DiNapoli: Increased Financial Oversight Could Have Prevented $1.8 Million Deficit at
Clinton School District
Inadequate oversight of financial operations created a $1.8 million deficit and forced the Clinton Central School District to deplete its unreserved fund balance, according to an audit released today by State Comptroller Thomas P. DiNapoli. The district underestimated its deficit by $1.1 million.
“School districts must stringently monitor their finances and have an accurate picture of their fiscal situation,” DiNapoli said. “Unreserved fund balances should be used only in emergency situations or, if there is an excess, to reduce tax levy. They should not be used to finance recurring expenses that school districts face every year.”
The district experienced six consecutive years of operating deficits that reduced the unreserved fund balance in the general fund from $906,226 in 2000 to a deficit of $696,975 in 2006. In addition, for FY 2005-06, the district failed to account for $440,402 in expenses and a long-term fund balance deficit of $682,024 for a construction project.
Auditors found the board was not provided with timely and accurate budget status reports and could not effectively monitor the school’s budget during the 2005-06 fiscal year. In addition, the district underestimated spending in several areas for FY 2005-06:
- $774,214 in employee benefits;
- $405,705 in instruction costs;
- $225,720 in general support; and
- $53,354 in transportation costs.
The district overestimated spending on community services and debt service by a combined total of $396,937, making the district’s total reported expenditures $1,062,056 more than appropriated in the district’s 2005-06 budget.
The audit recommends that district officials and the board:
- prepare accurate budget estimates that include plans to eliminate the general fund deficit;
- closely monitor fiscal activity including reviewing detailed budget status reports; and
- ensure the district’s accounting records accurately state the district’s financial position.
The audit also identified deficiencies in the district’s segregation of financial duties, claims processing and inventory control.
The district generally agreed with the audit’s findings and agreed to implement corrective action. The district’s full response is included in the audit.
School District Accountability
In order to improve accountability of the state’s schools, State Comptroller Thomas P. DiNapoli’s office will audit all of New York’s 832 school districts, Board of Cooperative Educational Services (BOCES) and charter schools by 2010. The State Comptroller’s office has completed more than 300 school audits and approximately 230 audits are currently underway.
Click here for a copy of the audit.