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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Quogue Union Free School District – Financial Condition and Cash Receipts (2013M-274)


Released: December 13, 2013 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the Districts controls over its budgeting practices and cash receipts process for the period July 1, 2011 through March 31, 2013.

Background

The Quogue Union Free School District is located in the Town of Southampton, in Suffolk County. The District is governed by the Board of Education which comprises five elected members. Actual expenditures for the 2011-12 fiscal year were $6,641,760 and $6,176,464 for the 2012-13 fiscal year.

Key Findings

  • District officials have consistently over-estimated expenditures and appropriated unexpended surplus funds that they did not use. The District’s unexpended surplus funds have exceeded the statutory 4 percent limit during the 2011-12 and 2012-13 fiscal years and tax levies may have been higher than necessary.
  • The District had four established reserves that totaled approximately $969,000 at June 30, 2013 and had no formal plan on funding or using these reserves. The District’s retirement reserves balance of $310,000 was five times what the District spent during the 2013 fiscal year.
  • The District has a well-designed set of control procedures that can provide reasonable assurance that thefts of cash receipts will be prevented or detected. We reviewed the District’s procedures for the collection of cash receipts for milk sales and non-resident tuition, totaling $169,576, and found no exceptions.

Key Recommendations

  • Develop and adopt budgets that include realistic estimates for expenditures based on contractual and historical data. Ensure that the unexpended surplus fund amounts are within statutory limits. Develop a plan to use the surplus fund balance identified in this report in a manner that benefits District taxpayers.
  • Develop a formal plan indicating how reserves will be funded, how much will be reserved and when reserves will be used.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236