystatesthat the Board recognizes its responsibility to ensure the development ofproceduresfortheprocurementofgoodsandservicesnotrequiredby law tobemadepursuant tocompetitivebidding, theBoardhasnot developed procedures to address these types of purchases. The purchasing agent has informed us that individuals within the District areawarethattheyshouldobtainthreequotesforpurchasesbelowthe bidding threshold. The purchasing agent told us that he does not ensurethatquotesareobtainedorpurchasesaremadethroughaStateor County contract prior to approving the purchase orders. Duringthe2014-15fiscalyear,theDistrictmadepurchasestotaling$685,193from67vendors2thatwerebetween$5,000and$19,999.We judgmentally selected for review the highest dollar purchase made fromeachofthe23highestpaidvendorstotaling$226,353.Districtofficials did not obtain competitive quotations for purchasesmadefrom103vendorstotaling$106,952.Forexample,theDistrictdidnotobtain competitivequotationswhenpurchasingmusical equipment
1 Purchases made through State or County contracts do not need to be competitively bid.
2 Weexcludedpaymentstoprofessionalassociations,employeereimbursementsandproprietaryeducation-relatedexpensesfromourpopulation.
3 Included in this total is a purchase order for boiler repairs in the amount of$12,635thathadanincorrectcooperativebidreferencedonthepurchaseorderatthetimethepurchasingagentapprovedit.Subsequenttotheendoffieldwork,Districtofficialsprovideddocumentationforthecorrectcooperativebid.
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totaling $16,698, including a piano for approximately $15,000.Districtofficialsprovideduswithasolesourceletterfromthemusicequipmentvendorwhenweinquiredaboutcompetition.AlthoughtheMusicDepartmentmaychoosetopurchaseaparticularbrand,therearemanybrandsofpianoandpossiblyothersuppliersofthatspecificbrand.Theremaining13purchasesinoursampleincludedsixmadeunderaStateorCountycontract,sixinwhichtheDistrictsolicitedatleastthreequotationsandoneinwhichitobtainedtwoquotes.4
BecausetheBoardandDistrictofficialsdidnotdevelopandenforcewritten procedures for obtaining competitive quotations for goodsand services not subject to competitive bidding, they do not haveadequateassurancethattheDistrictisreceivingthebestpricefortheitems it purchases.
Districtofficialsshould:
1. Develop written procedures for making purchases that are not subjecttothecompetitivebiddingrequirements.
2. Communicate purchasing procedures to all individuals responsible for making purchases.
Thepurchasingagentshould:
3. Ensure that adequate actions have been taken in solicitingcompetition, or applicable contracts are used, prior toapproving purchase orders.
4 TheDistrictcontacted threevendorsbutonlyreceived twoquotationsfor thispurchase.
Recommendations
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APPENDIX A
RESPONSE FROM DISTRICT OFFICIALS
TheDistrictofficials’responsetothisauditcanbefoundonthefollowingpages.
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APPENDIX B
AUDIT METHODOLOGY AND STANDARDS
To achieve our audit objective and obtain valid evidence, we performed the following auditprocedures:
• We interviewedDistrict officials and employees to gain an understanding of theDistrict’spurchasing procedures.
• We reviewed the District’s purchasing policy.
• Weselectedvendorsthatwerepaidatleast$5,000duringthe2014-15fiscalyearformaterialitypurposes. We used electronic cash disbursement data to determine the population of vendors whohadtotalpaymentsbetween$5,000and$19,999.Weselectedthe23vendorswhowerepaid the highest dollar amounts from within our population. We then selected the purchase orderwiththehighestdollarvalueforthesevendors.These23purchaseorderpaymentstotaled$226,353.
• We reviewed each purchase order to determine whether District officials obtainedwrittenquotationsorusedaStateorCountycontractpricewhenmakingthepurchase.
WeconductedthisperformanceauditinaccordancewithGAGAS.Thosestandardsrequirethatweplanandperform theaudit toobtainsufficient,appropriateevidence toprovidea reasonablebasisforourfindingsandconclusionsbasedonourauditobjective.Webelievethattheevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjective.
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APPENDIX C
HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT
OfficeoftheStateComptrollerPublicInformationOffice110StateStreet,15thFloorAlbany,NewYork12236(518)474-4015http://www.osc.state.ny.us/localgov/
Toobtaincopiesofthisreport,writeorvisitourwebpage:
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APPENDIX DOFFICE OF THE STATE COMPTROLLER
DIVISION OF LOCAL GOVERNMENTAND SCHOOL ACCOUNTABILITYAndrewA.SanFilippo,ExecutiveDeputyComptroller
GabrielF.Deyo,DeputyComptrollerTraceyHitchenBoyd,AssistantComptroller
LOCAL REGIONAL OFFICE LISTING
BINGHAMTON REGIONAL OFFICEH.ToddEames,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Suite170244 Hawley StreetBinghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313Email:[email protected]
Serving:Broome,Chenango,Cortland,Delaware,Otsego,Schoharie,Sullivan,Tioga,TompkinsCounties
BUFFALO REGIONAL OFFICEJeffreyD.Mazula,ChiefExaminerOfficeoftheStateComptroller295MainStreet,Suite1032Buffalo,NewYork14203-2510(716)847-3647Fax(716)847-3643Email:[email protected]
Serving:Allegany,Cattaraugus,Chautauqua,Erie,Genesee,Niagara,Orleans,WyomingCounties
GLENS FALLS REGIONAL OFFICEJeffreyP.Leonard,ChiefExaminerOfficeoftheStateComptrollerOne Broad Street PlazaGlensFalls,NewYork12801-4396(518)793-0057Fax(518)793-5797Email:[email protected]
Serving:Albany,Clinton,Essex,Franklin,Fulton,Hamilton,Montgomery,Rensselaer,Saratoga,Schenectady,Warren,WashingtonCounties
HAUPPAUGE REGIONAL OFFICEIraMcCracken,ChiefExaminerOfficeoftheStateComptrollerNYSOfficeBuilding,Room3A10250VeteransMemorialHighwayHauppauge,NewYork11788-5533(631)952-6534Fax(631)952-6530Email:[email protected]
Serving:NassauandSuffolkCounties
NEWBURGH REGIONAL OFFICETennehBlamah,ChiefExaminerOfficeoftheStateComptroller33AirportCenterDrive,Suite103NewWindsor,NewYork12553-4725(845)567-0858Fax(845)567-0080Email:[email protected]
Serving:Columbia,Dutchess,Greene,Orange,Putnam,Rockland,Ulster,WestchesterCounties
ROCHESTER REGIONAL OFFICEEdwardV.Grant,Jr.,ChiefExaminerOfficeoftheStateComptrollerThe Powers Building16WestMainStreet,Suite522Rochester,NewYork14614-1608(585)454-2460Fax(585)454-3545Email:[email protected]
Serving:Cayuga,Chemung,Livingston,Monroe,Ontario,Schuyler,Seneca,Steuben,Wayne,YatesCounties
SYRACUSE REGIONAL OFFICERebeccaWilcox,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Room409333E.WashingtonStreetSyracuse,NewYork13202-1428(315)428-4192Fax(315)426-2119Email:[email protected]
Serving:Herkimer,Jefferson,Lewis,Madison,Oneida,Onondaga,Oswego,St.LawrenceCounties
STATEWIDE AUDITSAnnC.Singer,ChiefExaminerStateOfficeBuilding,Suite170244 Hawley Street Binghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313