School District Reviews Risk Assessment
By Stephanie Mariel Petrellese

The Garden City School District is actively working to mitigate both internal and external risks, but some improvements are still needed, according to an Initial Risk Assessment presented to the Garden City Board of Education at their Jan. 14th work session.

School districts are required by New York State law and New York State Comptroller Alan G. Hevesi's 5-Point Plan to have a risk assessment. The document identifies and analyzes internal and external risks and any potential obstacle to achieving district goals.

John Cosgrove and John Collins, two representatives from the Bennett Kielson Storch DeSantis Division of the accountant and consultant firm O'Connor Davies Munns & Dobbins, LLP, analyzed 24 business policies, procedures, practices and activities during the summer and early fall. They highlighted areas where improvement is needed and assigned risk levels as low, moderate and high.

Two areas, information technology system controls and benefits, were given a high risk rating; six areas were rated moderate; and 16 areas reviewed by the consultant were assigned a low risk level.

The district's information technology system was assigned a high risk rating since there is no formal contingency plan for alternative processing in the event of system loss or interruption. Also, backup files are not tested on a periodic basis.

The consultant recommended that the district prepare a formal disaster recovery/business continuity plan. "The primary objective of disaster recovery planning is to protect the District in the event that all or part of its computer services are rendered unusable," the assessment reads. "Preparedness is the key. The planning process should minimize the disruption of operations and ensure some level of organizational stability and an orderly recovery after a disaster."

Another area assigned a high risk rating is health and retiree benefits. They noted the "significant error" caught by Albert Chase, assistant superintendent for business and finance, during a review of union contracts during the budget development process last February.

In 1995, as a result of teacher collective bargaining negotiations, the district obtained a change in the percentage of health costs paid by that group. Under the terms of the contract, staff members retiring after November 1995 would be required to pay 10 percent of the individual cost of the premium and 25 percent of the family add-on.

Chase reported to Superintendent Dr. Robert Feirsen and the Board of Education that staff members opting for family coverage were not paying the 10 percent that applied to the individual portion. In total, 67 retirees were involved, including staff who retired at the end of the 2006 school year.

In November, the Board authorized counsel to proceed with litigation against 34 retirees who have either refused or neglected to repay the district. The district is attempting to collect a total of $119,600.

The consultant firm concluded that the errors were not discovered because the billing procedures were not formalized. The report also found that records were entered into the system manually and were prone to error and invoices were not checked to ascertain that prices, extensions and additions were calculated correctly. The firm recommends the district use a more computerized system for billing retirees and accounting for the collections.

Chase said out of the eight items that received a high or moderate risk rating, four of them have already been addressed. The district is required to address two areas by June 30th. School Board President Kenneth Monaghan said the Board will make a decision by the end of January.

The risk assessment will be available on the district's Web site, www.gardencity.k12.ny.us.