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October 24, 2007

 

DiNapoli: Roosevelt School District Within Budget
But There are Still Concerns to be Addressed

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The Roosevelt Union Free School District’s spending is generally within the limits of its enacted budget but several areas of concern that could lead to overspending need to be addressed, according to the first quarterly report on the district’s finances released today by State Comptroller Thomas P. DiNapoli. The district also incurred millions of dollars in deficits while under State Education Department oversight.

“Roosevelt’s spending is within budget, but it’s important to remember that this is only the first quarter,” DiNapoli said. “Spending is typically much lower during July and August. Roosevelt has to improve its budget monitoring, set aside funds for known expenses and only include revenue that it’s certain to receive.

“The Legislature’s potential bailout of Roosevelt will help the district recover from the lack of fiscal discipline that occurred under SED oversight. SED and Roosevelt have a fiduciary responsibility to the State, local taxpayers and most importantly, the students, to responsibly manage its finances.”

In March 2007, DiNapoli announced his office would conduct real-time monitoring of the district’s finances to determine whether the district’s spending complied with its budgeted appropriations for FY 2007-08.

The first report, covering the first quarter of FY 2007-08, found the district spent $7.56 million, which was within the limits established by the school district’s board in the enacted budget.

The report also identified several areas of concern. Specifically, the district should:

  • establish budget appropriations for several budget accounts to enable monitoring of compliance;
  • enter budgeted revenues in its accounting records and monitor the revenue portion of the budget; and
  • provide budget status reports to the board on a regular basis.

The report noted a number of additional concerns.

  • The district has not filed its required unaudited annual financial statements with the Department of Education, which were due Aug. 30, nor have independent auditors completed the district’s audited financial statements, which were due Oct. 15.
  • The district’s appropriated $4.2 million for Board of Cooperative Educational Services in FY 2007-08 may not be sufficient. The district appropriated the same amount in the previous fiscal year and overspent that appropriation by $680,000. In addition, the district has not encumbered any funds for BOCES expenses.
  • The district is experiencing cash flow problems because of prior years’ fund deficits and an anticipated operating deficit for FY 2006-07.
  • The district budgeted for $4.8 million in federal and state grants when it has only been awarded $3.5 million in grants. The $1.3 million in additional grants are still under review.

The report recommends that district officials:

  • file the district’s annual report with the State Education Department;
  • regularly submit budget status reports to the board;
  • encumber funds for all known expenses;
  • update the cash-flow schedule and submit it to the board monthly; and
  • should not incur expenses for grant programs until funding is confirmed.

The district generally agreed with the audit’s findings and indicated it will implement corrective action. The district’s full response is included in the report.

To monitor Roosevelt Union Free School District in real-time, an auditor from the Comptroller’s office is on site every day reviewing expenses. In addition to monitoring the district’s budget, the Comptroller’s office is providing recommendations to help the district build a financial management infrastructure so it can eventually prudently manage its own finances. This quarterly report is the first of several reports that will offer recommendations to the district on how to improve its fiscal practices and management.

Click here for a copy of the report.

Click for the Comptroller's audio statement

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