State Audit Faults Homer School District for Carrying Excessive Budget Surplus
The New York State Comptrollers Office has released a critical review of the Homer Central School Districts' budget practices, the state audit says the district has been carrying excessive fund balances and the school board has been needlessly raising taxes.
In a report issued last week from State Comptroller Tom DiNapoli's office, auditors said that over the
last ﬁve years, surplus district funds have grown to $15.5 million.
The report says over that same time period the District collected $2.4 million more in taxes than necessary for operations.
The review found that the budget surplus was generated by over estimating salaries, employee benefits, debt and building utilities. The Comptroller says those expenses should be predictable because they are based on ﬁxed contracts and debt schedules. The District also knows its utility rates on an annual basis.
The report says the school Board adopted budgets over the last four years that were, on average, 10 percent higher than the previous years actual expenses, while actual expenses were, on average, only increasing 1 percent.
Auditors were critical of the amount of money in the districts workers compensation and unemployment reserves. At the end of last year the reserves totaled $6.8 million. Although the district has had a five year spend down plan to use the funds, the plan has not been followed.
The report says due to poor budget estimates, the school board has approved increases in the tax levy over the last three years that may not have been necessary. Operating surpluses generated in two of the ﬁscal years were more than the tax levy increases. Auditors concluded that If the tax levies had remained flat since 2009, the total amount of taxes paid by residents in the Homer School District would have been at least $2.4 million less than what they actually paid.
Homer Schools Superintendent Nancy Ruscio says she can only speak to the budgeting practices that have occurred over the past three years when she was named Superintendent. Ruscio points out that while the state is critical of the surplus funding, the district has lost $13 million in State aide since 2008.
Ruscio says since she took over the district hired outside auditors to conduct a forensic audit, which resulted in a balanced plan to spend down excess reserves and surplus.
Nearly $4 million dollars of the reserves was approved to help offset the nearly $21 million dollar capital improvement project that voters approved back in December.
Ruscio also points out the difficulty of crafting an accurate budget when state aide figures often are not known before the school budget must be finalized. When the district receives more aide than anticipated it creates the surplus.
Ruscio disagrees with the Comptrollers assertion that the school board needlessly raised taxes, she points out that maintaining healthy reserves helps avoid placing extra burden on taxpayers for unbudgeted repairs and expenses. Recently the district had three major repairs that were not included in the budget .
Ruscio says the school board is committed to a transparent budget and will continue working with the board and audit committee to implement the spend down plan to reduce the reserves and budget surplus.