THE CITY OF NEW YORK OFFICE OF THE COMPTROLLER
BUREAU OF MANAGEMENT AUDIT
AUDIT OF THE TRAVEL EXPENSES OF THE DEPARTMENT OF EDUCATION’S CENTRAL OFFICE
MD08-078A
June 30, 2008
AUDIT REPORT IN BRIEF
Download the Complete Audit Report (pdf 406 kb)
The audit determined the adequacy of the Department of Education’s (DOE’s) internal controls over the travel expenses of its Central Office and whether these travel expenses were necessary, reasonable, and for authorized individuals.
DOE provides primary and secondary education to more than one million pre-kindergarten through grade 12 students in approximately 1,400 schools. The DOE Central Office includes the Schools Chancellor and the major education and management officials of the school system. The Central Office also supports the regional offices (which are now known as the integrated service centers) and schools by providing accounting and payroll services, as well as staff recruitment and training.
DOE spent a total of $16.3 million for travel expenditures during Fiscal Year 2007. Of this amount, approximately $4.8 million was spent by the Central Office. Central Office travel expenses are primarily for teacher training, meetings, conferences, retreats, and transportation. For the processing of Central Office travel payments, the Central Administrative Offices (within the Central Office) send most travel voucher packages to the Central Business Office (CBO), which is one of 17 payment-processing offices that service the Central Office. During Fiscal Year 2007, the CBO processed 50 percent (approximately $2.4 million) of the total value of Central Office travel voucher payments.
Audit Findings and Conclusions
DOE has inadequate internal controls over the travel expenses of its Central Office. The Central Office did not always adhere to DOE’s own written procedures for the purchase and approval of travel expenses or to applicable sections of Comptroller’s Directives #6 and #24. While we found that, in general, the sampled expenditures were adequately supported by invoices, their lack of underlying supporting documentation prevented us from determining whether all purchases were reasonable. In light of DOE’s budget cuts for Fiscal Year 2008, DOE should ensure that adequate controls are in place to make certain that all expenditures are necessary, reasonable, and obtained at the best possible price.
The lack of internal DOE controls and oversight may have contributed to the failure of the Central Office to adhere to DOE’s written procedures and City regulations, resulting in the inconsistencies we identified in the Central Office’s purchasing procedures and processing of payment vouchers.
Audit Recommendations
Based on our findings, we make 14 recommendations, 6 of which are listed below. DOE should:
- Authorize an appropriate unit to conduct an independent review of the Central Administrative Offices’ transactions to ensure compliance with DOE written procedures and Comptroller’s Directives.
- Ensure that the Central Administrative Offices adhere to the bidding requirements of the Standard Operating Procedures Manual (SOPM) to ensure that needed goods and services are obtained at the best available price.
- Ensure that bids are solicited for conference facilities and associated services prior to using one of the contracted facility vendors. A contracted facility vendor should be used only if it is deemed to be the lowest responsible bidder.
- Ensure that its offices adhere to Comptroller’s Directive #6 and provide proper written justification for an event with overnight accommodations.
- Ensure that purchasing documents are recorded prior to making its purchases to ensure that funds are available and that the estimated liabilities are recorded in the correct fiscal period.
- Ensure that its travel expenditures adhere to the established written procedures of Comptroller’s Directive #6 and the SOPM, including allowable food expenditures and approved OP-221 and OD-7 forms.
DOE Response
In their response, DOE officials generally agreed with the audit’s recommendations.
