Comptroller to central school district: change budget procedures

To prevent the misappropriation of funds, New York State Comptroller Thomas P. DiNapoli is recommending several changes in the way that the Bellmore-Merrick Central High School District adopts their budget. Such changes could also potentially lead to a decrease in residential property taxes.

At the beginning of each fiscal year, the Board of Education for the district must estimate a budget for the coming year, including all operating needs.

In a report analyzing the finances of the district between July 1, 2012 and June 30, 2016, DiNapoli found that the total amount of appropriations for the four-year period exceeded the actual expenditures by approximately $21.3 million — a 5.5 percent overestimation.

According to the New York State Real Property Tax Law, if a district adopts a budget over 4% of what is needed for operational costs, they must use the remaining funds towards the following years expenses.

DiNapoli concluded that the reasons for this disproportionate surplus of money include overfunded employee benefits, teachers’ salaries and building operations

District officials asserted that they cannot control certain circumstances and therefore must acquire surplus funds. Such circumstances would include teachers taking leaves of absence or separating from a school in the middle of a fiscal year, the transience of employees working within building operations and the fluctuation of fuel costs.

Additionally, the Board appropriated $5.7 million into their reserve funds and used $47,753, which is less than one percent of the total amount. This left the District with four times as much money as they used. According to DiNapoli, these excess reserve funds could be used to lower the tax levy.

Other findings involve Worker’s Compensation and the Unemployment Insurance Reserve. During the four-year period, the District exceeded the Worker’s Compensation funding threshold the Board set forth in August 2008 by almost $1,000. The Board set forth a threshold for Unemployment Insurance Reserve as well, which the District exceeded by almost $10,000.

DiNapoli offered the following recommendations to ensure the Board and the District adopt a more accurate budget for the next four years: The Board should adopt a budget that accurately depicts the District’s operating needs and stop appropriating funds and reserve funds that are not necessary for these operations. They must also update their fund balance policy and ensure that reserve funds are established accordingly. The District should monitor reserve funds and use any excess funds to benefit District residents, DiNapoli said.