Purpose of Audit

The purpose of our audit was to examine the District’s financial condition for the period July 1, 2011, through January 3, 2013.

Background

The Maine-Endwell Central School District is located in the Towns of Maine, Nanticoke, Union, Newark Valley, and Owego, in Broome and Tioga Counties. The District is governed by the Board of Education which comprises seven elected members. The District’s general fund budgeted expenditures for the 2012-13 fiscal year were approximately $46.5 million.

Key Findings

• Over the past three years, District officials have tried to maintain the same level of programs and services while keeping the tax levy as low as possible. However, they were able to do so only by continually appropriating fund balance, resulting in the drastic depletion of the year-end unexpended surplus fund balance from $1.7 million in 2009-10 to just over $64,000 (or 0.2 percent of District expenditures) in 2011-12.
• Over the same three-year period, the District received $2.4 million less in revenues than budgeted. Most of this shortfall was from State aid and interest earnings.

• The effects of the revenue over-estimates were offset by the over-estimated expenditures that amounted to about $9 million over the three-year period. The vast majority of this over-estimation, $7.4 million, was in salaries and benefits, which should be budgeted on established salary schedules and therefore should not have significant variances.

Key Recommendations

• Reduce reliance on fund balance as a financing source and evaluate recurring revenue sources over which they have direct control to fund appropriations.
• Develop budgets that are based on sound estimates of revenues and appropriations, using all available data.