Governor Signs Senator Marcellino's School Audit Legislation And School Fiscal Accountability Legislation Into Law

Senator Carl L .Marcellino joined Governor George E. Pataki today to announce the signing of a package of legislation into law that will strengthen oversight and increase accountability of school district finances, while protecting property taxpayers from fraud and abuse.

"I am pleased to sign this comprehensive legislation into law, providing greater oversight and accountability of school district finances and ensuring that parents, students and teachers have the ultimate confidence in the school officials with whom they have placed their trust," Governor Pataki said

Senator Carl L. Marcellino said, "There are two things that all New Yorkers agree upon when it comes to education. We want our children to receive the best education possible, and we want to ensure that our hard earned tax dollars are being spent wisely by our school districts. By this historic law will protect our taxpayers from fraud."

The School Fiscal Accountability legislation includes two separate bills. The first bill requires that school board members receive six hours of financial oversight training, while establishing an internal audit mechanism within each school district. In addition, the new law mandates a competitive Request for Proposal or RFP process for selecting independent auditors every five years. These external auditors would conduct independent audits annually. The bill also requires school boards to create audit committees to work with the auditors and school boards throughout the audit process and to develop a public formal response for the school board to issues raised in the audit.

The second bill requires that all school districts, boards of cooperative educational services (BOCES) and charter schools be audited by the State Comptroller at least once prior to 2010. Subsequent State audits would be determined according to a risk assessment established by the Comptroller.

The Comptroller would report his findings to the Governor and Legislature in December of each year.

Key elements of the proposal called for:

Creation of internal school district audits;

Mandatory change in independent auditors every 3 years using a

competitive process;

Creation of audit committees to oversee annual school district audits;

Review of identified school districts' financial controls; and

School Board member training.

Signing the bills into law makes $2.9 million in funding available to conduct the various audits, enabling the Office of State Comptroller to examine financial documents and records, assess the

current financial practices of schools to ensure they are consistent with established standards, and determine that school districts have in place adequate protections against fraud, theft or professional misconduct.

State Comptroller Alan Hevesi thanked the State Education Department for contributing its expertise during the development of the plan, and said that the bills would not have been passed by both houses without the leadership of Speaker Silver and Assemblymember Tom DiNapoli in the Assembly and Majority Leader Bruno and Senators Steve Saland and Carl Marcellino in the Senate.

"These bills are examples of what we can accomplish when all parties work together," Hevesi said. "These new laws represent real reform and a significant step forward in improving school governance in New York State. I look forward to continuing to work with the Governor and Legislature to protect taxpayers and to help improve educational opportunities for all of New York’s students."

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