With the end of 2015, the OSC pushed out a significant number of reports as they needed to finalize reports by year-end to meet their internal goals. Within the next month or so, the OSC will be issuing their summary of the 2015 audits performed. In the meantime, agencies should review the recent reports issued, as they continue to provide insight into the things that the OSC is looking at as part of their audits. This gives you the ability to continue to strengthen the controls and documentation within your agency.
Some of the issues outlined in the recent reports include:
- Food and beverage costs which are inappropriately being charged to the programs. Remember, the only allowed food costs are for children. Food for staff or parents is not allowable.
- Employee bonuses must be performance based. The bonuses must be supported by performance reviews that are clearly linked to the bonus granted.
- Improve documentation for travel expenses. Documentation needs to include a travel log which clearly indicates the date of travel, start and end point, distance, purpose of the travel, and students seen/programs visited. This also needs to be provided for taxi and subway receipts.
- Lack of supporting documentation for repairs and maintenance, as well as supplies – it is important to maintain original documentation such as invoices and receipts which substantial the amounts being charged in both amount and purpose and corresponding program. It is the common mantra of the OSC and OAG auditors; it it is documented it didn’t happen. Make sure you have documentation for everything you did.
- Excessive executive or management compensation (that is, compensation for particular positions which are well above the regional median allowable amounts).
- Discrimination in providing benefits in favor of select management and staff without providing the same benefit to all other employees. – Any benefits given to employees must be proportionally granted to all employees of a similar class or group.
- Inappropriate and unsubstantiated allocation of costs to particular programs (when such costs belong to other NYSED or non-NYSED programs) – This could include salaries of non-SED program staff which are inappropriately being charged to the program.
- Miscalculation of employment hours and/or salary along with improper classification, as well as failure to complete contemporaneous time studies for employees, which substantiate to which programs the employees are being charged.
- Costs for consultants must be supported by invoices which clearly indicate the services being provided by the consultant and the hourly fee charged. Also, contracts must be maintained for these consultants.
- Claiming disallowed expenses (such as corporate taxes, fines and penalties, and staff entertainment or gifts) as reimbursable costs.
All costs being reported on the CFR should be supported by documentation which substantiates the charge. Even if there were no such practices in prior years, it is valuable for agencies to begin adopting these policies for years going forward. Spend the time to self-evaluate your program so your ready when it’s your time for an OSC audit.
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