The New York City school system has squandered significant funds by failing to comply with guidelines for travel and conference expenses, an audit by City Comptroller Scott M. Stringer has found.
Stringer says in a news release that his office audited $1,060,056 worth of expense vouchers and found that 93 percent failed to comply with city education department's own rules, directives of the comptroller’s office, or both.
In Fiscal Year 2017, the education department paid 42,508 travel expense vouchers totaling more than $20 million.
“When it comes to our schools, every single dollar counts," Stringer says. "We can’t afford to waste dollars that should go to our kids and classrooms."
Among the noncompliant payments were:
•$14,023 in overcharges that the school system paid to two vendors, including an $11,913 overpayment to a Brooklyn hotel for a meeting space;
•$233,167 in payments to hotels and other venues for meetings with no effort—as required by the rules—to find free and low-cost space in school buildings or other institutions, including $12,883 the school system spent on an overnight staff retreat at the Tarrytown House Estate on the Hudson in violation of guidelines;
•$269,684 for 11 purchases that required, but lacked, written bids, such as a $17,847 catering bill, and a $99,716 payment to a Brooklyn hotel for a conference on the core curriculum; and,
•$14,956 in credit card charges with no supporting documentation, including $2,821 in charges at a resort in Nashville, Tenn.
The audit also identified $60,422 in wasted public funds resulting from the education department's prepayment of nonrefundable charges for a proposed trip to Cuba for 16 students and six staff members. When the chancellor canceled the trip, department lost the $60,422 and then spent an additional $97,000 for a replacement trip to Brazil for most of the same group.
The New York Daily News reports that after the audit report was issued, Mayor Bill di Blasio vowed to fix the problems.
“We have to make sure that money is used appropriately and anything inappropriate has to be stopped, and there may have to be some consequences for some people involved,” de Blasio says. “I want to see a full accounting. I want to make sure money is used right. If anyone didn’t use the money right, there needs to be consequences.”
The Comptroller’s office says the education department is expected to comply with a set of requirements for travel expenses and fund administration established by City Comptroller’s directives, which are binding guidelines for spending. The agency’s policy for payment of employees’ travel expenses requires all travel to be approved ahead of time.
However, the audit found that the school system failed to follow its policy, approving 14 payments worth $221,638 without evidence that the expenditures had been authorized by the appropriate officials. The agency also failed to maintain one or more required items of supporting documentation for 43 travel expense payments that totaled $246,799.
Other instances of noncompliance found that the education department:
•Paid $42,743 for employees to attend out-of-town conferences and training programs without the written justification, required by policy, to show that the expenses were necessary for the employees’ professional and educational enhancement;
•Approved payment of $12,245 for out-of-town lodging and meals, which exceeded the maximum allowable rate of $9,315 by $2,930 (a 31 percent increase) without the required justification and approvals.
The audit also found that the school system incorrectly reported travel expenses in its accounting system and consequently overstated its travel expenditures by more than $3 million in Fiscal Year 2017.
To address these issues, the Comptroller’s Office made the following recommendations:
•Recoup the overcharges of $14,023 paid to vendors as identified in this audit.
•Ensure that proper justification for staff’s out-of-town travel is obtained and documented in the appropriate records relating to the travel expense before approving payment.
•Obtain proper approval from education department's Division of Financial Operations before approving or paying a lodging charge for an employee at a rate that exceeds the applicable United States General Services Administration rate.
•Ensure that all required approvals are obtained before travel commences and before the agency incurs expenses for lodging, meals, and conference attendance.
•Ensure that supporting documentation for travel and related expenses is properly maintained and available for audit and other authorized purposes.
•Consider requiring approval by the chancellor or his or her designee for student trips that involve international or overnight travel and any trip for which a concern about security or safety is identified.
