mineola union free school district

Division of LocaL Government & schooL accountabiLity

o f f i c e o f t h e n e w y o r k s t a t e c o m p t r o L L e r

report of ExaminationPeriod Covered:

July 1, 2014 — June 30, 2015

2015M-313

Mineola Union Free School District

Competitive Quotations

thomas p. Dinapoli

Page

AUTHORITY LETTER 1

INTRODUCTION 2 Background 2 Objective 2 Scope and Methodology 2 CommentsofDistrictOfficialsandCorrectiveAction 2

COMPETITIVE QUOTATIONS 4 Recommendations 5

APPENDIX A ResponseFromDistrictOfficials 6APPENDIX B AuditMethodologyandStandards 9APPENDIX C HowtoObtainAdditionalCopiesoftheReport 10APPENDIX D LocalRegionalOfficeListing 11

Table of Contents

11Division of LocaL Government anD schooL accountabiLity

State of New YorkOffice of the State Comptroller

Division of Local Governmentand School Accountability February2016

DearSchoolDistrictOfficials:

AtoppriorityoftheOfficeoftheStateComptrolleristohelpschooldistrictofficialsmanagetheirdistrictsefficientlyandeffectivelyand,bysodoing,provideaccountabilityfor taxdollarsspent tosupportdistrictoperations.TheComptrolleroverseesthefiscalaffairsofdistrictsstatewide,aswellasdistricts’compliancewithrelevantstatutesandobservanceofgoodbusinesspractices.Thisfiscaloversight is accomplished, in part, throughour audits,which identify opportunities for improvingdistrictoperationsandBoardofEducationgovernance.Auditsalsocanidentifystrategiestoreducedistrict costs and to strengthen controls intended to safeguard district assets.

Followingisareportofourauditof theMineolaUnionFreeSchoolDistrict,entitledCompetitiveQuotations.ThisauditwasconductedpursuanttoArticleV,Section1oftheStateConstitutionandtheStateComptroller’sauthorityassetforthinArticle3oftheNewYorkStateGeneralMunicipalLaw.

This audit’s results and recommendations are resources for district officials to use in effectivelymanagingoperationsandinmeetingtheexpectationsoftheirconstituents.Ifyouhavequestionsaboutthisreport,pleasefeelfreetocontactthelocalregionalofficeforyourcounty,aslistedattheendofthis report.

Respectfullysubmitted,

Office of the State ComptrollerDivision of Local Governmentand School Accountability

State of New YorkOffice of the State Comptroller

2 Office Of the New YOrk State cOmptrOller2

Background

Introduction

Objective

Scope andMethodology

Comments ofDistrict Officials andCorrective Action

The Mineola Union Free School District (District) is located in the Town ofNorthHempstead,NassauCounty (County).TheDistrictisgovernedbytheBoardofEducation(Board),whichiscomposedof five electedmembers.TheBoard is responsible for the generalmanagementandcontrolof theDistrict’sfinancial andeducationalaffairs.TheSuperintendentofSchoolsistheDistrict’schiefexecutiveofficerandisresponsible,alongwithotheradministrativestaff,forthe District’s day-to-day management under the Board’s direction. TheAssistant Superintendent for Business, who is the purchasingagent,isresponsibleforreviewingandapprovingpurchaseorders.

TheDistrictoperatesfiveschoolswithapproximately2,800studentsand830 employees.TheDistrict’s budgeted appropriations for the2014-15fiscalyearwereapproximately$87.8million,whichwerefundedprimarilywithrealpropertytaxes.

The objective of our audit was to review the District’s internal controls over the procurement process. Our audit addressed the following relatedquestion:

• DidDistrictofficialsobtainquotesforpurchasesthatwerenotsubjecttothecompetitivebiddingrequirements?

WeexaminedtheDistrict’sinternalcontrolsoverpurchasesthatwerenotsubjecttocompetitivebiddingrequirementsfortheperiodJuly1,2014throughJune30,2015.

We conducted our audit in accordance with generally accepted governmentauditingstandards(GAGAS).Moreinformationonsuchstandards and the methodology used in performing this audit are includedinAppendixBofthisreport.Unlessotherwiseindicatedinthisreport,samplesfortestingwereselectedbasedonprofessionaljudgment,asitwasnottheintenttoprojecttheresultsontotheentirepopulation.Where applicable, information is presented concerningthe value and/or size of the relevant population and the sample selectedforexamination.

The results of our audit and recommendations have been discussed withDistrictofficials,andtheircomments,whichappearinAppendixA, have been considered in preparing this report.District officialsagreed with our recommendations and indicated they have taken corrective action.


The Board has the responsibility to initiate corrective action. Pursuant toSection 35 ofGeneralMunicipalLaw,Section 2116-a(3)(c)ofNewYorkStateEducationLawandSection170.12oftheRegulationsoftheCommissionerofEducation,awrittencorrectiveactionplan(CAP)thataddressesthefindingsandrecommendationsinthisreportmustbepreparedandprovidedtoourofficewithin90days,withacopyforwardedtotheCommissionerofEducation.Tothe extent practicable, implementation of the CAPmust begin bytheendof thenextfiscalyear.Formore informationonpreparingandfilingyourCAP,pleaserefertoourbrochure,Responding to an OSC Audit Report, which you received with the draft audit report. TheBoardshouldmaketheCAPavailableforpublicreviewintheDistrictClerk’soffice.


Competitive Quotations

Aneffectiveprocurementprocesshelpsensurethatgoodsandservicesoftherightquality,quantityandpricearepurchasedincompliancewith Board and legal requirements, without the influence offavoritism,extravaganceorcorruption.Therefore,itisimportantthatDistrictofficialsseekcompetitionwhenavailable.GeneralMunicipalLaw(GML) requiresadvertising forcompetitivebids forpurchasecontractsthatequaloraggregatetomorethan$20,000andforpublicworks contracts that equal or aggregate to more than $35,000.1 GMLalsorequirestheBoardtoadoptawrittenprocurementpolicygoverning the purchase of goods and services that are not subject to competitivebiddingrequirements.ThispolicyshouldindicatewhenDistrictofficialsmustobtainquotations,outline theprocedures fordeterminingwhichmethodwill be used and provide for adequatedocumentation of the actions taken.

The Board has adopted a purchasing policy for the procurement of goodsandservices.However,itdoesnothavewrittenguidelinesorprocedures for seeking competition for purchases that are not subject to competitivebiddingrequirements.Whilethepurchasingpolicystatesthat the Board recognizes its responsibility to ensure the development ofproceduresfortheprocurementofgoodsandservicesnotrequiredby law tobemadepursuant tocompetitivebidding, theBoardhasnot developed procedures to address these types of purchases. The purchasing agent has informed us that individuals within the District areawarethattheyshouldobtainthreequotesforpurchasesbelowthe bidding threshold. The purchasing agent told us that he does not ensurethatquotesareobtainedorpurchasesaremadethroughaStateor County contract prior to approving the purchase orders. Duringthe2014-15fiscalyear,theDistrictmadepurchasestotaling$685,193from67vendors2thatwerebetween$5,000and$19,999.We judgmentally selected for review the highest dollar purchase made fromeachofthe23highestpaidvendorstotaling$226,353.Districtofficials did not obtain competitive quotations for purchasesmadefrom103vendorstotaling$106,952.Forexample,theDistrictdidnotobtain competitivequotationswhenpurchasingmusical equipment

1 Purchases made through State or County contracts do not need to be competitively bid.

2 Weexcludedpaymentstoprofessionalassociations,employeereimbursementsandproprietaryeducation-relatedexpensesfromourpopulation.

3 Included in this total is a purchase order for boiler repairs in the amount of$12,635thathadanincorrectcooperativebidreferencedonthepurchaseorderatthetimethepurchasingagentapprovedit.Subsequenttotheendoffieldwork,Districtofficialsprovideddocumentationforthecorrectcooperativebid.


totaling $16,698, including a piano for approximately $15,000.Districtofficialsprovideduswithasolesourceletterfromthemusicequipmentvendorwhenweinquiredaboutcompetition.AlthoughtheMusicDepartmentmaychoosetopurchaseaparticularbrand,therearemanybrandsofpianoandpossiblyothersuppliersofthatspecificbrand.Theremaining13purchasesinoursampleincludedsixmadeunderaStateorCountycontract,sixinwhichtheDistrictsolicitedatleastthreequotationsandoneinwhichitobtainedtwoquotes.4

BecausetheBoardandDistrictofficialsdidnotdevelopandenforcewritten procedures for obtaining competitive quotations for goodsand services not subject to competitive bidding, they do not haveadequateassurancethattheDistrictisreceivingthebestpricefortheitems it purchases.

Districtofficialsshould:

1. Develop written procedures for making purchases that are not subjecttothecompetitivebiddingrequirements.

2. Communicate purchasing procedures to all individuals responsible for making purchases.

Thepurchasingagentshould:

3. Ensure that adequate actions have been taken in solicitingcompetition, or applicable contracts are used, prior toapproving purchase orders.

4 TheDistrictcontacted threevendorsbutonlyreceived twoquotationsfor thispurchase.

Recommendations


APPENDIX A

RESPONSE FROM DISTRICT OFFICIALS

TheDistrictofficials’responsetothisauditcanbefoundonthefollowingpages.


APPENDIX B

AUDIT METHODOLOGY AND STANDARDS

To achieve our audit objective and obtain valid evidence, we performed the following auditprocedures:

• We interviewedDistrict officials and employees to gain an understanding of theDistrict’spurchasing procedures.

• We reviewed the District’s purchasing policy.

• Weselectedvendorsthatwerepaidatleast$5,000duringthe2014-15fiscalyearformaterialitypurposes. We used electronic cash disbursement data to determine the population of vendors whohadtotalpaymentsbetween$5,000and$19,999.Weselectedthe23vendorswhowerepaid the highest dollar amounts from within our population. We then selected the purchase orderwiththehighestdollarvalueforthesevendors.These23purchaseorderpaymentstotaled$226,353.

• We reviewed each purchase order to determine whether District officials obtainedwrittenquotationsorusedaStateorCountycontractpricewhenmakingthepurchase.

WeconductedthisperformanceauditinaccordancewithGAGAS.Thosestandardsrequirethatweplanandperform theaudit toobtainsufficient,appropriateevidence toprovidea reasonablebasisforourfindingsandconclusionsbasedonourauditobjective.Webelievethattheevidenceobtainedprovidesareasonablebasisforourfindingsandconclusionsbasedonourauditobjective.


APPENDIX C

HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT

OfficeoftheStateComptrollerPublicInformationOffice110StateStreet,15thFloorAlbany,NewYork12236(518)474-4015http://www.osc.state.ny.us/localgov/

Toobtaincopiesofthisreport,writeorvisitourwebpage:


APPENDIX DOFFICE OF THE STATE COMPTROLLER

DIVISION OF LOCAL GOVERNMENTAND SCHOOL ACCOUNTABILITYAndrewA.SanFilippo,ExecutiveDeputyComptroller

GabrielF.Deyo,DeputyComptrollerTraceyHitchenBoyd,AssistantComptroller

LOCAL REGIONAL OFFICE LISTING

BINGHAMTON REGIONAL OFFICEH.ToddEames,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Suite170244 Hawley StreetBinghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313Email:[email protected]

Serving:Broome,Chenango,Cortland,Delaware,Otsego,Schoharie,Sullivan,Tioga,TompkinsCounties

BUFFALO REGIONAL OFFICEJeffreyD.Mazula,ChiefExaminerOfficeoftheStateComptroller295MainStreet,Suite1032Buffalo,NewYork14203-2510(716)847-3647Fax(716)847-3643Email:[email protected]

Serving:Allegany,Cattaraugus,Chautauqua,Erie,Genesee,Niagara,Orleans,WyomingCounties

GLENS FALLS REGIONAL OFFICEJeffreyP.Leonard,ChiefExaminerOfficeoftheStateComptrollerOne Broad Street PlazaGlensFalls,NewYork12801-4396(518)793-0057Fax(518)793-5797Email:[email protected]

Serving:Albany,Clinton,Essex,Franklin,Fulton,Hamilton,Montgomery,Rensselaer,Saratoga,Schenectady,Warren,WashingtonCounties

HAUPPAUGE REGIONAL OFFICEIraMcCracken,ChiefExaminerOfficeoftheStateComptrollerNYSOfficeBuilding,Room3A10250VeteransMemorialHighwayHauppauge,NewYork11788-5533(631)952-6534Fax(631)952-6530Email:[email protected]

Serving:NassauandSuffolkCounties

NEWBURGH REGIONAL OFFICETennehBlamah,ChiefExaminerOfficeoftheStateComptroller33AirportCenterDrive,Suite103NewWindsor,NewYork12553-4725(845)567-0858Fax(845)567-0080Email:[email protected]

Serving:Columbia,Dutchess,Greene,Orange,Putnam,Rockland,Ulster,WestchesterCounties

ROCHESTER REGIONAL OFFICEEdwardV.Grant,Jr.,ChiefExaminerOfficeoftheStateComptrollerThe Powers Building16WestMainStreet,Suite522Rochester,NewYork14614-1608(585)454-2460Fax(585)454-3545Email:[email protected]

Serving:Cayuga,Chemung,Livingston,Monroe,Ontario,Schuyler,Seneca,Steuben,Wayne,YatesCounties

SYRACUSE REGIONAL OFFICERebeccaWilcox,ChiefExaminerOfficeoftheStateComptrollerStateOfficeBuilding,Room409333E.WashingtonStreetSyracuse,NewYork13202-1428(315)428-4192Fax(315)426-2119Email:[email protected]

Serving:Herkimer,Jefferson,Lewis,Madison,Oneida,Onondaga,Oswego,St.LawrenceCounties

STATEWIDE AUDITSAnnC.Singer,ChiefExaminerStateOfficeBuilding,Suite170244 Hawley Street Binghamton,NewYork13901-4417(607)721-8306Fax(607)721-8313

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