During the 2020-2021 school year, New York State audited over 105 school districts for compliance with everything from budgeting and claims auditing to procurement and mental health training (plus a whole lot more). Reports summarizing findings and key recommendations are posted on the Office of the State Comptroller website. Since auditing is part of our DNA (we’re accountants, after all) we figured we’d take a look and summarize findings that may be of interest to you.

We reviewed all the 2022 result reports posted as of September 8 of this year. Of the districts audited, less than ten met all prescribed requirements; the balance received key recommendations on how to improve services, processes, and more going forward. More than a few audits uncovered potential savings opportunities ranging from several hundred dollars to several hundred thousand dollars. One even resulted in an arrest for misappropriation of funds!

Below you’ll find highlights of findings for the five areas audited most frequently. Perhaps you’ll come across a few items to help your district save time and money.

Mental Health Training Under the New York Students Against Violence in Education (SAVE) Act

Out of the 20 districts audited, two provided all 12 recommended components of mental health training for all staff by September 15, 2020, as required by law. The audit results, which made headline news, noted whether all 12 training components were made available to all staff; whether the district tracked attendance; and whether training was completed by the September 15 deadline.

Network Access Controls/User Accounts

19 districts were audited. None met all requirements which included regular reviews and updates of network user accounts for necessity and appropriateness; immediately disabling unneeded accounts; having written procedures for managing system access; regularly reviewing and securing access with proper user permissions to the network and financial application; having a password security policy; having a policy clearly stating what is an acceptable use of a district computer, how you monitor compliance and provide training; having clear roles and responsibilities for cybersecurity; having an up-to-date disaster recovery plan that has been shared with all responsible parties; periodically comparing installed software to an authorized software inventory list, and reviewing whether you are at risk for data loss and operational disruption. More sensitive issues were communicated confidentially to school officials.

Procurement

16 districts were audited. None met all requirements which included ensuring goods and services are always procured in the best interest of taxpayers; seeking competition for professional services in accordance with a written procurement policy; periodically reviewing service provider contracts to determine the need for new RFPs; having a written procurement policy specifying when and how frequently officials should issue RFPs and including detailed guidance for procuring goods and services not subject to competitive bidding or when there is no possible competition; having the Board review the policy annually; saving on things like fuel by using the Office of General Services (OGS) fuel card program or state contract; comparing bills against awarded contract prices to ensure billing is correct and does not include taxes and unnecessary fees; awarding contracts in a manner consistent with New York State General Municipal Law; and fully evaluating and comparing benchmark rates before entering a contract.

Financial Management & Controls

14 districts were audited; none met all requirements, which included having a realistic budget; managing fund balance properly and in accordance with the law; having an adopted budget accurately estimate appropriations to fund options; being transparent about funding reserves; having appropriate workers’ compensation reserves, unemployment insurance reserves, and a retirement contribution reserve fund; not levying more taxes than needed to fund operations; discontinuing unnecessary appropriations of fund balance; using overfunded reserves to benefit district residents; keeping surplus fund balance at or below the 4% statutory limit; creating accurate and reliable financial reports; Finance Committee participation in budgeting and review of reports; consulting legal counsel regarding excess reserve funds, as well as the appropriate remedy for addressing improper funding of and transfer of reserve funds; having a debt reserve and using funds to pay debt as required; having a written reserve policy establishing targeted or optimal funding levels; and having the Board define financial objectives including purpose, funding goals, conditions for fund use and replenishment.

IT Related

12 districts were audited. Interestingly, the four that were audited for compliance with FCC Internet bandwidth and download speed met all requirements. Requirements that were not met include having and testing an IT contingency plan to minimize operational disruptions; having a written policy detailing proper use of fixed IT assets; having procedures to affix tags to assets; tracking inventory and equipment, conducting an annual physical inventory, and removing devices not in service; and having your server room establish physical security and environmental controls.

What about the remaining audits? Four focused on claims auditing; three focused on Extra Classroom Activity Funds; five were on salary, wages, and leave benefits; three were on capital projects; one focused on website transparency and another focused on electronic records and reports; two were on non-resident student tuition; three were on special education services and Medicare reimbursements; and one was conducted for each of the following – electronic records and reports, online banking, safeguarding personal, private and sensitive information on mobile computing devices, property disposal, and transportation department operations. For more details, visit the NYS Comptroller website to review audit reports.

While you’re using audit results to help your district operate more efficiently and effectively, remember, RBT CPAs is here to partner with you on financial audits, accounting, taxes, and more. We’ve been partnering with school districts and institutions of higher education for over 50 years in the Hudson Valley and beyond. Interested in learning more? Give us a call.

On June 25, 2022, President Biden signed the Keep Kids Fed Act to fund summer food programs through September 30 and the Universal School Meals Program through June 30, 2023. However, there are a few changes districts, parents and students need to know going into the 2022-2023 school year.

First, a little background… The Universal School Meals Program was a temporary measure adopted during the COVID pandemic to ensure all school-aged children would have access to a free breakfast and lunch. Food services requirements like having to serve meals in congregate settings, parents having to meet certain income for free and reduced cost programs, and what could be served were waived given the impact of COVID and supply chain issues.

Now that the worst of the pandemic has passed, the Keep Kids Fed Act extends some flexibilities offered through the Universal School Meals Program and ends others for the 2022-2023 school year. Here’s what’s happening:

• For the first 30 operating days of the 2022-2023 school year, a student’s eligibility for free meals is determined by the preceding year’s eligibility, unless eligibility determination for the current school year occurs first – then that takes precedence.
• Free and discounted meals will only be available to a student whose family meets income eligibility guidelines and completes the required application. (The only exception is if your school uses the “Community Eligibility Provision” – in this case, meals will be free to all).
• To help offset cost increases for food and operations, the reimbursement rate is changing. Schools will receive 40 cents more for each lunch and 15 cents more for each breakfast served, along with an annual inflation adjustment. However, according to ABC 7 Eyewitness News, this will still amount to less than the reimbursements provided during COVID.

In addition, the USDA granted certain waivers by state that apply if meal service is interrupted by the pandemic again. Click here to view waivers for each state, including New York.

If your district hasn’t already started getting everything set to comply with the new law, now is the time. Numerous districts have already started communicating with families via email to let them know schools are returning to meal program guidelines and processes used pre-Covid:

1. Unless a child is approved for the reduced price or free meal program, he/she will be responsible for paying the full cost of in-school meals. Due to inflation, those who do pay the full price for lunch will likely be paying higher prices than those in effect before the pandemic.
2. If your district requires families to set up and fund an account to pay for meals at school, you’ll need to provide instructions on what to do and how. This will be especially important for families whose child(ren) entered the school system in 2020 or 2021, as they may not have any experience with the process.
3. Children in families with income under certain limits may be eligible for free or reduced cost meals. Families must complete and submit an application to be approved for this program through the 2022-2023 school year. Consider sending information to families, providing details about the application process (i.e., how to apply and when) and letting them know the school will communicate the outcome (whether they are approved for reduced price, free, or full-price meals). Note: If a family receives TANF and/or SNAP benefits, they can submit a certification letter from the Local Department of Social Services or complete an application by simply providing case number, children’s names, and an adult signature.

At the same time, all the behind-the-scenes work needs to take place to ensure your school breakfast and lunch programs are ready to be up and running the first day of school. This includes School Food Authorities completing their Annual Renewal prior to the start of the school year.

This may not be the end of the free breakfast and lunch discussion. Several states have opted to continue the program and others are putting it on the ballet. New York isn’t there yet, but you never know.

For more details about eligibility, applications, and more, visit the New York State Education Department Child Nutrition Knowledge Center and check out the USDA FAQs.

If you need accounting, tax, or auditing assistance related to your district’s meal program, or any school finances for that matter, contact RBT CPAs. We’ve been helping school districts in the Hudson Valley and beyond for over 50 years with their accounting, taxes, and audits so their leaders are freed up to focus on their biggest priority: educating children.

The pandemic shed light on what many Americans already knew: internet access is a necessity for everyday life. The Digital Divide was perhaps the most pronounced within the country’s outdated education infrastructure. Digital learning proved particularly challenging for rural and lower-income neighborhoods as well as in communities of color.

To get students everywhere up to speed with internet access at the height of the pandemic, communities scrambled to allocate funds to pay for laptops, tablets, modems, Wi-Fi hotspots, routers, and other broadband devices. To date, New York State has been granted billions in general aid for elementary and secondary education administered by the State Education Department to support pandemic preparedness and response efforts, including maintaining operations, staff training and educational technology, and addressing learning loss related to the pandemic. Of the $14 billion in anticipated resources, $2 billion was spent from 2021-22, and the balance is expected to be spent in subsequent years through 2025.

Now as we head into the upcoming academic year, what happens with all the new technology school systems have invested in over the past few years?

Technology adopted out of necessity during statewide shutdowns is largely here to stay. According to two years’ worth of EdWeek Research Center Data, video conferencing tools remain in high demand even as the nation’s schools are largely back to full-time in-person instruction. Applications include parent-teacher conferences, guest-speaker programs, school board meetings, teacher professional development, telemedicine appointments, online tutoring programs, and full-time remote learning options that districts have created in record numbers. This becomes particularly important with a projected 20 percent of K-12 central-office employees expected to work remotely or both remotely and in person. Educators and administrators are also reportedly continuing to invest in social-emotional learning tools and digital math tools.

Of course, with new technology comes additional heightened security risks. In its annual State of K–12 Cybersecurity Year in Review report released early this year, national nonprofit K–12 Security Information Exchange revealed that ransomware has become the most common type of publicly disclosed cyber incident at U.S. schools. According to the Federal Bureau of Investigation (FBI) and the Department of Defense’s Defense Technical Information Center, some of the most common types of digital threats include:

• Data Breaches: Leaks of sensitive, protected, or confidential data from a secure to an insecure environment that are then copied, transmitted, viewed, stolen, or used in an unauthorized manner.
• Denial of Service: When a server is deliberately overloaded with requests such that the Website shuts down.
• Spoofing/Phishing: Both spoofing and phishing involve the use of fake electronic documents.
• Malware/Scareware: Malware is illicit software that damages or disables computers or computer systems. Like malware is scareware, which is malware that uses social engineering to cause fear or anxiety so that a user buys unwanted and unneeded software, such as antivirus software
• Ransomware: A form of malware in which perpetrators encrypt users’ files, then demand the payment of a ransom—typically in virtual currency such as Bitcoin—for the users to regain access to their data. Ransomware can also include an element of extortion, in which the perpetrator threatens to publish data or images if the victim does not pay.

The U.S. Department of Education’s Office of Safe and Supportive Schools administered the REMS TA Center to help issue guidance to help schools stay protected from cyber threats that are inevitable with the integration of modern and emerging technologies. There are a lot of useful resources here but we will summarize some of the most effective ways to keep your school protected.

Preparing for Threats

Schools and school districts can take a variety of actions to prevent, protect from, mitigate the effects of, respond to, and recover from cyber threats. These can be conducted before, during, and after an incident. To protect networks and systems as part of an overall preparedness program, schools and school districts can do the following:

Develop and promote policies: Before students, teachers, or staff access the school’s or school district’s networks and systems, they should be aware of any policies, rules, or laws regarding their use. IT staff should also be aware of local, state, and Federal regulations regarding information security and privacy.

Proper Data Storage: Store data securely to ensure that the whole school community’s data are kept private and to comply with the Family Educational Rights and Privacy Act (FERPA). Ease of access to and use of cloud-based software makes this issue particularly important, as this technology allows teachers and staff members to easily store and share students’ personal information.

Have a Back-Up Plan: Schools and school districts also need to regularly back up their data in case of accidental or deliberate corruption or destruction of data. Create firewalls and an approved list of individuals who have access to the school’s or school district’s networks and systems. The list should be regularly reviewed to ensure that only those individuals who have permission to access the systems can do so.

With more emerging tech being integrated into schools every year, it’s more important than ever before to monitor networks continually to assess the risk from cyber threats. As always, your partners at RBT CPAs are available to help you chart your financial course so you can maximize funding opportunities and navigate the financial planning that comes with newly adopted technology. Find out how – contact us today.