Port Washington school auditors recommend annual resolution to authorize year-end budget transfers; board discusses ACH payments and fraud controls

The Port Washington Union Free School District board heard from internal auditors on April 9 that adopting an annual resolution would let staff complete necessary prior-year budget transfers and closing entries so the district can close its books on June 30.

The internal auditor said the district’s external auditors, R. S. Abrams, "suggested that similar to many other schools that the board passed a resolution allowing us to actually make those transfers so we can close out our books." The auditor told trustees the resolution was drafted with the district attorney and could be adopted annually and placed on the reorganization agenda in July for the new fiscal year.

The recommendation matters because the district’s fiscal year ends on June 30 but auditors typically arrive in late August and district staff often continue closing prior-year journal entries into July and August. The resolution would let staff process transfers dated June 30 and then present them to the board for retroactive approval at the next meeting, the auditor said.

Trustees asked whether the draft resolution is specific enough about what transfers staff may make. One board member said the language "seems very generic" and asked if it clearly limits the transfers to routine reconciliation and line-item adjustments. The internal auditor responded that the district will continue to approve line-item transfers on the board agenda and that the resolution is intended only to allow reconciliation and closing entries needed to complete the prior year’s financials.

Staff also reported progress on adopting automated clearing house (ACH) payments for certain vendors. The auditor said Donna has been working with the district’s bank and recommended starting ACH for larger, recurring payments such as utilities, construction draws and insurance premiums (the transcript referenced NYSHIP). The auditor cautioned that fraud risk requires robust internal controls before expanding ACH use: "there's a lot of phishing, a lot of nefarious actors... they'll pretend to be your vendor and say, hey. Here's our bank information." The auditor said technology staff already have controls and that any vendor request to change banking would require a form and verification by phone.

The committee agreed to recommend the resolution to the full board for the 2024–25 year and to place it on the July reorganization agenda for the 2025–26 process. A trustee asked staff to ensure the final resolution language clarifies the scope of permitted transfers so the board can review what kinds of transfers will be processed prior to formal approval.

The board then voted to recess into executive session to review the draft internal audit. The motion to recess was made by an unnamed board member, seconded by Emily Vays, and carried on a 7–0 voice vote.

No formal vote on the resolution or on expanding ACH authority was taken during the public session; both items were discussed for referral to future board action.