Last week the NYS Comptroller's Office released two more school audits, for New Hyde Park-Garden City and Bellmore, which followed prior audits of the Randoph and Fallsburg school districts. These audits once again criticized these districts’ budgeting practices, primarily due to their overestimation of expenses that circumvented the 4% cap allowed by the Real Property Tax Law. The Comptroller has repeatedly opined that “accurate estimates help ensure that the levy of real property taxes is not greater than necessary."
These audits are attached – read them.
The audits were also reported in Newsday:
Find out what's happening in Commackwith free, real-time updates from Patch.
Find out what's happening in Commackwith free, real-time updates from Patch.
The audit of New Hyde Park School District was particularly instructive. “Over the past five years, District officials consistently overestimated expenditures by a total of more than $8 million, resulting in operating surpluses totaling $6.3 million. To reduce fund balance and stay within the year-end statutory limit for unexpended surplus funds, District officials transferred money to District reserves and consistently appropriated unexpended surplus funds to reduce the tax levy. However, because of the District’s operating surpluses, almost $3 million of fund balance appropriated over the five-year period was not used. These practices gave the appearance that the District’s fund balance was within the legal limit when in effect it exceeded the limit each year.”
Importantly, the Comptroller was critical even though New Hyde Park had routinely applied its excess funds to offset the following year’s tax levy - which is the same lame excuse the Commack school district has used to justify its surpluses. The Comptroller however is clearly of the view that application of surpluses to the next year's tax levy does not excuse or justify a school district's violation of the law. Rather, the Comptroller has found that “because the District overestimated expenditures in its adopted budgets, it experienced operating surpluses in each of those five years and did not need the appropriated fund balance included in each year’s budget." In other words, once the New Hyde Park district determined that it had overestimated the prior year’s budget it should not have continued rolling over that surplus into the following year's budgets merely to re-appropriate it again the next year.
This year the Commack School District will again surely realize a multi-million dollar surplus, since as of May 31 (i.e., with 1 month in fiscal year to go) the District's Fund Balance shows that it has so far underspent its 2013/14 school budget by $11.8 million. Last year’s surplus was $9.8M. Yet, the District will remarkably continue its fictional claim that it is not unnecessarily burdening its taxpayers – a modern case of the Emperor has new clothes.
