State auditors are criticizing budgeting practices in the DeRuyter Central School District. A review finds the district is relying on reserves to fund operations and may need to raise school taxes.
The State Comptroller’s Office released an audit of the DeRuyter School finances Tuesday.
The report says over the past three years the school district has relied heavily on its cash reserves in order to fund operations. While the reserves have kept taxes stable for residents the money is running out and the district may not have enough money on hand to deal with unexpected emergencies.
Over three years, the school board has used over $1.5 million in reserves to offset operating expenses.
During the 2013-14 school year, the district used general fund money to cover a $44 thousand dollar loss in the school lunch program.
The district Business Administrator, Board President, and Superintendent told auditors that the district used fund balance to avoid raising taxes and comply with the property tax levy limit.
The comptroller says the district needs to develop budgets that do not rely on one-shot revenues, such as fund balance, to finance on-going expenses.
District Business Administrator Jim Southard says the district is relying less on fund balance to fund operations. The spend down was part of a five-year plan following state aid cuts in 2008. Southard says it’s a careful balance between the use of reserves and increasing taxes.