Comptroller DiNapoli Releases School Audits
New York State Comptroller Thomas P. DiNapoli today announced his office completed audits of the Allegany Limestone Central School District, the Charlotte Valley Central School District, the Newfield Central School District, the Cassadaga Valley Central School District, the Andes Central School District, the Wainscott Common School District and the Canton Central School District.
“My office’s audits of school districts, charter schools and BOCES help schools improve their financial management practices,” DiNapoli said. “These audits are tools for schools to make sure proper policies and procedures are in place to protect taxpayer dollars and provide students with the best possible education.”
Allegany-Limestone Central School District – Reserve Funds and Fixed Assets (Cattaraugus County)
Over the past five fiscal years, district officials added $1 million to reserves and increased the real property tax levy by 26 percent. Additionally, the board failed to adopt a formalized plan for reserve funds that included the intent, funding levels and use of such funds. As of June 30, 2013, the district had more than $2 million in a debt service reserve that district officials could not associate with any outstanding debt. Also, four of the district’s six general fund reserves totaling approximately $1.7 million were not supported by a plan or other documentation validating the amount retained. The district engaged a third-party asset tracking company to account for the district’s fixed assets, without any formal control procedures in place for this process.
Charlotte Valley Central School District – Financial Condition (Delaware, Otsego, and Schoharie counties)
The superintendent and the board did not develop reasonable budget estimates. For fiscal years 2007-08 through 2011-12, the board adopted budgets that over-estimated expenditures by almost $2 million. The district’s revenue estimates were underestimated by nearly $723,000 for the same time period. The board’s adopted budgets also included appropriating fund balance totaling more than $2 million during the 2007-08 to 2011-12 fiscal years. However, only $420,000 of this fund balance was actually needed due to the operating surpluses in 2008-09 and 2009-10. The unexpended surplus fund balance was more than the 4 percent statutory limit in four of the last five years. However, for the 2010-11 year, the fund balance was under the threshold at 3.95 percent. To reduce the unexpended surplus fund balance and bring it closer to the 4 percent limit, district officials made unplanned transfers to reserves.
Newfield Central School District – Financial Condition (Tompkins County)
District officials did not ensure reasonable levels of fund balance were maintained. While their budgets included the use of surplus and reserved fund balances to finance operations, the positive variances between the budgets and actual results never necessitated the full use of the surplus funds. Instead, the amount of surplus increased the district’s total fund balance by $521,000 over a five-year period. Some of these surplus funds were transferred to various reserves resulting in three reserves having more money than is likely necessary. Additionally, the district reported liabilities that were more than $1.3 million over the actual obligations for the same period. The adjustment of the overfunded reserves and correction of the understated liabilities would increase the available fund balance by more than $1.8 million. This would cause the fund balance to be well over the amount allowed by law.
Cassadaga Valley Central School District – Financial Condition (Chautauqua County)
District officials consistently over-estimated expenditures in the general fund by a total of $6.3 million over the five-year period ending June 30, 2013. Therefore, the district did not need to use the $5.8 million of fund balance that the board appropriated as a funding source in the general fund budgets for the same five-year period. Instead, the district has experienced operating surpluses in the general fund for four of the last five years, leading to unexpended surplus fund balance exceeding the statutory limit of 4 percent of the ensuing year’s operations for the last two fiscal years. Also, district officials could not demonstrate a planned need for more than $876,000 in reserves.
Andes Central School District – Financial Management (Delaware County)
District officials are not properly managing the District’s fund balance levels. They have appropriated funds they have not used in four of the last five fiscal years (2008-09 through 2012-13), because the District consistently spent less than what was budgeted. Although District officials used $205,000 of appropriated fund balance in 2011-12, their unreserved fund balance increased to almost 20 percent of the following year’s budgeted appropriations. While the 2012-13 unreserved fund balance dropped slightly, they are still well above amounts allowed by law. In addition, two reserves have excess balances totaling $450,000, based on their intended use. Also, during this time, real property taxes have increased from $2.5 million in 2009 to $2.7 million in 2013, and the District has issued $1.5 million in additional debt.
Wainscott Common School District – Financial Condition (Suffolk County)
The board needs to improve its oversight and management of the district’s budget. Over the last five years, district officials consistently under-estimated revenues and over-estimated expenditures in the board-adopted budgets by a total of more than $1.7 million. The board appropriated unexpended surplus funds each year, for a five-year total exceeding $3.1 million, to help finance the ensuing year’s operations. However, the district actually used less than $1.9 million of the appropriated fund balance during this period and accumulated an unexpended surplus fund balance 16 times the amount allowed by statute. For the same time period, the district also increased the real property tax levy by more than $325,000. In addition, the district has not developed a multiyear financial plan that addresses the district’s long-term operational needs or the use of unexpended surplus fund balance in a manner that benefits district taxpayers.
Canton Central School District – Financial Condition (St. Lawrence County)
For the fiscal years 2009-10 through 2011-12 the district officials adopted realistic budgets and kept expenditures within budgeted appropriations. The board reviewed budget-to-actual comparison reports throughout the year to monitor the budget and approved budget transfers at the monthly board meetings. However, the heavy reliance on appropriated fund balance as a financing source in the annual budgets has resulted in a significant reduction in the district’s unexpended surplus funds. From 2009-10 to 2011-12, the total fund balance in the general fund has been depleted by 44 percent and the unexpended surplus fund balance has been depleted from $1.9 million to $730,000 in 2011-12.