Local News
STATE SCHOOLS: DiNapoli says reports show districts holding too much funding in reserve
After completing 733 audits of all the New York’s public schools and Boards of Cooperative Educational Services, state Comptroller Thomas DiNapoli has concluded that $880 million in excess funds has been unnecessarily held in reserve accounts, missed cost savings and questionable payments made by school districts across the state.
The findings come following five years of audits from August 2005 to February 2010, and were published in a report called “Making the Grade: Five Years of School District Accountability.”
“Over the last five years my auditors identified $615 million that district’s unnecessarily set aside at taxpayers’ expense,” DiNapoli said. “That’s money that could have been used to lower property taxes. Now more than ever, every dime counts.”
Locally, DiNapoli named Niagara-Wheatfield in these findings, as his office criticized the district in 2009 for “unreasonable budgets” and that the district has “approximately $8 million in excess funds that that could be used to benefit taxpayers.”
DiNapoli’s office audited Niagara-Wheatfield in the 2007-08 school year and released the findings in March 2009. At the time, district officials defended the need for reserves, saying it was done to avoid future fiscal hardship.
In his 2009 annual report released Tuesday, DiNapoli said that 285 school districts and BOCES districts across the state improperly retained the money in various reserve accounts, with the majority held in employee benefit accrued liability reserves.
DiNapoli praised the efforts of the audits and said many districts were in compliance in terms of internal controls.
“By any measure, the five-year audit effort has been a success and has led directly to improvements and taxpayer dollars being saved,” DiNapoli said. “Most school districts, like most public institutions are generally run well.”
He went on to say that there is always room for improvement and his office has identified $24 million of potential cost savings and revenue enhancements school districts can receive.
DiNapoli cited $49.4 million was awarded by 100 districts for contracts without obtaining competition. $140 million in missed Medicaid reimbursements, $25 million in improper contract payments and nearly $18 million in fraud were also identified by areas of concern by auditors.
In his report, DiNapoli also made suggestions to school districts to address internal control issues. He suggested creating accurate budgets that reserve the appropriate levels of fund balance, school boards formally document employment agreements with school administration in writing, have their school attorney review all documentation and approve all information with school administration.
“In the coming year, my auditors and researchers will begin their new mission of identifying efficiencies and cooperative opportunities to save taxpayer dollars and help school districts weather the current fiscal crisis,” DiNapoli concluded.
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