Mount Vernon Schools 'Susceptible To Fiscal Stress': Comptroller

MOUNT VERNON, NY — The Mount Vernon school district was the only school system identified as being "susceptible to fiscal stress" in a just released report from New York Comptroller Tom DiNapoli.

In all, 31 school districts statewide were named as having some level of fiscal concern in the report. Mount Vernon Schools were among 21 identified as being susceptible to fiscal stress. Two school districts in New York were identified as being susceptible to significant fiscal stress.

DiNapoli said the continuing pandemic has put added financial pressures on school systems.

"This is a time of unprecedented uncertainty as the COVID-19 pandemic continues to disrupt school district operations and finances," DiNapoli said. "I urge school district leaders to closely monitor their financial conditions, even if their fiscal stress scores were low in the early days of the crisis."

School districts are given a fiscal stress score each year based on factors, including year end fund balance, operating deficits, cash position and reliance on short-term debt.

School districts in fiscal stress share some common issues, DiNapoli noted. Nearly all fiscally stressed school districts (87.1 percent) have low liquidity, also known as “weak cash position,” meaning there may not be enough cash on hand to cover operating costs. Almost half have a new or increased reliance on short-term cash flow debt, which can indicate structural budgetary imbalance, according to the report.

DiNapoli’s report also reviewed environmental risk factors, which are often out of the district’s control and could be related to an increased chance of fiscal stress.

Environmental risk factors identified include having a high percentage of economically disadvantaged students, high teacher turnover, decrease in local property values, low budget vote approval rate, high percentage of English language learners and large class sizes. Environmental stressors are likely to have a financial impact during a recession, such as the one that began in 2020, according to DiNapoli.

In addition, the state has withheld 20 percent from certain state aid payments to school districts, amounting to at least $300 million statewide. In mid-January 2021, the state Division of the Budget indicated that most of the funds withheld are expected to be paid in the current state fiscal year.

The report indicated that the possibility of additional federal aid may mitigate some risk of stress in the near term.