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Showing posts with label Comptroller's Office. Show all posts
Showing posts with label Comptroller's Office. Show all posts

Schoharie Central School District Overestimated Expenditures, Gaining $2.2 Million in Unexpected Surplus Since 2008

Written By Editor on 12/26/13 | 12/26/13


In an audit recently concluded by the Office of the New York State Comptroller's Division of Local Government and School Accountability, it was revealed that members of the Schoharie Central School Board had "adopted budgets with revenues that were realistic and supported, expenditures were consistently and significantly overestimated," while spending only $676,000 from the school's fund balance when projections had been much higher.

The result of which was nearly $8 million less was spent than was budgeted between the 2008-09 through 2012-13 school years, leaving the Schoharie Central School District with an overall surplus of $2.2 million even after appropriating "on average approximately $1.1 million of unexpected surplus funds each year - totaling more than $5.4 million over five years - to help finance the ensuing year's operations."
 
Although the Comptroller's Office found that District officials legally maintained the unexpended surplus fund balance in compliance with the statutory limit, they condemned the process of over-estimating expenditures and not appropriating fund balance as not transparent to taxpayers, who had their bills unnecessarily increased over the past half-decade to cover expenditures that would not be realized.

Recommendations included the following:

1. The Board and District officials should develop and adopt budgets that include realistic estimates for expenditures based on contractual and historical data.
2. The Board should discontinue the practice of adopting budgets with the appropriation of unexpended surplus funds that will not be used.
3. District officials should develop a plan to use surplus fund balance in a manner that benefits District taxpayers and provides appropriate transparency of the budget process with public disclosure. Appropriate uses of surplus funds could include, but are not limited to: • Funding necessary reserves,   • Paying off debt,   • Funding one-time expenditures, and  • Reducing District property taxes.
 
Superintendent Richard Sherman responded to the Comptroller's Office audit by stating school officials would "endeavor to systematically reduce the overall amount of retained fund balance in order to further ease the burden of taxes on our citizens, as long as we are able to realize our fair share of state aid, and as long as the tax certiorari case is decided favorably."
 
It remains to seen what effect the Comptroller's Office audit will have of the Schoharie Central School District's budgetary practices, which according to the audit include overestimated expenditures in the current budget year that will likely add to the school's ballooning surplus, but the dynamic has changed now that transparency has been introduced into the previously unknown situation.

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