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September 4, 2008

 

DiNapoli: Roosevelt UFSD Ends Year With Surplus

Aggressive Action and Daily Oversight Helped Restore Fiscal Stability

Roosevelt Union Free School District ended the 2007-08 school year with a $7.3 million budget surplus, after two straight years of multi-million dollar operating deficits. The budget surplus, coupled with an additional $14 million in special state aid and tighter spending constraints by school officials, has moved the district’s fund balance from a deficit of $7.9 million to a surplus of more than $13 million, according to an audit released by State Comptroller Thomas P. DiNapoli. DiNapoli’s office has been providing real-time fiscal monitoring of the school district to ensure the district controlled spending and did not over-expend its 2007-08 budget.

“Real time monitoring worked,” DiNapoli said. “Our auditors helped the district keep spending in line, and the district took some aggressive actions to cut costs. This is a dramatic turnaround for Roosevelt, but now is not the time to rest. My audit team will continue to do a real-time audit of Roosevelt. We want to make sure what we fixed this year stays fixed. The students deserve our best efforts. Every dime counts, and we’ll be in Roosevelt making sure every dime is spent the right way.”

Auditors found that district officials’ efforts to control and maintain general fund spending within budget were effective. Expenditures fell below budget by $4 million. Additionally, management action to collect revenues for Foster Tuition payments from other school districts contributed to total increased revenues of $3.2 million. As a result, the district had a general fund operating surplus of about $7.3 million. The $14 million in additional state aid improved the district’s financial position significantly, allowing officials to eliminate the prior year’s deficit of $7.9 million and to realize a general fund balance of $13.4 million by June 30, 2008.

Additionally, the district has a potential operating surplus of over $21 million and a general fund balance of $13 million. Officials could use $766,000 of that surplus to subsidize the school lunch program’s 2006-07 deficit of $573,000 and 2007-08 deficit of $192,000. Overall, district general fund revenues totaled $81 million – or $17 million more than budgeted, but most of this was due to enhanced state aid authorized by the state legislature in January 2008.

That being said, DiNapoli’s audit identified areas requiring improvement:

  • district officials did not spend the $6 million state Academic Improvement Grant (AIG) for student achievement programs because they never formulated a program plan to do so, and the money will now become part of the fund balance;
  • the district did not receive a $4 million cash advance on future state aid to which it was entitled because district officials failed to prepare and file a five-year financial plan with the Commissioner of Education; and
  • district officials had not taken steps to be sure that former employees no longer had access rights to the district’s computerized financial system.

DiNapoli recommended that district officials:

  • earmark and segregate the $6 million AIG funds and use it only to enhance academic programs;
  • determine the cause for over-spending on special education services. Because these costs tend to be unpredictable, the impact of unexpected events could continue to have a negative impact on future budgets;
  • prepare and file the required five-year financial plan with the Education Commissioner;
  • develop a long term plan for eliminating the accumulated deficit and the ongoing operating deficits in the school lunch fund;
  • continue to monitor Special Aid fund expenditures to ensure that individual grants are not over expended, and expenditures are incurred only for approved grant purposes within the grant period;
  • review the incompatible functions performed by the District treasurer and take corrective actions; and
  • prevent former employees from having access to the district’s financial systems and institute a process that ensures the deactivation of access by employees who depart the district in the future.

Click here for a copy of the audit.


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