2023 New York Laws › EDN - Education › Title 2 - School District Organization › Article 43 - School District Officers--Town and County Officials › Part 1 - General Provisions › 2116-B - Internal Audit Function.

§  2116-b.  Internal  audit function. 1. No later than July first, two
  thousand six, each school district shall  establish  an  internal  audit
  function  to  be  in  operation  no  later  than  the following December
  thirty-first. Such function shall include: (a)  development  of  a  risk
  assessment  of  district  operations,  including  but  not limited to, a
  review  of  financial  policies  and  procedures  and  the  testing  and
  evaluation  of  district  internal  controls;  (b)  an annual review and
  update of such risk assessment; and (c) preparation of reports, at least
  annually or more frequently as the trustees or board  of  education  may
  direct,  which  analyze  significant risk assessment findings, recommend
  changes for strengthening controls and reducing  identified  risks,  and
  specify timeframes for implementation of such recommendations.
2. School districts of less than eight teachers, school districts with
  actual general fund expenditures totaling less than five million dollars
  in  the previous school year, or school districts with actual enrollment
  of less than one thousand five hundred students in the  previous  school
  year shall be exempt from this requirement. Any school district claiming
  such  exemption  shall  annually  certify  to the commissioner that such
  school district meets the requirements set forth in this subdivision.
3.  The  commissioner,  in  consultation  with  the  comptroller,   is
  authorized  to promulgate regulations with respect to the internal audit
  function as is necessary for  the  proper  performance  of  its  duties,
  including standards, qualifications and training for audit personnel. In
  developing   such  regulations,  the  commissioner  shall  consider  the
  differing needs, capabilities and environments of  school  districts  of
  varying sizes across the state.
4.  A  district  shall  be  permitted  to  utilize  existing  district
  personnel to fulfill this function, but such persons shall not have  any
  responsibility  for  other  business  operations  of  the district while
  performing such function.
5.  A  district  shall  be  permitted  to  use   (a)   inter-municipal
  cooperative  agreements, (b) shared services to the extent authorized by
  section nineteen  hundred  fifty  of  this  title,  or  (c)  independent
  contractors,  to  fulfill this function as long as personnel or entities
  performing the internal  audit  function  comply  with  any  regulations
  issued  by the commissioner and meet professional auditing standards for
  independence between the auditor and the district.
6. Personnel or entities performing the internal audit function  shall
  report  directly to the trustees or board of education of each district.
  The  district  audit  committee  established  under  section  twenty-one
  hundred  sixteen-c  of this article shall assist in the oversight of the
  internal audit function on behalf of the trustees or board.
7. Nothing in this section shall be construed as  requiring  a  school
  district  in  any  city  with  a  population  of one hundred twenty-five
  thousand or more  to  replace  or  modify  an  existing  internal  audit
  function  where such function already exists by special or local law, so
  long as the superintendent of the district  annually  certifies  to  the
  commissioner  that the existing internal audit function meets or exceeds
  the requirements of this section.