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October 28, 2011

Comptroller DiNapoli Completes School Audits


New York State Comptroller Thomas P. DiNapoli today announced his office completed the audit of the Clinton Central School District, Hudson Falls Central School District and the Perry Central School District.

“My office’s audits of school districts and BOCES help schools improve their financial management practices,” DiNapoli said. “These audits are tools for schools to make sure proper policies and procedures are in place to protect taxpayer dollars and provide students with the best possible education.”

Clinton Central School District - Financial Condition (Oneida County)
District officials financed construction and legal costs associated with a capital project by recording improper interfund loans to the capital project fund. As a result, available fund balance was consistently overstated. Because the capital project fund did not have the financial resources to repay more than $1 million interfund loans, auditors calculated that the reported fund balance of $1.5 million at June 30, 2010 was actually about $497,000. Also, officials have annually issued revenue anticipation notes to finance district operations. The district currently lacks the fiscal resources to properly comply with the statutory requirements for issuing RANs and still pay district bills.

Hudson Falls Central School District - Budgeting Practices and Internal Controls Over Selected Financial Activities (Washington County)
During the past three fiscal years district officials routinely overestimated appropriations and underestimated revenues even though data was available to help them develop more accurate budget estimates. As a result, the district generated more than $5.1 million in operating surpluses over a three-year period. Further, district officials overfunded an employee benefits accrued liability reserve by $3.7 million. The district's continued practice of retaining fund balance in excess of the amount allowed by law and overfunding its EBALR account resulted in the district levying approximately $5 million more in taxes than were needed to fund operations for the 2009-10 fiscal year. District officials also need to improve controls over information technology and payroll payments to interim officials.

Perry Central School District - Fund Balance and Reserves (Livingston County)
The board and district officials have not properly managed fund balance in accordance with statute. The district has accumulated approximately $5.5 million in excess fund balance and unnecessary reserves that could be better used for the benefit of taxpayers. Because officials routinely overestimated expenditures and underestimated revenues, the district generated operating surpluses totaling more than $2.7 million over the last five fiscal years. To stay within the legal limit for retaining fund balance, district officials transferred excess fund balance to various reserves at the end of the fiscal year. However, district officials did not disclose their intent to fund reserves during the budget process.

 

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