senate Bill S2502

Amended

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

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 18 / Jan / 2013
    • REFERRED TO EDUCATION
  • 19 / Mar / 2013
    • 1ST REPORT CAL.226
  • 20 / Mar / 2013
    • AMENDED 2502A
  • 20 / Mar / 2013
    • 2ND REPORT CAL.
  • 21 / Mar / 2013
    • ADVANCED TO THIRD READING
  • 30 / Apr / 2013
    • PASSED SENATE
  • 30 / Apr / 2013
    • DELIVERED TO ASSEMBLY
  • 30 / Apr / 2013
    • REFERRED TO EDUCATION
  • 08 / Jan / 2014
    • DIED IN ASSEMBLY
  • 08 / Jan / 2014
    • RETURNED TO SENATE
  • 08 / Jan / 2014
    • REFERRED TO EDUCATION
  • 17 / Jan / 2014
    • AMEND AND RECOMMIT TO EDUCATION
  • 17 / Jan / 2014
    • PRINT NUMBER 2502B
  • 11 / Mar / 2014
    • 1ST REPORT CAL.258
  • 12 / Mar / 2014
    • 2ND REPORT CAL.
  • 13 / Mar / 2014
    • ADVANCED TO THIRD READING
  • 20 / Mar / 2014
    • PASSED SENATE
  • 20 / Mar / 2014
    • DELIVERED TO ASSEMBLY
  • 20 / Mar / 2014
    • REFERRED TO EDUCATION

Summary

Makes internal audit functions optional by school districts unless an audit by the comptroller reveals deficiencies; provides that 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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Bill Details

Versions:
S2502
S2502A
S2502B
Legislative Cycle:
2013-2014
Current Committee:
Assembly Education
Law Section:
Education Law
Laws Affected:
Amd ยง2116-b, Ed L
Versions Introduced in 2011-2012 Legislative Cycle:
S4556

Sponsor Memo

BILL NUMBER:S2502

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 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 - S.4556 - PASSED SENATE 2012 -
S.4556 -- RULES

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.

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

                                  2502

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 18, 2013
                               ___________

Introduced  by  Sens. RANZENHOFER, DeFRANCISCO -- read twice and ordered
  printed, and when printed to be committed to the Committee  on  Educa-
  tion

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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05240-01-3

S. 2502                             2

  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.
  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.

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