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December 28, 2009



DiNapoli Audit: Fairport School District Increased
Tax Levy By 17 Percent While Accumulating
Surpluses Over Five Years

Fairport Central School District accumulated $16.6 million in excess funds over five years while increasing the tax levy by 17 percent, according to an audit released today by State Comptroller Thomas P. DiNapoli. The excess funds could have been used to benefit taxpayers by reducing the property tax levy or paying one-time expenses.

“All across New York, families are watching every dime and school districts need to do the same,” DiNapoli said. “Fairport Central School District needs to use more realistic budget numbers. Taxpayers should not have to pay more property taxes than necessary.”

The audit, covering July 2003 through May 2009, found the district consistently overestimated expenditures and underestimated revenues, resulting in significant operating surpluses from 2003-04 through 2007-08 which totaled $26.2 million. During the same period, the district’s total fund balance in the general fund doubled from approximately $18.7 million in June 2004 to more than $37.8 million as of June 2008.

Even while incurring these significant operating surpluses, auditors found the district increased the tax levy by 17 percent, from $51.9 million in 2003-04 to $60.9 million in 2007-08. In addition, the district’s 2008-09 budget continued to support a substantial operating surplus of $7.4 million.

To avoid exceeding unreserved fund balance limits established by law, DiNapoli’s audit found the district placed nearly $11.4 million in excess funds in reserves accounts and did not use the amounts appropriated, as much as $1.5 million. This money could have reduced tax levies.

The district’s $16.6 million in excess funds included:

  • $4.06 million in a capital bus reserve;
  • $3.8 million in overstated accrued liability;
  • $2.84 million in a liability reserve;
  • $1.64 million in a repair reserve;
  • $1.5 million in appropriated fund balance that was not used;
  • $1.4 million in an employee benefits accrued liability reserve;
  • $819,810 in an insurance reserve; and
  • $611,230 in an unemployment insurance reserve.

DiNapoli’s office recommends that district officials:

  • prepare budgets that realistically estimate revenues and expenditures;
  • use the surplus fund balance to benefit district taxpayers by reducing property taxes, paying off debt or financing one-time expenses; and
  • review all reserve funds and determine if the amount of money in each reserve is necessary and, if not, reduce the reserves to reasonable levels.

The district did not agree with many of the audit’s findings. The district’s full response is included in the audit.

Click here for a copy of the Fairport CSD audit.

School District Accountability
In order to improve accountability of the state’s schools, DiNapoli’s office will audit all of New York’s school districts and Boards of Cooperative Educational Services by 2010. The State Comptroller’s office has completed 720 school audits and approximately 10 school audits are currently underway.

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