Establishes an independent office of school inspector general for school districts outside of the city of New York

Summary of provisions

Section one of the bill adds a new section 33-b to the General Municipal Law establishing a School Inspector General (SIG) within the Office of the State Comptroller. The SIG will review the financial affairs of a school district including, but not limited to: (i) examining and evaluating the financial records, transactions, contracts, revenues and expenditures generated by a school district each year; (ii) examining and evaluating budgeting and accounting procedures and processes; (iii) receiving complaints relating to alleged fraudulent or illegal activities of such school districts and investigating such complaints; (iv) examining and reviewing all construction contracts entered into by such school districts; and (v) reviewing procurement competitive bidding procedures.

The SIG will be entitled to information from the department of education as necessary to carry out his/her duties.

The SIG will have the power to access: (i) all school financial documents and records of the school district; (ii) all backup financial, budgeting and accounting documentation necessary to verify transactions in a given year; (iii) any prior year data when necessary to verify current financial conditions. In addition, the SIG will have the power to: (i) assess the current financial and budgeting practices to ensure that budget process is accurate; (ii) subpoena any and all relevant budget documents; and (iii) hire support personnel, including, but not limited to, attorneys, auditors and support staff.

The SIG will prepare a report providing a detailed analysis of the issues reviewed for each school district and the current financial status of each such school district. Such report will be delivered to the Governor, the Minority and Majority Leaders of both houses of the Legislature and the State Education Department, and shall be available to the public for at least three years.

If the SIG uncovers any fraud, abuse or violation of state law at any time during or after review, he or she must immediately report such finding to the governor and the commissioner of education and provide the appropriate law enforcement agency with all documentation supporting such conclusions.

School district reviews will be conducted pursuant to a schedule established by the SIG. The specific school districts chosen must remain confidential within the office of the state comptroller. The president of the school board and the superintendent will be notified at least ten working days prior to the commencement of such review and upon such notice, prepare all documents necessary for timely completion of such review. In addition, the SIG may conduct follow-up reviews of a school district at any time to determine whether recommended changes have been implemented.

Section 2 provides for an effective date one hundred and eighty days after enactment.

Justification

This bill would establish, within the Office of the State Comptroller a School Inspector General with authority to review and assess the activities of school districts outside of the City of New York, including but not limited to, the fiscal performance of the school district and its financial practices.

In addition, this legislation requires the SIG to draft a report with a detailed analysis of the current financial status of the district, including all of its financial practices as they relate to the overall and budgetary and financial management of the district.

Together with the auditing of school districts currently being carried out by the Comptroller, this bill would provide a comprehensive approach to ensure accountability and restore public confidence in school district financial operations.

Legislative history

2011-12 S.3861: 2009-10 S.2812; 2007-08, S.3208-B, 2005-06, S 909-A; 2004, S.7484.

Fiscal implications

In order to implement the provisions of this legislation, an appropriation of $3.9 million to the Office of the State Comptroller would be necessary for the hiring of approximately 48 professional and support personnel such as attorneys, auditors, data analysts for data mining, investigators, management and support staff. In addition, the appropriation would cover non-personal service costs such as travel, office space, and computer equipment.

Local fiscal implications

None.

Effective date

This act shall take effect on the one hundred eightieth day after it shall have become law; provided, however, that effective immediately, any rule or regulation necessary for the timely implementation of this act shall be promulgated on or before such effective date.