Audit results released Monday by State Comptroller Thomas P. DiNapoli show the Mt. Sinai School District overestimated expenditures for the past five consecutive years, creating surpluses that exceeded statutory limits.
According to the report, DiNapoli’s auditors found that school officials consistently presented, and the board of education approved, budgets, which significantly overestimated spending. Audit results show actual expenditures were $3.4 million less than budgeted amounts in 2007-08; $4.8 million less in 2008-09; $5 million less in 2009-10; $6.2 million less in 2010-11 and $4.1 million less in 2011-12.
The district asked voters to pierce the tax cap in 2012, presenting a 4.76 percent tax increase, which fell short of the 60 percent supermajority needed, resulting in only 52.4 percent in favor of the budget. The district, then under the stewardship of superintendent Anthony Bonasera, was put to the task of presenting a budget that did not exceed the allowable cap of 2.13 percent for the district.
“School districts have a responsibility to taxpayers to develop realistic
budgets and make adjustments when it is clear budgets are out of line,” said
DiNapoli. “District officials should engage the public to determine how to use
these excess funds.”
According to audit results, during this five-year time frame, the district overestimated employee benefits by nearly $7 million; programs for children with handicapped conditions by approximately $5 million; central services by approximately $3 million; teaching costs by more than $2 million; and pupil services by more than $1 million.
As a result of these budget variances, the district’s unexpended surplus funds continued to grow – ranging from 6 percent to 14 percent of budgeted appropriations. The state’s Real Property Tax Law, however, limits the amount of unexpended surplus funds that school districts can legally retain to 4 percent.
These budgeting practices continued even though the district’s last five independent audit reports advised the school board that the district exceeded the unexpended surplus funds’ statutory limit each year.
DiNapoli also noted that during the same five-year period, the district’s tax rate increased from $1,792 per $1,000 of assessed value in 2007-08 to $2,351 per $1,000 of assessed value in 2011-12.
Moving forward, the comptroller recommended the school board:
Develop and adopt budgets that include realistic estimates for
revenues, expenditures and unexpended surplus funds;
· Discontinue the practice of adopting budgets that result in appropriating unexpended surplus funds that will not be used to sustain district operations;
· Ensure that unexpended surplus fund amounts are within statutory limits; and
· Develop a multiyear plan that addresses the use of unexpended surplus funds in a manner that benefits the district taxpayers.
The report noted uses for the surplus funds
could include; reducing real property taxes, increasing
necessary reserves, paying off debt or financing one-time expenditures.
School district officials agreed with several audit findings and indicated they
would follow through on a number of recommendations. The district’s complete
response can be found in the final audit report seen here.
Voters passed a $55.2 million budget for the 2013-14 school year that did not exceed the district’s tax levy cap and had a spending increase of .96 percent over the last budget.
The Mt. Sinai Board of Education meets tonight at 8 p.m. in the middle school auditorium.