Executive Summary

Background and Scope of the Audit

Genesee Valley BOCES ranked as the 25th largest BOCES in the State, in terms of total general fund expenditures, for the 2000-01 school year.

The audit examined management practices, records and documentation related to summarizing and reporting data used in the BOCES Report Card and the Chapter 602 Report for the period July 1, 2000 through June 30, 2001. The Employment Preparation Education (EPE) Program was reviewed for the 2000-01 school year. This audit also followed up on findings and recommendations from the previous audit. The objectives were to: evaluate the adequacy of management controls over data reported to the Department and obtain reasonable assurance that the data are valid and reliable; determine how BOCES use data to monitor the performance of the schools within its supervisory district; determine how BOCES use data to monitor student outcomes; and to evaluate the wide ranges of costs identified in the Chapter 602 Report and understand the reasons for the variances.

Audit Results

Presented below is a summary of the significant audit findings developed in response to the audit’s objectives.

· Report Card data were reasonably accurate. (page 3)

· The methodology used for calculating the Per Pupil Tuition Rates for Occupational Education and Special Education Class Options was inaccurate. (page 4)

· EPE contact hours were overstated by 3,138 hours for a net total of $15,941 in excess EPE aid for the 2000-01 school year. (pages 7-11)

· Opportunities exist for improving management processes pertaining to segregating duties for payroll, bank reconciliations, and General Ledger access. (page 16)

Genesee Valley BOCES officials have taken appropriate steps to correct the findings in EPE. They also state they will evaluate the opportunities for improving management processes and make improvements where possible.

Introduction..................................................................................................................................................... 1

Background.................................................................................................................................................... 1

Objectives, Scope and Methodology................................................................................................ 1

Comments of Genesee Valley BOCES Officials............................................................................ 2

Report Card........................................................................................................................................................ 3

Adequate Supporting Documentation............................................................................................ 3

Chapter 602 Report........................................................................................................................................ 4

Report Accuracy and Documentation............................................................................................ 4

Recommendation.......................................................................................................................................... 4

Employment Preparation Education (EPE) Program........................................................... 6

Policies and Procedures Manual...................................................................................................... 6

Summary Contact Hours......................................................................................................................... 7

Contact Hour Documentation............................................................................................................. 7

Contact Hours Claimed for Ineligible Students...................................................................... 8

Intake/Assessment Hours........................................................................................................................ 8

Program Approval Requirements................................................................................................... 11

Teacher Not Employed By the BOCES.............................................................................................. 11

Class Size Exceeds 20 Students.......................................................................................................... 11

Auditor’s Note............................................................................................................................................. 12

Waivers Needed for Classes of Less Than 6 or More Than 20 Hours Per Week...... 12

Auditor’s Note............................................................................................................................................. 12

Student Folders......................................................................................................................................... 12

Teacher's Certifications........................................................................................................................ 13

Recommendations..................................................................................................................................... 14

Opportunities to Improve Management Processes............................................................ 15

Segregation of Duties............................................................................................................................. 15

Recommendation....................................................................................................................................... 16

Data Collection and Use......................................................................................................................... 17

Genesee Valley BOCES’ Response...................................................................................................... 17

Question 2....................................................................................................................................................... 17

Genesee Valley BOCES’ Response...................................................................................................... 18

Question 3....................................................................................................................................................... 19

Genesee Valley BOCES’ Response...................................................................................................... 19

Question 4....................................................................................................................................................... 19

Genesee Valley BOCES’ Response...................................................................................................... 19

Question 5....................................................................................................................................................... 19

Genesee Valley BOCES’ Response...................................................................................................... 19

Follow Up – Recommendation Implementation Plan........................................................ 20

Schedule 1 – Summary of Questioned Contact Hours

Appendix A – Contributors to the Report

Appendix B – Comments of Genesee Valley BOCES Officials

Introduction

Background

Public and legislative attention has been turned to data provided by Boards of Cooperative Educational Services (BOCES) and school districts with the issuance of Report Cards. Chapter 436 of the Laws of 1997 made the New York State BOCES Report Cards (Report Cards) available to the public on April 16, 1999. Graphically presented, the Report Cards summarize program accomplishments and services BOCES provide for children and adults.

In addition, Chapter 602 of the Laws of 1994 added Section 215-b to the Education Law to require the Commissioner of Education to prepare and submit to the Governor, the President Pro Tem of the Senate, and the Speaker of the Assembly, an annual report beginning January 1, 1996. The Chapter 602 Report details certain financial and statistical outcomes of BOCES, tuition costs for selected programs, per pupil cost information, and aggregate expenditure data for BOCES’ administrative, capital, and service functions. The Chapter 602 Report is to include changes from the year prior to the report year for all data.

BOCES are organized under Section 1950 of the Education Law. Chapter 474 of the Laws of 1996 amended Section 305 of the Education Law to require the New York State Education Department (Department) to perform fiscal audits of BOCES at least once every three years.

Genesee Valley BOCES, headquartered in LeRoy, New York, serves 22 component districts. It ranked 25th largest in the State, in terms of total fund expenditures, for the 2000-01 school year.

Objectives, Scope and Methodology

Pursuant to Sections 305 and 1950 of the Education Law, we audited management practices, records, and documentation related to the July 1, 1998 through June 30, 2001 data contained in the Report Card and the Chapter 602 Report published during the spring of 2002. We followed up on the status of the prior recommendations made in audit report number BOC–0797-4 and reviewed the Employment Preparation Education (EPE) Program for the period July 1, 2000 through June 30, 2001. The objectives were to:

· evaluate the adequacy of management controls over data reported to the Department and obtain reasonable assurance that the data are valid and reliable.

· determine how BOCES use data to monitor the performance of the districts within its supervisory district.

· determine how BOCES use data to monitor student outcomes.

· evaluate the wide ranges of costs identified in the Chapter 602 Report and understand the reasons for the variances.

· determine if EPE claims are adequately documented.

· follow up on the findings and recommendations from the previous audit, and determine whether timely and adequate corrective actions were implemented.

To accomplish our objectives, we reviewed applicable laws, regulations, policies, and procedures; interviewed Department and Genesee Valley BOCES management and staff; examined records and supporting documentation; sampled transactions on a non-statistical basis; and reviewed Genesee Valley BOCES’ audited financial statements.

We conducted the audit in accordance with Government Auditing Standards issued by the Comptroller General of the United States. An audit includes examining, on a test basis, evidence supporting records and applying other audit procedures considered necessary in the circumstances. An audit also includes assessing the estimates, judgments, and decisions made by management. We believe that the audit provides a reasonable basis for our findings, conclusions, and recommendations.

Comments of Genesee Valley BOCES Officials

Genesee Valley BOCES officials generally agreed with the matters contained in this report and their comments have been included where appropriate. Their final comments, if any, will be included as Appendix B to the final report.

Report Card

The Report Cards, required by Chapter 436 of the Laws of 1997, were made available to the public on April 16, 1999. Graphically presented, the Report Cards summarize program accomplishments and services BOCES provide for children and adults. They are intended to be used as a tool for the continuous improvement of BOCES’ programs and services, and for providing information to communities. Data included in the Report Cards must be valid and reliable in order to be used effectively and BOCES officials are given the opportunity to review the Report Card prior to its release.

The Report Card reports on the following programs and services: Career/Occupational Education; Alternative Education; Adult Education; Special Education; Curriculum and Professional Development; Technology; the State Testing Program; and the 1999-2000 Expended Budget. The State testing figures are provided by the Department, not BOCES, therefore, those figures were not included in the scope of the audit.

Adequate Supporting Documentation

An objective of this audit was to determine the accuracy of the Report Card data and the adequacy of the supporting documentation. The audit found that Genesee Valley BOCES had adequate documentation to support the Report Card data. Overall, the Report Card data were reasonably accurate.

Chapter 602 Report

Chapter 602 of the Laws of 1994 added Section 215-b to the Education Law, which requires the Commissioner of Education to prepare and submit to the Governor, the President Pro Tem of the Senate, and the Speaker of the Assembly, an annual report beginning January 1, 1996. The Chapter 602 Report is also provided to all school districts and BOCES.

The Chapter 602 Report details certain financial and statistical outcomes of BOCES, tuition costs for selected programs, per pupil cost information, and aggregate expenditure data for BOCES administrative, capital and service functions. In accordance with the statute, the Chapter 602 Report should include changes from the year prior to the report year for all data.

Report Accuracy and Documentation

An objective of the audit was to determine the accuracy of the Chapter 602 Report data, the adequacy of the supporting documentation, and to evaluate variances with statewide averages.

Occupational Education Section

Genesee Valley BOCES’ methodology for calculating the Per Pupil Tuition Rate for 1999-2000 did not deduct the miscellaneous revenues for Occupational Education. As a result, the tuition rate reported at $5,245 should have been $5,203.

Special Education Class Options

This section shows the Tuition Per Pupil for the Special Education Class Options, II, III, and IV. The audit found that Genesee Valley BOCES added the current year’s encumbrances but did not deduct the previous year’s encumbrances. In addition, they did not deduct miscellaneous revenue before calculating the tuition rates.

As a result, the tuition rates for the three Special Education Class Options are overstated. This overstatement does not affect the Chapter 602 Report materially. However, the errors are brought to Genesee Valley BOCES’ attention so the calculations can be performed correctly in subsequent years.

Recommendation

1. Ensure the tuition rates for Occupation Education and Special Education Class Options are calculated correctly.

Comments of Genesee Valley BOCES Officials

Genesee Valley BOCES officials concur with this recommendation.

Employment Preparation Education (EPE) Program

Genesee Valley BOCES operates an EPE Program. This categorical aid program serves students 21 years of age or older who have not received a high school or equivalency diploma.

Part 168.4 of the Regulations of the Commissioner of Education (Regulations) states that EPE Program funds may be spent for personal services, employee benefits, equipment, supplies and materials, contractual services, travel expenditures, staff development and training, and other expenditures approved by the Commissioner. These expenditures are to be used only for EPE Program purposes.

Genesee Valley BOCES received a total of $308,107 in EPE aid for the period July 1, 2000 through June 30, 2001, based on reported contact hours. Education Law Section 3602 states that when total revenue received exceeds the entire cost of such program, State aid payable in the following year will be reduced by the amount of such excess. This means that Genesee Valley BOCES must refund the larger of revenues disallowed or expenditures disallowed, but not both. The audit report will be used by the Department to adjust future aid received by Genesee Valley BOCES.

The audit found that Genesee Valley BOCES claimed 3,138 contact hours for students that could not be adequately documented or were ineligible for aid. The total net EPE aid ineligible for 2000-01 amounts to $15,941 (see Schedule 1).

Policies and Procedures Manual

Good business practice dictates that written policies and procedures be adopted for those services which are not covered by other general policies and procedures. This is especially true when there are specific requirements for providing these services and documenting that these services were provided. These written policies and procedures would incorporate any laws, regulations, guidelines or manuals issued by the organization(s) with oversight authority.

Genesee Valley BOCES could improve its operations by having written policies and procedures established for the EPE program. With written policies and procedures, the employees providing EPE services and accounting for EPE services provided would have clear guidance, which might have prevented the EPE findings in this report.

Genesee Valley BOCES officials agree that they do not have any written policies or procedures specifically for the EPE program. They will prepare a written procedures manual using the new EPE manual received from the Department as a guide.

Summary Contact Hours

School districts and BOCES generate EPE aid by reporting contact hours and student enrollment on Forms SA-160.1 and SA-160.2, EPE State Aid Claim Forms. Under Section 168.2 of the Regulations, a contact hour for EPE means 60 minutes of instruction given by a teacher in approved program component areas. The Department requires the number of reported contact hours to be clearly documented to ensure that EPE revenues paid to the districts or BOCES are appropriate. Any undocumented or overstated contact hours will be questioned upon audit and revenues will be reduced accordingly. The school districts or BOCES must maintain classroom attendance rosters of all students who attend EPE Programs.

Genesee Valley BOCES claimed 60,651 total contact hours on the SA-160.1 and the SA-160.2 for the 2000-01 school year. Their summary sheets support 60,457 contact hours, which is 194 hours less than reported. Genesee Valley BOCES did not ensure that total hours reported on Forms SA-160.1 and SA-160.2 reconciled with their summary attendance records.

As a result, Genesee Valley BOCES received $987 in EPE aid to which it is not entitled. Genesee Valley BOCES officials agree those contact hours were overstated. They state this situation was the result of human error and the new procedure manual may assist in this area.

Contact Hour Documentation

BOCES are required to maintain appropriate attendance records to support contact hours reported on Forms SA-160.1 and SA-160.2. The audit found that Genesee Valley BOCES' records did not always adequately document EPE contact hours, resulting in errors when calculating EPE contact hours.

The audit found contact hour documentation lacking for the following for EPE Program activities as shown in Table 1.

Table 1

Questioned Contact Hours

Class	Contact Hours	Dollar effect
ESOL Batavia	3	$15
Camp Elba	14	71
Camp Yorkshire	154	782
GED on TV	126	640
Math Basics	-18	-91
Life Management	384	1,951
Work Experience	10	49
Total	673	$3,417

Source: Genesee Valley EPE records.

As a result, Genesee Valley BOCES and the Department have little assurance that EPE contact hours are being properly reported and claimed. The audit questioned 673 EPE contact hours resulting in a disallowance of $3,417 in EPE aid.

Genesee Valley BOCES officials agree that they did not always maintain adequate documentation in the student logs to support EPE contact hours claimed for these programs. They state this situation was the result of human error because the instructors maintain the student logs off site. They believe their new procedures manual will help in this area.

Contact Hours Claimed for Ineligible Students

According to Education Law, Section 3602.24.a., school districts and BOCES are eligible for EPE aid for the attendance of persons 21 years of age or over who have not received a high school diploma or a high school GED diploma.

The audit determined that Genesee Valley BOCES claimed 189 contact hours for students who were under the age of 21 during the 2000-01 school year. They also claimed 797 contact hours for students who had been issued high school diplomas or GEDs. The ineligible hours totaled 986, which represent $5,008 in EPE aid to be repaid to the Department.

Genesee Valley BOCES officials agree that they claimed EPE contact hours for students under the age of 21 and for students who were issued a GED, high school diploma or status undetermined. However, they explain that the students in question are from migrant families and quite often records for these individuals do not exist. Many times, the students themselves are uncertain of their exact birthdate.

Intake/Assessment Hours

According to a memo sent from the Department to all BOCES in October 1995, career counseling and evaluation and intake assessment hours are eligible for EPE aid provided that these program activities are conducted by a teacher. Also, to ensure that EPE revenues paid to BOCES are appropriate, the number of reported contact hours must be clearly documented. Any undocumented or overstated contact hours will be questioned upon audit.

The EPE Program Comprehensive Plan of Service Application for 1995-96 noted that counseling service for any purpose other than the development of education and employment preparation plans for students is not aidable through EPE. In addition, only instructional hours provided by a teacher are aidable.

Genesee Valley BOCES claimed 2,745 contact hours for intake/assessment; however, there was no documentation for these hours. They claimed three contact hours for each student tested at the Adult Education Office and the Migrant Center.

Department officials from the Office of Workforce Prepa