State audit finds check signing oversights in Valley Stream District 13

Check signing is a basic feature of financial transactions that goes back centuries. But when done wrong, it can invite a host of legal ramifications and leave people vulnerable to fraud and financial theft.

Earlier this month, state Comptroller Thomas DiNapoli released an audit report underscoring the reality of those consequences after finding that Valley Stream District 13 legally mishandled the signing of hundreds of district checks.

The audit, performed by the comptroller, identified dozens of non-payroll checks amounting to millions of dollars that were signed off by the district’s board treasurer, Brian Cleary, using an unauthorized electronic signature.

In particular, auditors discovered that Cleary, the man responsible for signing all of the district’s checks and keeping stewardship over its funds, electronically signed his name on checks without legal approval from the Board of Education. In addition, over 600 additional checks, signed remotely and totaling $4.8 million, were flagged for being mismanaged.

While the checks issued between July 2021 and June 2023 ostensibly served “legitimate district purposes,” the comptroller’s findings concluded that the treasurer had shirked his duty in maintaining proper supervision over the use of his electronic signature. An oversight which, the report warned, opens the door for bad actors to defraud and take advantage. 

“When the Treasurer does not maintain control of his electronic signature,” the comptroller wrote, “the chances of unauthorized checks being signed increases.” 

That wasn’t the only glaring lapse of bureaucratic judgment auditors found. A former Board of Education member, whose name was undisclosed, was not removed from the list of eligible check signers, and the signatures of newly appointed board members were not updated in the district’s bank accounts. Again, the comptroller reiterated these errors leave the district financially exposed.

The report’s answer to the district’s oversight failures boiled down to simple improvements:

• Authorize the use of an electronic signature.
• Maintain custody of the Treasurer’s electronic signature and supervise its use.
• Ensure the District’s bank always has the current appointed check signers on record.

Neither Superintendent Judith LaRocca nor Board of Education President Jennifer Oliveri could be reached directly to answer the Herald’s questions and was instead referred to the district’s response letter to the comptroller’s report. In it, district officials largely agreed with the comptroller’s findings and tackled his issues point-by-point by updating or promising to update its financial protocols.

“The District passed a resolution at the Board meeting held on December 19, 2023, authorizing the District Treasurer and any other necessary District officers to electronically sign checks on behalf of the District, such as by a machine or check signer device,” wrote Gerard Antoine, Assistant Superintendent for Business and Human Resources. “It has also been recommended to the District Policy Committee to develop a policy to govern the use of electronic signatures.”