Makes internal audit functions optional by school districts unless an audit by the comptroller reveals deficiencies; where deficiencies are found, school districts shall perform bi-annual internal audits until the comptroller conducts another audit of such school district.

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S4556-2011 Actions

• Jun 21, 2012: COMMITTED TO RULES
• May 30, 2012: ADVANCED TO THIRD READING
• May 23, 2012: 2ND REPORT CAL.
• May 22, 2012: 1ST REPORT CAL.864
• Jan 4, 2012: REFERRED TO EDUCATION
• Jan 4, 2012: returned to senate
• Jan 4, 2012: died in assembly
• Jun 14, 2011: referred to education
• Jun 14, 2011: DELIVERED TO ASSEMBLY
• Jun 14, 2011: PASSED SENATE
• May 23, 2011: ADVANCED TO THIRD READING
• May 18, 2011: 2ND REPORT CAL.
• May 17, 2011: 1ST REPORT CAL.729
• Apr 12, 2011: REFERRED TO EDUCATION

S4556-2011 Meetings

Education: May 17, 2011, Education: May 22, 2012

S4556-2011 Calendars

Active List: Jun 14, 2011 , Floor Calendar: May 18, 2011 , Floor Calendar: May 23, 2011 , Floor Calendar: May 23, 2012 , Floor Calendar: May 24, 2011 , Floor Calendar: May 25, 2011 , Floor Calendar: May 30, 2012 , Floor Calendar: May 31, 2012 , Floor Calendar: Jun 1, 2011 , Floor Calendar: Jun 2, 2011 , Floor Calendar: Jun 4, 2012 , Floor Calendar: Jun 5, 2012 , Floor Calendar: Jun 6, 2011 , Floor Calendar: Jun 6, 2012 , Floor Calendar: Jun 7, 2011 , Floor Calendar: Jun 11, 2012 , Floor Calendar: Jun 12, 2012 , Floor Calendar: Jun 13, 2011 , Floor Calendar: Jun 13, 2012 , Floor Calendar: Jun 14, 2011 , Floor Calendar: Jun 14, 2012 , Floor Calendar: Jun 18, 2012 , Floor Calendar: Jun 19, 2012 , Floor Calendar: Jun 20, 2012 , Floor Calendar: Jun 21, 2012

S4556-2011 Votes

S4556-2011 Memo

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.

S4556-2011 Text

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

                                    4556

                         2011-2012 Regular Sessions

                              I N  SENATE

                               April 12, 2011
                                 ___________

  Introduced  by  Sen.  RANZENHOFER -- 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 making internal  audit
    functions  optional  by  school districts unless an audit by the comp-
    troller reveals deficiencies

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


    Section  1. Subdivisions 1, 2 and 7 of section 2116-b of the education
  law, as added by chapter 263 of the laws of 2005, are amended and a  new
  subdivision 8 is added 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.
    2. School districts of less than eight teachers, school districts with
  actual general fund expenditures totaling less than five million dollars
  in the previous school year, or school districts with actual  enrollment
  of less than three hundred students in the previous school year shall be
  exempt   from  this  requirement.  Any  school  district  claiming  such
  exemption shall [annually] certify to the commissioner that such  school
  district meets the requirements set forth in this subdivision.
    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-

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD10627-01-1

 S. 4556                             2

  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.
    8.  NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO  THE  CONTRARY,  THE
  INTERNAL  AUDIT  FUNCTION  ESTABLISHED PURSUANT TO THIS SECTION SHALL BE
  OPTIONAL BY ALL SCHOOL DISTRICTS UNLESS THE COMPTROLLER FINDS  DEFICIEN-
  CIES  IN  THE  AUDIT  PERFORMED  PURSUANT TO SECTION THIRTY-THREE OF THE
  GENERAL MUNICIPAL LAW. IF DEFICIENCIES ARE  FOUND  BY  THE  COMPTROLLER,
  SCHOOL DISTRICTS SHALL PERFORM BI-ANNUAL INTERNAL AUDITS UNTIL THE COMP-
  TROLLER CONDUCTS ANOTHER AUDIT OF SUCH SCHOOL DISTRICT.
    S  2.  This act shall take effect on the first of July next succeeding
  the date on which it shall have become a law.