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Claims Audit How Should a Board Ensure Claims Are Properly Audited? Generally, a board must audit all claims against a school district before they are paid2 or appoint a claims auditor to assume the board’s powers and duties to audit and approve claims. If the board appoints a claims auditor, the individual must have the skills to effectively audit claims, including experience with purchasing, competitive bidding and processing claims. In addition, New York State Education Law Section 1709 (20-a) prohibits individuals in certain school district positions including board members, board clerk, board treasurer and individuals that directly report to the superintendent from serving as the claims auditor. The basis for this prohibition is the need to properly segregate the audit and authorization function from the approval and payment functions. A board and school district officials should establish a written policy and written procedures which detail the claims auditor’s duties and specifically explains the responsibilities for reviewing claims. A claims auditor’s responsibilities include determining whether claims are for a valid and legal purpose, properly authorized and approved, mathematically correct, sufficiently itemized, and to determine if procurement requirements are followed. A claims auditor is also responsible for verifying that the school district received the goods or services described, the claim had not been paid before and to ensure sufficient documentation is attached including detailed receipts, invoices and receiving documentation. In addition, the claims auditor should document the approval of claims, which is generally provided through the preparation of a warrant of audited claims. If deficiencies are found, the claim should be held until actions are taken to correct the deficiency. The Board Did Not Comply with Policy Requirements or Provide Adequate Guidance to the Claims Auditor The Board adopted a written claims auditing policy to serve as guidance to Board members on appointing a claims auditor and to the claims auditor in performing her duties. The policy listed the prohibited positions that could be appointed claims auditor. However, the Board did not comply with its policy, and Education Law Section 1709 (20-a), when appointing a claims auditor. For 12 of the 14 months in our audit period, the appointed claims auditor was the secretary to the Superintendent, who is under the direct supervision of the Superintendent.3 As claims auditor, she would be required to audit and approve claims her supervisor, the Superintendent, had initiated and approved. Prior to the start of our audit, 2 A board, by resolution, may authorize payment in advance of audit for public utility services (electric, gas, water, sewer and telephone), postage and freight and express charges. The claims for such prepayments should be audited as soon as possible after payment and included on the next warrant (list of claims scheduled for payment) as prepaid amounts. 3 This individual was the claims auditor from July 2019 through June 2021. 2 Of f ic e of t he New York State Comptroller