Audit scolds SSCS for savings

7/6/2016

By Patsy Nicosia

Sharon Springs Central School is standing behind the way it manages its fund balance after what amounts to a slap on the wrist from the State Comptroller's Office.
"It's like an 'atta boy," from the school board and then a slap on the wrist from the Comptroller's office," Business Manager Tony DiPace said.
"With the size of the school and our budget, it only takes one special ed student or one natural disaster like a flood and that fund balance would be gone. Then what would we do?"
SSCS is one of seven schools included in a routine audit of local governments and school districts released by the state on June 17.
The audit criticized SSCS for appropriating "more fund balance than was needed in the adopted budgets for the three-year period ending June 30, 2015 and recommended the district "adopt more accurate budget estimates...discontinuing the practice of adopting budgets that appropriate unexpended surplus funds that will not be used."
In the district's required response to the audit, Superintendent Pat Green said the district has always been conservative when estimating expenditures it has little control over, like fuel and utility costs.
An August 2014 flood cost the district an unexpected $100,000, Mr. Green pointed out, and the district constantly needs to shift between one or two teachers for the elementary grades and needs to budget for that contingency.
The unreliability of state aid forecasting also makes conservative budgeting necessary, he said, noting that in 2011, the first year of Gap Elimination Adjustment, the state withheld $1.8 million and "absent of conservative budgeting, the district would not have been able to react to the GEA."
The district's tax levies have consistently been below the state's property tax caps, Mr. Green wrote; in 2013, there was no increase in the tax levy, in 2014, it dropped by one percent, and in 2015, by nine percent.
Cutting taxes even more in order to reduce the surplus fund balance could lead to a situation that's impossible to correct, he said, since the tax cap would limit the next year's levy.
"A one-time reduction in taxes could lock the district into a flat levy that would deplete the fund balance and completely deplete operating reserves."
Mr. Green and Mr. DiPace both said the district plans to address the Comptroller's concerns over time by adopting budgets with less built-in contingencies and tax levies that are below the state's property tax cap.