State audit faults Fort Ann school district over surplus

ANDREW DAVID KUCZKOWSKI

The Post- Star

Oct 28, 2018

FORT ANN — The Fort Ann Central School District kept more money than allowed in its savings while overestimating the district’s annual costs, according to a three-year audit by the state Comptroller’s Office.

New York school districts’ unrestricted fund balance (or savings) should be 4 percent of the next year’s annual budget, New York’s Real Property Tax Law advises.

The Comptroller’s Office reviewed three Fort Ann budgets from the 2015-16 to 2017-18 school years.

On average, the annual budget was about $11,687,791, while the previous year’s fund balance was at $1,623,214 or about 13.9 percent of the next year’s budget, the comptroller reported.

The percentage grew because the district overestimated some of its expenses.

“The most significant overestimations in fiscal year 2017-18 were for services provided by the Washington-Saratoga-Warren-Hamilton-Essex Board of Cooperative Education Services (BOCES) and private school tuition, which were overestimated $440,970 (28.32 percent),” the comptroller reported.

Due to the overestimations, unspent money at the end of the school year goes into the unrestricted fund balance.

The 2017-18 school year’s expenses were overbudgeted by $70,590. The unrestricted fund balance went down because the district disbursed money for expenses that were not budgeted.

The audit reported that the district sent $200,000 to the capital fund for an upcoming capital project and $203,090 to fund an emergency power transformer replacement.

Without those transfers, “… the district’s 2017-18 operating surplus would be approximately $473,680, and unrestricted fund balance would increase to approximately $2 million, or more than 18 percent of the next year’s budgeted (expenses),” the comptroller reported.

The Comptroller’s Office said there can be multiple fixes or a mix of them to alleviate the unrestricted fund balance issue.

The district has to adopt annual budgets that do not overestimate expenses and align to the costs of recent years. To reduce the unrestricted fund balance, Fort Ann can either fund one-time expenses, fund needed reserves, pay off debt or reduce the district’s property taxes.

In a response letter, the Fort Ann school district said it would fund one-time expenses like updated security cameras, a new school bus lift and an additional lawn mower through its unrestricted fund balance. In addition, the district will fund the capital reserve and assist property taxes.

For the 2018-19 school year, the district received $872,077 less state aid than 2017-18. The audit response letter by the district said the school utilized $319,625 to “offset and reduce property taxes.” The tax levy went up 1.89 percent out of the allocated 3.6 tax cap.

Brian Butry of the Comptroller’s Office said the audits are “advisory in nature.” The school has no mandatory set timetable to alleviate the unrestricted fund balance.

Fort Ann Superintendent Kevin Froats did not respond to an interview request on Wednesday.