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February 6, 2009

 

DiNapoli: Greenburgh CSD #7 Could Have Used Over a Million Dollars in Excessive Surplus to Reduce Taxes

Surplus Exceeded Amount Allowed by Law

Greenburgh Central School District #7 could have used $1.2 million of its budget surplus to reduce taxes or pay off debt in the 2007-08 school year, according to an audit released by State Comptroller Thomas P. DiNapoli. The surplus, otherwise known as the unreserved, unappropriated fund balance, reached $2.8 million by June 2007, which was in excess of the amount allowed by Real Property Tax Law by about $1.2 million. The total surplus for that year reached $2.8 million. The audit covered the period July 2007 to July 2008.

“Officials need to watch every taxpayer dime,” DiNapoli said. “That means reducing excessive surpluses and giving the money back to taxpayers or reducing debt whenever possible. Now more than ever, school districts must make the best use of tax dollars and adhere to the law prohibiting excessive surpluses.”

DiNapoli’s audit also found that the district:

  • inappropriately placed surplus moneys of nearly $2 million from the 2006-07 fiscal year in a tax certiorari reserve fund established in October 2007 for the purpose of paying for the settlement of tax certiorari cases of the preceding year’s tax roll;
  • procured approximately $250,000 in professional services from seven vendors without using requests for proposals (RFPs) or soliciting competitive quotes;
  • did not adequately segregate duties in the payroll function and the treasurer’s office, or provide proper supervision, creating an atmosphere where moneys could be lost or stolen;
    overpaid 68 teaching assistants approximately $35,000;
  • did not ensure that procedures for obtaining background checks were performed for employees of outside contractors who have direct contact with students, in violation of state education law; and
  • did not develop adequate security measures to protect computerized data and hardware, making equipment and computer files – which contain personal and confidential data –vulnerable to damage, alteration or theft.

DiNapoli recommended that district officials:

  • more closely monitor the unreserved, unappropriated fund balance to ensure that it is within the limit required by law, as it should be used to reduce taxes or properly retained or reserved under provisions of law;
  • ensure that, when placing moneys in tax certiorari reserves, officials consider the amount which might reasonably be needed to meet expenses for judgments or claims arising from the tax roll in the year the moneys are deposited. They should also ensure that reserve funds are established in a timely manner;
  • develop written policies and procedures and individual job descriptions for the treasurer and payroll functions;
  • either segregate the incompatible duties in the treasurer’s office and payroll processing, or implement compensating controls;
  • take the necessary steps to recover the overpayments made to teaching assistants;
  • develop a procedure to ensure that steps are taken to obtain required background checks that are conducted on employees of outside contractors; and
  • ensure that all computer servers are adequately secured. These controls should include the use of a locked door to which only authorized personnel have keys.

District officials generally agreed with DiNapoli’s recommendations and indicated they planned to initiate, or have already taken, corrective action. Click here to view the audit.

School District Accountability
In order to improve accountability of the state’s schools, DiNapoli’s office will audit all of New York’s 834 school districts, Board of Cooperative Educational Services and charter schools by 2010. The State Comptroller’s office has completed 550 school audits and approximately 180 school audits are currently underway.

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