THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234

Daniel Tworek

Director

Office of Audit Services

Tel. (518) 473-4516

Fax (518) 473-0259

E-mail: dtworek@mail.nysed.gov

September 25, 2002

Mr. Dean Utter

Board President

Otsego-Delaware-Schoharie-Greene BOCES

Frank W. Cyr Center

Stamford, New York 12167

Dear Mr. Utter:

The following is our final audit report (BOC-0301-8) of the Otsego-Delaware-Schoharie-Greene Board of Cooperative Educational Services (BOCES) for the period July 1, 1999 through June 30, 2000. The audit was conducted pursuant to Sections 305 and 1950 of the Education Law in pursuit of Goal #5 of the Board of Regents/State Education Department Strategic Plan: “Resources under our care will be used or maintained in the public interest.”

It is the policy of the State Education Department to consider for review matters of significant disagreement which result from the issuance of a final audit report. Appendix C describes the process to be followed in the event of such disagreement.

Ninety days from the issuance of this report, BOCES officials will be asked to submit a report on actions taken as a result of this audit. I appreciate the cooperation and courtesies extended to the staff during the audit.

Sincerely,

Daniel Tworek

Enclosure

cc: Commissioner Mills, R. Cate, J. Kadamus, B. Porter, T. Sheldon, B. Stambler, J. Stevens,

C. Szuberla, C. Foster (DOB), J. Dougherty (OSC), Dr. Warchol, District Superintendent

Table of Contents

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

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

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

Comments of Otsego-Northern Catskills BOCES Officials................................................. 2

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

Data Accuracy and Supporting Documentation...................................................................... 3

Career & Technical Education............................................................................................................ 3

Adult Career Education Sections...................................................................................................... 6

Recommendations....................................................................................................................................... 7

Comments of Otsego-Northern Catskills BOCES Officials................................................. 7

Chapter 602 Report........................................................................................................................................ 8

Report Accuracy and Documentation............................................................................................ 8

Occupational Education Section:................................................................................................................. 8

Special Education Section.............................................................................................................................. 9

Special Education - Related Services Section:......................................................................................... 10

Itinerant Services Section:........................................................................................................................... 10

General Education Section:........................................................................................................................ 11

Recommendations..................................................................................................................................... 12

Comments of Otsego-Northern Catskills BOCES Officials.............................................. 13

Employment Preparation Education............................................................................................ 14

Attendance and Contact Hour Documentation..................................................................... 14

Student Folders......................................................................................................................................... 15

Policies and Procedures Manual.................................................................................................... 16

Recommendations..................................................................................................................................... 16

Comments of Otsego-Northern Catskills BOCES Officials.............................................. 16

Opportunities to Improve Management Processes............................................................ 17

Policies and Procedures Manuals.................................................................................................. 17

Business Management Functions............................................................................................................... 17

Purchasing Functions................................................................................................................................... 18

New Accounting Software............................................................................................................................ 18

Accounting/Auditing Functions................................................................................................................... 18

Items Observed in Board Minutes..................................................................................................... 18

Budgeting and Accounting Procedures..................................................................................... 19

Review of the General Fund Transactions................................................................................................ 19

Purchase Transactions................................................................................................................................. 20

Miscellaneous................................................................................................................................................ 20

Lack of Separation of Duties.............................................................................................................. 22

District Superintendent Attendance at Conferences Not Reviewed or Approved by the Board................................................................................................................................................. 22

Time Distribution Documentation................................................................................................... 22

Recommendations..................................................................................................................................... 23

Comments of Otsego-Northern Catskills BOCES Officials.............................................. 24

Control Environment.............................................................................................................................. 25

General Weakness in Control Environment............................................................................ 25

Recommendation....................................................................................................................................... 26

Comments of Otsego-Northern Catskills BOCES Officials.............................................. 26

Data Collection and Use......................................................................................................................... 27

FOLLOW UP - RECOMMENDATION IMPLEMENTATION PLAN........................................................ 31

Appendix A – Contributors to the Report

Appendix B – Comments of Otsego-Delaware-Schoharie-Greene BOCES Officials

Appendix C – Audit Review Proceedings

Introduction

Background

New York State’s issuance of Report Cards for school districts and for Boards of Cooperative Educational Services (BOCES) has turned public and legislative attention to student data. Chapter 436 of the Laws of 1997 made 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 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.

Otsego-Delaware-Schoharie-Greene BOCES (Otsego-Northern Catskills) is headquartered in Stamford, New York. It serves 19 component districts with enrollments of more than 11,000 students and was ranked 31st largest in the State, in terms of total fund expenditures, for the 1999-2000 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 data contained in the BOCES Report Card and the Chapter 602 Report for the period July 1, 1999 through June 30, 2000. We followed up on the status of prior recommendations made in audit report number BOC–1196-5 and reviewed the Employment Preparation Education (EPE) Program for the period July 1, 1999 through June 30, 2000. 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 BOCES management and staff; examined records and supporting documentation; sampled transactions on a non-statistical basis; and reviewed Otsego-Northern Catskills 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 Otsego-Northern Catskills BOCES Officials

Otsego-Northern Catskills BOCES officials’ comments on the matters contained in this report have been included where appropriate. They requested that their response to the preliminary audit finding be included as Appendix B to this report.

Report Card

New York State’s BOCES Report Card (Report Card), summarizes program accomplishments and services BOCES provide for children and adults. They are intended as a tool for the continuous improvement of BOCES programs and services, and for providing information to communities. The audit reviewed the 1999-2000 school year data contained in the Report Card issued in the Spring of 2001.

The Report Card displays the following programs and services: Career and Technical Education (CTE), Alternative Education, Adult Career and Technical Education, Special Education, Curriculum and Professional Development, Technology Services, the State Testing Program, School Library System, Graduation Results, and the 1998-99 Expended Budget. The State Testing figures are provided by the Department, not the BOCES, so those figures were not included in the scope of the audit.

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 the following areas in the Report Card that need improvement.

Data Accuracy and Supporting Documentation

Data included in the Report Card must be valid and reliable in order to be used effectively. BOCES officials are given the opportunity to review the Report Card prior to its release. Each section displays charts and graphs to present data on enrollment, completion, tuition, and/or data expressed as a percentage of local totals or statewide totals.

Career & Technical Education

CTE is generally a two-year program for secondary students in grades 11 and 12. The Department did not specify which date to use for enrollment figures or which students to include or exclude in the data reported. Tuition data are taken from the Chapter 602 Report.

The audit found the following issues when reviewing this section of the Report Card.

The former District Superintendent (DS) reviewed the submitted CTE enrollment data on the 1999-2000 BOCES Report Card. He believed the CTE figures for enrollment and completers were incorrect. He resubmitted enrollment and completer information for the 1997-98, 1998-99, and 1999-2000 school years. However, Otsego-Northern Catskills BOCES did not maintain documentation that shows what methodology was used to calculate the revised enrollment and completers. The table below shows the differences between the 1998-99 and 1999-2000 Report Card.

1997-98 Career & Technical Education Enrollment & Completers:
	Per 98-99 Report Card	Per 1999-2000 Report Card	Diff	Diff as % of 98-99 Report Card
Students in 2-yr. Sequence
1st yr. of 2-yr. Sequence	208	159	49	23.56%
2nd yr. of 2-yr. Sequence	170	158	12	7.06%
Completers	133	141	(8)	-6.02%

1998-99 Career & Technical Education Enrollment & Completers:
	Per 98-99 Report Card	Per 1999-2000 Report Card	Diff	Diff as % of 98-99 Report Card
Students in 2-yr. Sequence
1st yr. of 2-yr. Sequence	238	203	35	14.71%
2nd yr. of 2-yr. Sequence	170	162	8	4.71%
Completers	166	153	13	7.83%

The audit does not believe the reported CTE enrollment or completers are correct. However, the audit only had enough information to recalculate the enrollment for the 1998-99 and 1999-2000 school years since these are the only enrollment years that will be carried to the 2000-01 Report Card.

The audit recalculated the CTE enrollment as shown on the following table.

	For 1998-99 Career & Technical Education Enrollment
		Per Audit	Per 1999-2000 Report Card	Diff	Diff as % of Report Card
Students in 2-yr. Sequence
1st yr. of 2-yr. Sequence		201	203	(2)	-0.99%
2nd yr. of 2-yr. Sequence		134	162	(28)	-17.28%
Students in 1-yr. Sequence