Professional Documents
Culture Documents
of the
N e w Y o r k S t a t e C o m p t r o ll e r
D ivision of Local Government
& School Accountability
Thomas P. DiNapoli
Table of Contents
Page
AUTHORITY LETTER 1
INTRODUCTION 2
Background
2
Objective 2
Scope and Methodology
2
Comments of District Officials and Corrective Action
2
FINANCIAL MANAGEMENT
Budgeting and Fund Balance
Reserves
Recommendations
APPENDIX A Response From District Officials
APPENDIX B Audit Methodology and Standards
APPENDIX C How to Obtain Additional Copies of the Report
APPENDIX D Local Regional Office Listing
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Introduction
Background
Objective
Scope and
Methodology
Comments of
District Officials and
Corrective Action
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Financial Management
The Board is responsible for making sound financial decisions that
are in the best interests of the District, the students it serves and the
Districts residents. Sound budgeting practices based on accurate
estimates, along with prudent fund balance1 management, help ensure
that the real property tax levy is not greater than necessary. According
to New York State Real Property Tax Law (RPTL), the amount of fund
balance that the District can retain may not be more than 4 percent
of the ensuing fiscal years budget. Districts may use the remaining
resources to lower real property taxes or establish reserves to restrict
a reasonable portion of fund balance for a specific purpose.
District officials need to improve the budget process to ensure general
fund budget estimates and fund balance are reasonable. From 201011 through 2014-15, District officials planned operating deficits and
appropriated $11.7 million of fund balance each year. However,
because officials consistently overestimated expenditures, the
District experienced operating surpluses totaling more than $4 million
over these years and, therefore, used only $115,765 (1 percent) of
the appropriated fund balance to finance operations. District officials
also set aside $3 million in four reserves that have not been used.
Unrestricted fund balance for these five years ranged between 13
and 15 percent of the ensuing years appropriations, exceeding the
statutory limit. As a result, District officials missed the opportunity to
reduce the tax levy.
Budgeting and Fund
Balance
2011-12
Appropriations
$44,383,754
$45,615,708
$46,956,574
$48,407,621
$49,809,447
$235,173,104
Actual Expenditures
$41,964,440
$43,259,373
$45,459,890
$46,342,134
$47,070,172
$224,096,009
$2,419,314
$2,356,335
$1,496,684
$2,065,487
$2,739,275
$11,077,095
5%
5%
3%
4%
6%
5%
Overestimated Expenditures
Percentage
2012-13
2013-14
2014-15
Five-Year Total
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3
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2011-12
2012-13
2013-14
2014-15
$4,068,500
$6,439,128
$7,573,227
$7,457,462
$7,829,473
$2,370,630
$1,134,097
($115,765)
$372,011
$281,822
$6,439,130
$7,573,225
$7,457,462
$7,829,473
$8,111,295
$1,860,530
$2,808,054
$2,612,062
$2,890,155
$2,952,839
$272,503
$460,187
$425,127
$481,740
$652,363
$2,500,000
$2,450,000
$2,480,000
$2,470,000
$2,465,000
$1,806,097
$1,854,984
$1,940,273
$1,987,578
$2,041,093
$45,615,708
$46,956,574
$48,407,621
$49,539,447
$50,797,627
4%
4%
4%
4%
4%
There was a $2 prior period adjustment to decrease the 2011-12 beginning fund balance and $2 prior period adjustment to increase the 2012-13
beginning fund balance.
2011-12
2012-13
2013-14
$1,806,097
$1,854,984
$1,940,273
$1,987,578
$2,041,093
$2,500,000
$2,334,235
$2,480,000
$2,470,000
$2,465,000
$1,434,580
$2,308,054
$2,612,062
$2,890,155
$2,952,839
$5,740,677
$6,497,273
$7,032,335
$7,347,733
$7,458,932
13%
14%
15%
15%
15%
2014-15
Calculated average fund balance appropriated for fiscal years 2010-11 through
2015-16 was $2,473,000.
5
Sum of 2014-15 appropriated fund balance not used to fund ensuing years
budget and 2014-15 unused restricted fund balance.
4
The result of these budgeting practices made it appear that the District
needed to both raise taxes and use fund balance to close projected
budget gaps. The Board increased the tax levy from $27.4 million in
2010-11 to $31.3 million in 2015-16, an increase of about 14 percent.
Furthermore, the Boards practice of consistently appropriating fund
balance that was not needed to finance operations circumvented the
statutory limit imposed on unrestricted fund balance.
Reserves
2010-11
2011-12
2012-13
2013-14
2014-15
$0
$425,000
$515,000
$1,090,000
$1,250,000
$200,000
$526,320
$664,920
$332,640
$298,350
$31,590
$31,590
$31,590
$31,590
$42,120
$1,202,990
$1,325,144
$1,400,552
$1,435,925
$1,362,369
$1,434,580
$2,308,054
$2,612,062
$2,890,155
$2,952,839
Unemployment Reserve
Employee Benefit Accrued
Liability Reserve (EBALR)
Total Unused Reserves
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Recommendations
APPENDIX A
RESPONSE FROM DISTRICT OFFICIALS
The District officials response to this audit can be found on the following page.
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APPENDIX B
AUDIT METHODOLOGY AND STANDARDS
To achieve our audit objective and obtain valid evidence, we performed the following procedures:
We interviewed officials to gain an understanding of the Districts budgeting process.
We reviewed the results of operations and analyzed changes in fund balance for the general
fund for the period July 1, 2010 through June 30, 2015.
We compared the adopted budgets to the actual operating results to determine if the budget
assumptions were reasonable.
We reviewed the appropriation of Districts fund balance from July 1, 2010 through June 30,
2015.
We reviewed expenditures based on the Districts budget categories to identify significant
expenditures and analyze trends.
We tested the reliability of District accounting records, comparing them to the annual financial
report filed with the Office of the State Comptroller and the Districts independently audited
financial statements.
We reviewed meeting minutes and interviewed officials to determine whether the Districts
management is involved in financial matters by receiving and reviewing financial reports,
analyzing the need for and establishing reserves and otherwise monitoring the Districts
financial condition.
We reviewed the Districts reserve fund balances for reasonableness.
We reviewed the compensated absences liability for the 2014-15 fiscal year.
We conducted this performance audit in accordance with GAGAS. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis
for our findings and conclusions based on our audit objective. We believe that the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit objective.
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APPENDIX C
HOW TO OBTAIN ADDITIONAL COPIES OF THE REPORT
To obtain copies of this report, write or visit our web page:
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APPENDIX D
OFFICE OF THE STATE COMPTROLLER
DIVISION OF LOCAL GOVERNMENT
AND SCHOOL ACCOUNTABILITY
Andrew A. SanFilippo, Executive Deputy Comptroller
Gabriel F. Deyo, Deputy Comptroller
Tracey Hitchen Boyd, Assistant Comptroller
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