Determine whether the East Moriches Union Free School District’s (District) Board of Education (Board) and Superintendent effectively managed the District’s financial condition.
The Board and Superintendent did not effectively manage the District’s financial condition.
- District officials overestimated appropriations, which made it appear that the District needed to increase taxes and use appropriated fund balance to close projected budget gaps, but the appropriated fund balance was not used to finance operations.
- The surplus fund balance has continuously grown over the past five fiscal years. As of June 30, 2021, it was over $7.1 million, or 24.3 percent of the next year’s budget, exceeding the 4 percent statutory limit.
- The District’s budgeted appropriations from 2016-17 through 2020-21 exceeded actual expenditures by $6.3 million, or 4.5 percent.
- Officials did not use the retirement contribution reserve to pay annual retirement contributions. Its excessive balance is enough to cover annual retirement contributions for nine years.
- Develop and adopt realistic budgets and a comprehensive reserve policy.
- Comply with the statutory fund balance limit.
- Develop a plan to use excess surplus fund balance that benefits District taxpayers.
District officials generally agreed with our findings and indicated they plan to initiate corrective action.