Extends provisions for internal audits by school districts from annually to every five years.
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.
STATE OF NEW YORK ________________________________________________________________________ 2501 2013-2014 Regular Sessions IN 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 ANYEXPLANATION--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.