Makes internal audit functions optional by school districts unless an audit by the comptroller reveals deficiencies

BILL NUMBER:S4556

Title of bill

An act to amend the education law, in relation to making internal audit functions optional by school districts unless an audit by the comptroller reveals deficiencies

Purpose or general idea of bill

To reduce the duplicative and onerous requirement of mandatory internal annual audits.

Summary of specific provisions

Section 1 - amends subdivisions one, two and seven of section 2116-b of the Education Law, as added by Chapter 263 of the Laws of 2005 and to add a new subdivision eight to change the requirement mandated by current law for school districts to perform internal audits annually. Subdivision 1, 2 and 7 remove the requirement for annual review and update of the internal audit function. New section 8 provides that the internal audit function will be optional for school districts, unless a deficiency is found by the Comptroller's Office in one of their regular audits, in which case, the school district would be required to perform bi- annual internal audits until the next Comptroller's audit.

Section 2 - provides that this act shall take effect on the first day of July next succeeding the date on which it shall have become law.

Justification

School districts are required by Education Law 2116-a to obtain annual external audits. The requirement that they also perform an internal audit each year, essentially duplicating the same efforts put into the external audit, is wasteful and represent s an unfunded mandate that puts yet one more financial burden on school districts that are facing challenging reductions in state aid. In addition to the annual external audits, school districts also must deal with regular audits by the Comptroller. One district has reported that within one twelve month span, they had to tear business office workers away from their usual duties to work with auditors for five separate audits - two internal audits, two external audits and one Comptroller audit. It is critical that the state begin to reduce wasteful and duplicative mandates on our schools to reduce costs, and by extension real property taxes on our residents and businesses.

Prior legislative history

New bill.

Fiscal implications

Savings to school districts across the state.

Effective date

This act shall take effect on the first day of July next succeeding the date on which it shall have become law.