State comptroller auditors found poor financial controls at the Syosset Central School District, New York State Comptroller Alan G. Hevesi said earlier this week, but did not find any spending that raised concerns of wrongdoing.

The audit, which was released earlier this week, examined administrative expenses for the school district from July 1, 2002 through August 31, 2004. Auditors found that the district lacked written policies and receipts for spending on travel and meals and identified instances where managers took personal time not granted under employment contracts, but also noted that the district had implemented some new policies. This is the ninth audit of Long Island school districts that Comptroller Hevesi's office has completed.

"Schools must have clear, written policies in place to control costs and ensure that public dollars are being used for legitimate school business," Hevesi said. "I commend board members for improving internal controls and drafting new policies for administrative expenses, but I also urge them to be mindful of their ongoing oversight responsibilities."

Findings included:

The district allowed the superintendent, deputy superintendent and director of business to take personal time that was not part of their employment contract. While no compensation was given to the managers for the time off, auditors noted that these officials may have used personal time rather than vacation time and then later converted vacation time into cash payments. The combined cash value of the personal time taken was $23,700. An attorney for the district claimed that it was a "long-standing, open and widely-known practice," even though it was never formally approved by the board of education.

The deputy superintendent, director of business operations and elementary curriculum coordinator submitted claims for mileage reimbursements for more than 49,000 miles that totaled more than $18,000. The claims did not show the dates, locations or purposes for the trips. Instead, these particular managers were allowed to submit claims that contained the total number of miles driven, typically, for a month.

The district spent about $125,000 on meals and refreshments at 983 meetings and events, including $9,530 for 52 dinner meetings for managers. No supporting documentation was provided to indicate why these expenses should be paid by the district, nor did the district have a policy governing spending on meals.

Thirty-six thousand dollars were spent on approximately 55 cell phones. Auditors found that the district did not have a written policy for cell phone use, monitor overage charges or seek reimbursement for personal calls.

The district spent $18,000 on travel and conference expenses for managers but did not require staff to submit itemized receipts so the district could verify the expenses. The district also had no limit for what officials could spend on meals or lodging.

Five thousand six hundred dollars were spent on three credit cards assigned to district personnel, but no written rules existed on how officials should use those credit cards.

In recent months, the district cancelled its credit card and requested new and detailed proposals for internal claims and independent audit services. In addition, the district adopted policies that require travelers to submit all receipts, but did not establish reasonable maximum limits for lodging and meal costs.

Auditors recommended that the district ensure that all benefits are clearly noted in employment contracts. Auditors also recommended that the board require all managers to submit detailed monthly mileage statements, limit what can be spent on meals and lodging costs, and require proper documentation for all expense claims.

The audit also addressed some concerns and questions that were raised by taxpayers.

A taxpayer suggested that the superintendent lives in Westchester County and that the school district provides her with a car and a driver each day to travel to and from work. The audit found that the school district provides the superintendent with a 2001 Toyota Avalon, pursuant to her contract, that she may use for business and personal use. In addition, she does live in Westchester, however the audit did not find any indication that the school district provides her with a driver at its expense. School officials said that she pays for the driver herself.

Another complaint raised by a number of taxpayers cited a problem with the school district paying the superintendent more than $300,000 in compensation annually. The audit found that during the 2003-2004 fiscal year, the Syosset School district paid the superintendent compensation amounts as part of her employment contract. She received a salary of $290,736, cash for 20 days of unused sick leave totaling $29,073 and cash for 25 days of unused vacation leave totaling $36,342.

In addition, during 2003-2004, the school district paid $40,000 into a 403(b) tax deferred annuity and $12,000 into a 401(a) defined contribution plan on behalf of the superintendent. There is no statutory limit as to how much the board of education may agree to pay school district officials when negotiating for their services.

In response to the audit, Superintendent of Schools Carole G. Hankin indicated that many of the recommendations have been implemented and that the district will assist the district's new internal auditor.

"We are very pleased that the state auditor has found no wrongdoing whatsoever and that every complaint made by a district resident has been investigated and proven to be completely false," said Hankin. "The Syosset School District has had a longtime practice of auditing and safeguarding against any improper use of funds. We hired an independent internal auditor who reviewed our business transactions twice monthly. We followed the auditor's recommendations to ensure that we were adhering to all laws and district guidelines. We have now hired two new firms to ensure responsible financial management. Personal business days have been in place for over 40 years. Employees are allowed personal days that can only be used for specific, approved purposes. Employees cannot use vacation or sick days for personal business. Personal business days may not be carried over from one year to the next and no employee will receive any reimbursement or compensation for unused days. Certified staff are not permitted to take vacation days when school is in session. We appreciate the thoroughness of the state auditor in examining our finances and we have already implemented several of the suggestions he has made. We are very pleased that there was no wrongdoing found and that all accusations made against the district were proven false."

A response from Hankin, as well the auditors' responses to five taxpayer concerns that were investigated, are also included in the audit. The audit is available by visiting the New York State Comptroller's website at www.osc.state.ny.us.

The Syosset School District has approximately 6,600 students, 10 education buildings and about 1,450 employees. Its 2004-05 operating budget totals about $138 million.

Nassau County Comptroller Howard Weitzman announced that his office has issued a subpoena to obtain financial records of the Syosset Sanitary District in connection with the audit of five special tax districts in Nassau.

"As part of our first-ever audit of Nassau County's special taxing authorities, our auditors are currently examining the finances and operations of five sanitary districts in the county's three townships," Weitzman said. "The Syosset Sanitary District, in the Town of Oyster Bay, is the only district that has chosen to stonewall our auditors, failing to provide financial documents despite repeated requests over the last two months. I call on the commissioners of the district to comply fully with the subpoena by the return date of Friday, May 27.

The sanitation district's new attorney, Jerry Kremer, contacted the comptroller's office and asked for an additional two days to confer with his client and was scheduled to call the office back on Wednesday to tell the comptroller whether or not the district will comply, according to Allen Morrison, Weitzman's director of communications.

"We have no problem with the audit process," said Jerry Kremer. "I just wanted to review what the comptroller was asking for and make sure they were asking for something they were entitled to. We will work in a cooperative basis with the comptroller."

"The Syosset Sanitary District is a local government agency," the comptroller said. "If the commissioners choose to continue to withhold the district's financial records from public scrutiny, they will have to explain the reason in court."

Weitzman announced in February that he would begin auditing some of the more than 400 special taxing authorities, located throughout Nassau County's three townships, which spend millions of taxpayer dollars every year with virtually no public scrutiny. The districts currently being audited are Sanitary Districts #1, #2, and #6 (Town of Hempstead), the Port Washington Garbage District (Town of North Hempstead), and the Syosset Sanitary District (Town of Oyster Bay).

"The profusion of these special districts add to the staggering tax burden in Nassau," Weitzman said. "They also tend to mask the true cost of town government. Our audits are intended to provide the overtaxed citizens of Nassau County with a better understanding of how these districts spend their money and whether or not they are efficiently run.

"There is absolutely no excuse for a public entity to refuse to cooperate with a Comptroller's audit," Weitzman added. "The taxpayers deserve to know whether these districts are being operated in the public interest."

Weitzman noted that, based on the Syosset district's 2003 annual report, the district had total expenses of about $396,000, out of which more than $67,000 went to pay legal fees. "One of the things we intend to examine closely is why about 17 percent of a sanitary district budget - more than $77 for each of the 762 families and 108 commercial businesses served by the district -- is going to pay lawyers."

The special district audits are intended to provide a better understanding of the districts' expenditures, hiring and procurement practices, and the efficiency of their operations. Based on the findings of the first group of audits, the comptroller's office will consider additional audits of special districts within its jurisdiction. Fire districts, school districts and library districts do not fall under that jurisdiction.