By Hank Russell
The New York State Comptroller’s office released audits on two local school districts. One audit found one district did not properly handle its fund balance properly and another audit found that there were no controls in place for payroll.
The comptroller’s office found that board and district officials from the Remsenberg-Speonk Union Free School District did not properly manage the district’s fund balance. The board adopted budgets that annually overestimated appropriations by an average of $1.3 million (9%) per year, or a cumulative total of approximately $6.4 million.
The majority of the overestimated appropriations ($5.6 million) were for special education instruction. From fiscal years 2019-20 through 2022-23, the district’s reported surplus fund balance ranged from 10 to 15% of the upcoming year’s budget, which was $962,000 to $1.8 million over the 4% statutory limit, according to the audit.
In response, School Superintendent Denise Lindsay-Sullivan wrote in a letter to Ira McCracken, the comptroller’s office’s chief of municipal audits, ” We are fully committed to providing a high-quality, appropriate education to all students. To do so effectively, we must also ensure that we are financially prepared to meet their diverse needs. The cost of educating high-needs students is comparable across districts, but for a small district like ours, these expenses represent a significantly larger portion of our overall budget. This reality often necessitates more conservative, sometimes overestimated, budgeting for special education instruction to ensure we can meet our obligations and student needs, without disruption.”
While district officials appropriated a total of $5.5 million of surplus fund balance over the last five years, officials only used $350,000 of this amount after experiencing operating surpluses in four of the last five years. When the unused appropriated fund balance is added back to the district’s reported surplus fund balance, the recalculated amount ranged from approximately 12% to 23% of the upcoming year’s budget, which exceeds the statutory limit by 8 to 19 percentage points.
At the end of the 2023-24 fiscal year, the recalculated surplus fund balance was $1.9 million, which exceeded the statutory limit by nearly $1.3 million. Despite having excess surplus fund balance available, the board increased taxes by an average of about $318,000 (2%) each year from 2019-20 to 2023-24.
The audit recommended that the board and district officials should adopt budgets that include reasonable estimates for appropriations and the amount of fund balance that will be appropriated and used to fund operations and develop and adopt a plan to ensure that surplus fund balance remains within the statutory limit. Surplus funds may be used for reducing District property taxes, funding one-time expenditures, funding reserves, and paying off debt.
Lindsay-Sullivan said, although “their lens may differ from ours,” the district will work on meeting these recommendations.
“In the coming years, we will continue to enhance our budget development process by incorporating the most accurate historical data, we will analyze budget trends over multiple years, and regularly consult with receiving providers, in-district leadership, and engage in enrollment projection studies and annual census data collection, to ensure estimates align closely with actual district needs,” she said. “Additionally, we will work with our financial advisors and audit committee in order to review fund balance projections. This measure will ensure that they are appropriately allocated to support sustainable budgeting practices.”
In another audit, officials from the Center Moriches Union Free School District did not make accurate, approved and supported payroll payments to employees for tutoring, covering classes, chaperoning and sports scorekeeping.
Time sheets for 13 employees were not adequately supported to ensure payments totaling $100,103 were accurately paid. Auditors questioned the reasonableness of $14,190 in payments for 258 chaperoning and sports scorekeeping events due to various discrepancies with game schedules. For example, time sheets were submitted with overlapping game times and for dates when there were no games scheduled.
Officials did not develop and adopt a written payroll policy or procedures to convey expectations and processes to be followed for ensuring payroll payments to employees for miscellaneous activities were accurate, approved and supported.
The auditor’s key recommendations include establishing and adopting comprehensive written payroll processing policies and procedures for miscellaneous activities and providing supervisors with training to ensure time sheets are only approved if they are adequately supported.
Dr. Ricardo Soto, the school superintendent, wrote in a letter to McCracken, “The payroll staff in the business office will only process time sheets when the time sheet is fully completed with supporting documentation. The Assistant Superintendent for Business shall provide supervision, training, and direction to ensure that the payroll time sheet[s] are paid only when the time sheet is fully completed including all supporting documentation.”
Long Island Life & Politics reached out to Lindsay-Sullivan and Soto for additional information, but did not hear back as of press time.