NY State Senate Bill 2019-S3901

Senate Bill S3901

2019-2020 Legislative Session

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

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Archive: Last Bill Status - In Senate Committee Education Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to education
Feb 21, 2019	referred to education

co-Sponsors

2019-S3901 (ACTIVE) - Details

See Assembly Version of this Bill:: A5906
Current Committee:: Senate Education
Law Section:: Education Law
Laws Affected:: Amd §2116-b, Ed L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S4556
2013-2014: S2502
2015-2016: S1052, A10363
2017-2018: S2641, A2365

2019-S3901 (ACTIVE) - 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.

2019-S3901 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S3901

SPONSOR: RANZENHOFER
 
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 comp-
troller 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 chal-
lenging reductions in state aid. In addition to the annual external
audits, school districts also must deal with regular audits by the Comp-
troller. 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.4556 - PASSED SENATE/RULES
2013-14 - S2502-B - PASSED SENATE
2015-16 - S.1052/A.10363 - PASSED SENATE/Education
2017 - S.2641/A.2365 - PASSED SENATE/Education
2018 - S.2641/A.2365 - RULES/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.

2019-S3901 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3901
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 21, 2019
                                ___________
 
 Introduced  by  Sens. RANZENHOFER, FUNKE, GALLIVAN, 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 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.
   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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01617-01-9

 S. 3901                             2
 
 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.
   §  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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Senate Bill S3901

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Sponsored By

Michael H. Ranzenhofer