The topic of money in relation to school districts is typically under the white-hot glare of attention between February and May, when districts are publicly formulating and unveiling budgets for the next school year, the state votes on its budget — with the proposed financial aid packages impacting schools — and then the school fiscal plans must be approved by taxpayers.
However, there is financial maneuvering throughout the school year and this money management more than likely involves the cash reserves of the public schools. Also known as fund balances they are divided into three categories: restricted fund balance, unrestricted fund balance and appropriated fund balance.
The restricted fund balance is money that can only be used for specific expenses such as a capital expense or worker’s compensation. The unrestricted fund balance is used for unanticipated increases and revenue shortfalls. The appropriated fund balance is set aside for a certain expense legally approved by the Board of Education.
Statewide school districts have what has been reported as a record high of nearly $2.44 billion in reserves. School officials across New York have said that the money is needed to finance building renovations and repairs, enhanced security and for emergencies such as storm damage. A portion of taxpayers say the money should be refunded to them.
In the Five Towns, Hewlett-Woodmere and Lawrence district officials are aiming to maintain the legal limit of only 4 percent of the total operating budget is supposed to be in reserved.
In 2017, Hewlett-Woodmere was cited by the State Comptroller’s office for over estimating budgeted expenses by $31.1 million from 2012-13 through 2014-15. During that time the appropriated fund balance of $9.6 million was not used and resulted in the unrestricted fund balance exceeding the state-sanctioned 4 percent. The Board of Education also overfunded six of the district’s reserve funds by roughly $30.5 million and did not have documentation that established two of those reserves.
Since then district has remedied the problems. “We have closed unneeded reserve funds, right-sized balances and redirected funds from closed reserves to our new and only capital reserve fund, where we have funded $40million of capital projects from existing reserve funds and without the need to borrow,” said Assistant Superintendent for Business Louis Frontario. “The district philosophy is to stay within the legal limit and maintain just under the 4 percent legal limit.”
After being considered in fiscal stress by the Comptroller’s Office in 2013-14 and 2014-15, Lawrence righted its financial ship, state officials said. Assistant Superintendent for Business and Operations Jeremy Feder said the district tries to maintain reserves that are within the legal limits.
Lawrence also takes advice from the auditors, the New York State School Boards Association and the Association of School Board Officials of New York. “In maintaining reserves, the district assesses the capital needs, pressing necessities and future needs,” Feder said.
Jose Serrano, a Lawrence resident and district graduate, who is now a parent, said excess money should be used to, “provide better services to the kids. For example, a real nutritional lunch. That’s the least they can do.”
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