June 11, 2008
DiNapoli: Mismanagement at Campbell-Savona CSD Led to $3.2 Million Deficit
District Makes Changes as Result of Audit
Campbell-Savona Central School District accumulated a general fund deficit of $3.2 million, because it ineffectively monitored district finances and adopted unrealistic budgets, according to an audit released today by State Comptroller Thomas P. DiNapoli.
“School districts must develop realistic budgets and plan for how they will meet operational and capital needs down the road,” DiNapoli said. “Now that Campbell-Savona is in deficit financing, the district and the board have to closely monitor revenues and expenses to make sure they don’t end up with another multi-million dollar deficit. It’s encouraging to see the district begin to implement our recommendations. The taxpayers ultimately pay the price for poor planning and they deserve better fiscal management.”
The district’s $3.2 million deficit represented 35 percent of the district’s 2005-06 adopted budget. The district obtained deficit financing approval from the State Legislature in 2006 and issued $3.25 million in deficit financing bonds.
The audit found the deficit financing and some changes in operation allowed the district to finish FY 2006-07 with an unreserved fund balance of $1.5 million; however, auditors determined the board does not have procedures to plan for long-term operational and capital needs, which could contribute to more financial problems in the future.
DiNapoli’s audit, covering July 2004 through June 2006, identified a number of weaknesses that led to the district’s deficit including overestimated revenues, underestimated expenditures and appropriating non-existent fund balances for six years.
The district’s independent auditors documented the district’s severe control problems in several audits, but the board failed to take or require corrective action and did not provide proper guidance to district officials.
Auditors also learned the district did not have proper controls over claims processing, fringe benefits and information technology. Specifically, the lack of controls led the district to pay:
Auditors learned the district’s payroll clerk questioned the legitimacy of the unauthorized payments and brought them to the attention of the former superintendent, a board member and the independent auditor but the payments continued.
The audit recommends that school officials:
The district generally agreed with the audit’s findings and has begun implementing corrective action.
Click here to view the audit.
School District Accountability: