Determine whether the West Islip Union Free School District’s (District) Board of Education (Board) reasonably and transparently managed fund balance and reserves.
The Board appropriated fund balance that was not needed to fund operations and was not transparent when funding reserves. The Board:
- Adopted budgets that overestimated appropriations by $24.6 million, or approximately 5.2 percent over a four-year period.
- Annually appropriated fund balance that was not needed to pay operational expenses and made year-end unbudgeted transfers to reserves, in order to stay within the statutory surplus fund balance limit.
- Did not properly establish the workers’ compensation and unemployment insurance reserves which are also overfunded, having enough money to pay the average annual expenses for eight and 51 years respectively.
The Board and officials’ budgeting practices and management of fund balance and reserves resulted in levying more taxes then were needed to fund operations.
- Adopt realistic budgets and discontinue appropriating fund balance that is not needed.
- Use overfunded reserves to benefit District residents as required.
District officials generally agreed with our recommendations and have initiated or indicated they planned to initiate corrective action.