S2501-2013 Actions

• Jan 18, 2013: REFERRED TO EDUCATION

S2501-2013 Memo

BILL NUMBER:S2501

TITLE OF BILL:  An act to amend the education law, in relation to
extending provisions for internal audits by school districts from
annually to every five years

PURPOSE OR GENERAL IDEA OF BILL: To reduce the duplicative and onerous
requirement of both internal and external annual audits.

SUMMARY OF SPECIFIC PROVISIONS: Section 1 - amends subdivisions one
and seven of section 2116-b of the Education Law, as added by Chapter
263 of the Laws of 2005 to change the requirement mandated by this
section for school districts to perform internal audits annually to
require such audit every five years.

Section 2 - provides that this act shall become effective 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 represents 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: 2011-12 - S.4486/A.8404 PASSED
SENATE/education

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.

S2501-2013 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    2501

                         2013-2014 Regular Sessions

                              I N  SENATE

                              January 18, 2013
                                 ___________

  Introduced by Sens. RANZENHOFER, BONACIC, DeFRANCISCO, LARKIN, SEWARD --
    read  twice  and  ordered printed, and when printed to be committed to
    the Committee on Education

  AN ACT to amend the education law, in relation to  extending  provisions
    for  internal  audits  by school districts from annually to every five
    years

    THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section  1.  Subdivisions  1  and 7 of section 2116-b of the education
  law, as added by chapter 263 of the laws of 2005, are amended to read as
  follows:

    1. No later than July first, two thousand six,  each  school  district
  shall  establish  an internal audit function to be in operation no later
  than the following December thirty-first. Such function  shall  include:

  (a)  development  of a risk assessment of district operations, including
  but not limited to, a review of financial policies  and  procedures  and
  the  testing and evaluation of district internal controls; (b) [an annu-
  al] A review and update of such risk assessment; and (c) preparation  of
  reports[,  at least annually or more frequently as the trustees or board
  of education may direct,]  which  analyze  significant  risk  assessment
  findings,  recommend  changes  for  strengthening  controls and reducing
  identified risks, and specify  timeframes  for  implementation  of  such
  recommendations.    AUDITS  PERFORMED  PURSUANT TO THIS SECTION SHALL BE
  COMPLETED EVERY FIVE YEARS.
    7. Nothing in this section shall be construed as  requiring  a  school
  district  in any city with a population of one hundred twenty-five thou-
  sand or more to replace or modify an existing  internal  audit  function
  where  such  function already exists by special or local law, so long as
  the superintendent of the district [annually] certifies to  the  commis-
  sioner  that  the  existing internal audit function meets or exceeds the
  requirements of this section;  PROVIDED,  HOWEVER,  NOTWITHSTANDING  ANY

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD05164-01-3

 S. 2501                             2

  SPECIAL  OR  LOCAL  LAW  TO THE CONTRARY, SCHOOL DISTRICTS SHALL PERFORM
  SUCH INTERNAL AUDITS EVERY FIVE YEARS.
    S  2.  This act shall take effect on the first of July next succeeding
  the date on which it shall have become a law.