State Comptroller Thomas DiNapoli gave a harsh account of the Rochester City School District’s payroll processes this morning, calling them “disorganized, highly decentralized, and not administered uniformly, resulting in errors that are costing taxpayers.”
DiNapoli made the statement as he released a new audit
of the district, conducted from July 2014 to October 2016, which also cited numerous problems with its purchasing practices.
To conduct the study of the district’s payroll practices, state auditors looked at payments to 45 district employees, some selected randomly, some selected deliberately because of such factors as the large number of checks written to them. Auditors found that of $3.8 million in salary and wages paid to those 45 employees, “incorrect or unsupported payments” were made to 41 of them.
When the auditors widened their sample and looked at about 1,100 payroll payments made to additional employees, they found errors in 97 percent, totaling more than $356,000 in payments that were either wrong or couldn’t be supported with proper documentation.
In their criticism of the district’s purchasing procedures, the auditors said the district failed to properly monitor employees’ purchasing practices. “Hundreds of staff” used the district’s specialized credit cards for purchases outside of the district’s purchase-order process. And the district didn’t consistently use competitive bidding when it should. As a result, auditors say, the district may have overpaid for its purchases of goods and services.
The Rochester school district has operated on a budget of about $865 million annually in recent school years. DiNapoli noted that the majority of the budget – about $640 million – goes to employee payroll, which seems to magnify the seriousness of its financial management problems.
The audit contains recommendations for improvement, and school district officials largely agreed with those. But in a written response to the audit sent to the Comptroller’s office last month, the officials challenged what they is the implication that the report makes to general readers: that payroll inaccuracies are widespread. They argue that the audit’s small sample doesn’t represent the entire payroll generated by the district’s system.
District officials say that payroll is decentralized only in certain areas, and a lack of proper documents doesn’t mean the payments were not properly authorized.