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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Report Highlights

Gates-Chili Central School District - Financial Management (2019M-53)

Released: June 21, 2019 -- [read complete report - pdf]

Audit Objective

Determine whether the Board and District officials adopted realistic budgets and effectively managed fund balance and reserves.

Key Findings

  • District officials circumvented the statutory limit on surplus fund balance by making more than $12 million in unbudgeted year-end transfers to capital projects and reserves, overstating encumbrances by $827,000 and not using $5.3 million in appropriated fund balance as a funding source.
  • The tax certiorari and unemployment insurance reserves were overfunded by $2.86 million as of June 30, 2018.
  • The Board increased real property taxes by $2.6 million over the last three years despite having sufficient funds to finance the District’s increased costs.

Key Recommendations

  • Provide transparency by developing and adopting budgets that include reasonable estimates for revenues and appropriations and the amounts of fund balance and reserves that will be used to fund operations.
  • Review and fund reserve balances to reasonable levels in accordance with applicable statutes.

District officials disagreed with certain aspects of our findings and recommendations but indicated they have begun to implement corrective action. Appendix B includes our comments on issues raised in the District’s response letter.

Background

The Gates-Chili Central School District (District) serves the Towns of Gates and Chili in Monroe County.

The District is governed by an elected nine-member Board of Education (Board). The Superintendent of Schools (Superintendent) is responsible, along with other administrative staff, for managing day-to-day operations under the Board’s direction. The Assistant Superintendent for Business is responsible for the administration and supervision of financial activities. The Board, Superintendent and Assistant Superintendent for Business are responsible for developing the budget.

Since July 1, 2015, there have been an Assistant Superintendent for Business and two interims prior to the current Assistant Superintendent for Business who started October 1, 2018.

Quick Facts
2018-19 Appropriations$107 million
Enrollment4,100
Total Reserves$14.4 million

Audit Period

July 1, 2015 – January 16, 2019


Local Government and School Accountability Contact Information:

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