NY State Comptroller to Audit Commack School District !!

The Commack school district has again under spent their school budget by multiple millions of dollars, at least $8.5 million this past year. This is additional to the tens of millions rightfully held in rainy day funds. The state comptroller has reprimanded numerous school districts for perpetrating this same overtaxing scheme where districts tell their residents they ”need” million of dollars a year more than they actually do by inflating projected expenditures within their budget presentations to taxpayers. Then taxpayers are told if these inflated budgets do not pas, drastic cuts will be made to their children’s school programs. If you feel your property taxes are too low ignore the following, but if you feel your property taxes are out of control feel relieved that some help may be on the horizon with this upcoming audit. See stories at links below.

http://www.newsday.com/long-island/suffolk/northport-e-northport-school-...

Northport-East Northport school board special meeting heats up over state audit

The contentious issue of school districts’ cash surpluses got a rare two-hour airing Wednesday night, as officials in the Northport-East Northport system and their critics hotly debated a state report that blasted the district for overestimating spending by $33.9 million over a five-year period.

More than 100 residents and teachers braved heavy rain to show up at the William J. Brosnan School in Northport, which houses administration offices, and to frequently applaud critical speakers in a session that at one point turned into a shouting match. Complaints against the district grew so heated that the crowd prodded the school board, in a divided vote, to extend speaking time.The question of whether districts have deliberately overestimated expenses in order to pad budgets and build up cash reserves has been hotly debated for years, not only in Northport but also in many other communities across Long Island.

Local activists contend that cash surpluses, known as reserves or fund balances, should be returned to residents in the form of tax reductions. The practice of squirreling away money makes it difficult for residents to decide if schools really need budget and tax increases, they say.

Superintendent Marylou McDermott kicked off the meeting by defending her administration’s expansion of certain reserve funds. McDermott noted the district faced potential future loss of tax revenue from a local LIPA power plant, and said a financial cushion was essential. “We are very, very protective of our district,” the superintendent said.

While five board trustees praised her presentation, most residents and teachers who spoke up at the meeting took issue with the district’s budgeting and spending practices.

“How many people did you hurt by padding your budget, who had to move out of the district,” said Frank Cavagnaro, 75, who runs a lumber company.

McDermott, who has led the 5,500-student district since 2006, announced in July that she will resign in 2015, at the end of this school year.

The state comptroller’s office, which released the Northport audit this week, has underlined the issue of schools’ cash reserves in recent months, with dozens of reports that detail questionable budgeting practices in districts across the state. State Education Department officials announced last month that they, too, are reviewing the issue of budget surpluses.

In its Northport audit, the comptroller’s office found that the district overestimated expenditures by $33.9 million over a five-year period that ended Sept. 30, 2013, and actual revenue exceeded spending by nearly $13 million. The report stated much of the surplus went into a reserve fund to cover pensions of nonprofessional employees, and that the fund totaled $6.2 million -- three times annual pension costs -- in the last full year of the period reviewed. Auditors questioned whether retaining so much money “is in the best interest of district taxpayers.”

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http://www.newsday.com/long-island/education/auditors-rebuke-school-dist...

State auditors rebuke school districts for large cash surpluses

Updated October 13, 2014 10:35 PM
By JOHN HILDEBRAND john.hildebrand@newsday.com

State auditors have rebuked two more Long Island school districts for building up millions in excessive cash surpluses, bringing the total number of systems flagged for ballooning reserves since January to eight on the Island and at least 26 statewide.
The Northport-East Northport district overestimated expenses by a total of $33.9 million over a period of five years, thus amassing the large surpluses, said a new audit from state Comptroller Thomas DiNapoli’s office.
“Unrealistic budget estimates can mislead district voters and taxpayers,” the auditors stated.
In addition, a new audit found the Springs district expanded its unrestricted fund balance -- essentially a “rainy day” fund -- to $3.8 million over three years. The comptroller’s office noted that the amount was nearly four times the legal limit for that type of fund, which is 4 percent of a district’s budget.
Reports of growing cash surpluses are a sore point with many school officials on Long Island and elsewhere, who in recent years have insisted that state-imposed property tax caps are forcing them to cut staff and services and spend down reserves. Those officials also note that Albany has cut state aid to their districts twice in the past five years -- evidence, they say, that they must maintain financial cushions.
Districts must file corrective plans within 90 days of receiving a comptroller’s audit. The state Education Department is responsible for seeing that districts carry out those plans.
Northport superintendent Marylou McDermott, in an unusually sharp response to the comptroller’s office, objected to what she described as its suggestion that her district was engaged “in surreptitious or underhanded activity.”
“The district aims to create stability and predictability for district taxpayers, and effectuates this goal through long-range fiscal planning, by ‘conserving today, and protecting tomorrow,’ “ McDermott wrote.
She added that Moody’s Investors Service, a bond-rating firm, had repeatedly commended Northport-East Northport for its use of funds and financial flexibility.
Elizabeth Mendelman, president of the Springs school board, did not comment on the auditors’ conclusions but said the district agreed with their recommendations that it should adopt realistic estimates of expenditures and address the problem of excess fund reserves.
The other six Long Island districts where state auditors this year found large surpluses are: Central Islip, Floral Park-Bellerose, Mattituck-Cutchogue, Oysterponds, New Hyde Park-Garden City Park and North Bellmore.
Not all districts have managed to build cash cushions. The comptroller’s office in recent months has identified at least five districts across the state, including Patchogue-Medford on the Island, that have shown declines in cash balances described as “dramatic” by the state.
However, the comptroller’s auditors have identified far more districts as having excessive cash on hand.
Sharon Cates-Williams, a deputy state education commissioner, told members of the state Board of Regents last month that her staff intends to conduct a statewide probe of how districts handle reserve funds.
Local taxpayer advocates also have blasted districts for squirreling away what those activists regard as excessive cash reserves.
“It’s fundamentally wrong,” said Joseph Sabia, a former Northport school trustee who stepped down from that position in June. “You’re taxing residents unnecessarily, and you’re hurting people financially.”