Preliminary Comments on the July BOE Reorganization Meeting

Based on the published draft agenda for the July 7 Commack BOE Reorganization Meeting, a resolution (Item G) will be proposed to transfer $6M from the Fund Balance to six (6) Reserve Funds ($1M to each Fund). It is speculated that this somewhat unusual action is the first part of the response of the BOE to probable criticism of past financial practices in CUFSD by the NYS Comptroller. Time will tell if this conjecture is accurate; the Comptroller’s audit report should be forthcoming soon. But, chances are that the transfer is related to required corrective action and represents a decision (no public discussion) to transfer funds into reserves rather than return it to the community via reduction in the tax levy. There is some hope that this marks the beginning of the end of consistently grossly overestimated budgets, and the associated unnecessary increase in tax levy.

Transfer of accumulated surplus to reserves is an option open to the BOE, though such transfers are expected to be reasonable. Spreading the money around is probably meant to meet this condition. It of interest to note some relevant past comments of the NYS Comptroller in their recent report on the audit of the Northport S.D.:
- Page 8: “Generally, school districts are not limited as to how much money can be held in reserves.”
- Page 8: District officials should include in the annual budget the amounts they anticipate placing in reserve funds instead of routinely using surplus funds to increase reserves at year’s end.”
- Page 9: A more transparent method would be to include an appropriation to increase reserves in the budget presented to the taxpayer for approval.”
- Recommendation 4: Ensure that budgets presented to the voter for approval are transparent and inform residents of their intent to increase reserves by including an appropriation that quantifies such increase.”

Let the spin begin.