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NYS Comptroller


Audits of Local Governments and School Districts

Middletown Enlarged City School District – Financial Condition (2017M-245)

Released: February 16, 2018 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to determine whether the Board and District officials effectively managed the District’s financial condition for the period July 1, 2016 through June 30, 2017.


The Middletown Enlarged City School District is located in the City of Middletown and Towns of Goshen, Wallkill and Wawayanda in Orange County. The District, which is governed by a nine-member Board of Education, has approximately 7,160 students. Budgeted appropriations for the 2016-17 fiscal year totaled approximately $173.5 million.

Key Findings

  • The Board appropriated $27 million of fund balance in District budgets for the last five years, but only $1.4 million was used.
  • The District’s unrestricted fund balance has exceeded statutory limits in each of the past five years.
  • The Board has not adopted a fund balance policy.

Key Recommendations

  • Discontinue the practice of adopting budgets that appropriate fund balance that is not needed to fund operations.
  • Ensure that the amount of unrestricted fund balance complies with the statutory limit.
  • Adopt a fund balance policy that outlines the level of fund balance to be maintained and use surplus funds to fund one-time expenditures, pay off debt or reduce property taxes.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email:
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236