ALBANY -- The Valhalla Union Free School District did not provide sufficient oversight over the district’s financial operations, which led to the district spending $456,400 contrary to grant requirements and $38,500 more than necessary in life insurance premiums, according to an audit released Friday by State Comptroller Thomas DiNapoli.

The audit, covering July 2005 to June 2007, found the board did not establish adequate internal controls over several areas to fulfill its oversight responsibility. Areas lacking proper policies and procedures included maintaining grant records and monitoring grant activity, fringe benefits, payroll, leave time records, the treasurer’s office and security over financial information.

The district received an educational grant from the Town of Greenburgh to alleviate some of the perceived financial burden on the district of having the Westchester Housing Enterprise for the Less Privileged located in the district. The grant agreement requires that grant funds be used to provide educational benefits that would not otherwise be available to the district.

Auditors discovered the district failed to maintain timely, accurate and complete accounting records and failed to report financial activity to allow for proper and timely monitoring of grant activities. Of approximately $1.7 million in grant spending, $191,400 was not spent in accordance with the grant requirements. An additional $205,000 in spending did not follow competitive bidding requirements.