State audit shows flaws in school district’s budgeting
According to a New York State Comptroller’s report, Huntington school district has been overestimating their budget costs for the past three years.
Because of those miscalculated expenses, the recent audit says tax levies may have been greater than necessary from 2012 to 2015, resulting in the district collecting excess money from taxpayers that became surpluses in their fund balance.
“District officials consistently presented, and the board approved, budgets which overestimated expenditures for these three years,” state Comptroller Tom DiNapoli’s (D) report said. “As a result, district officials spent an average of approximately $4.7 million less than planned each year.”
A fund balance is the surplus of budget funds at the end of the year, which can be set aside as savings until the total reaches more than 4 percent of that year’s budget. According to the comptroller’s office, if the reserve is higher than that, the money must be spent to lower property taxes, pay for one-time expenditures or reduce debt.
To avoid exceeding that 4 percent, the district rolled over the excess fund balance with the alleged intent of using the funds to finance district operations in the next budget cycle — but according to the audit that never happened.
“Total actual revenues exceeded expenditures by as much as $4.1 million and no amount of appropriated fund balance was used to finance operations,” the audit states. “As a result, the district’s tax levy may have been higher than necessary to fund district operations.”
The comptroller’s office said that between the false rollovers and overestimated costs, Huntington school district appeared to be under the 4 percent maximum — when really it wasn’t.
“As a result, the board and district officials may not have adequately presented the district’s financial condition to its residents.”
The report recommended that the district “develop procedures to ensure it adopts more reasonable budgets to avoid raising more real property taxes than necessary.”
In a response letter to the comptroller’s office, Huntington Superintendent Jim Polansky explained his position on the report.
“Our budget is an estimated spending and revenue support plan,” Polansky said. “As such, the district will continue to appropriate fund balance at a level estimated to address a potential operating deficit, but will always strive to spend within budgetary constraints and access available revenues to offset that spending.”
Polansky cited increasing enrollment — due to the reopening of the Jack Abrams STEM Magnet School in 2013 and the opening of a housing development within district boundaries in 2014 — as the main drivers of increased budget appropriations.
School board President Tom DiGiacomo said Tuesday that the district would take all of the comptroller’s suggestions seriously.
“The administration and board have already taken and will continue to take the actions recommended by the comptroller in terms of responsibly analyzing historical trends in expenditures and revenue streams, while also considering fiscal uncertainties in particular areas,” he said in an email.
District administration and the board are in the process of drafting the budget for the 2016-17 school year. The next budget meeting is on March 21 at the Jack Abrams STEM Magnet School.
