senate Bill S2502B

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:S2502B

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:

2011/2012- S.4556 - PASSED SENATE/RULES
2013 - S2502-A PASSED SENATE

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--B

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 18, 2013
                               ___________

Introduced  by  Sens.  RANZENHOFER, DeFRANCISCO, MARCHIONE -- read twice
  and ordered printed, and when printed to be committed to the Committee
  on Education -- reported favorably from  said  committee,  ordered  to
  first  report, amended on first report, ordered to a second report and
  ordered reprinted, retaining its place in the order of  second  report
  -- recommitted to the Committee on Education in accordance with Senate
  Rule  6,  sec.  8  --  committee  discharged,  bill  amended,  ordered
  reprinted as amended and recommitted to said committee

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, subdivisions 1 and 7 as added by chapter 263 of the laws  of  2005,
and subdivision 2 as amended by section 4 of part A of chapter 57 of the
laws  of  2013,  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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05240-03-4

S. 2502--B                          2

  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 one thousand five 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-
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 BIENNIAL 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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