ALLEGANY, N.Y. — An audit report released for the Allegany-Limestone Central School District provided several recommendations for the district to change its practices in use of the fund balance and reserve funds.
The audit, conducted by the New York state comptroller’s office, audited the district’s budget from July 1, 2014 through April 20, 2018. The objective was to determine if the board and district officials effectively managed the fund balance and reserves. While the audit showed the board’s budgeting practices, including the reserve funds, were generally not used as decreed, district officials said the funds were set aside for unforeseen emergencies.
The audit’s key findings found the board’s budgeting practices included annually appropriating the fund balance that was not used to finance operations and overestimating appropriations by $4.8 million over a three-year period.
Also, as of June 30, 2017, the unrestricted fund balance totaled more than $2.2 million and was 10 percent of the 2017-18 budgeted appropriations, exceeding the statutory limit by approximately $1.3 million or 6 percentage points.
In addition, the reserve funds were generally not used and the retirement, repair and unemployment reserves were overfunded, the audit found.
In response, Supt. Tony Giannicchi said the audit is, in his opinion, a “typical report — anybody else’s report could come out the same way, with balancing the money.
“There were no red flags,” he added.
Giannicchi said the edicts from the state make it hard for a school district to prepare for unexpected expenses that can occur.
“It’s like keeping a savings account, some will tell you that you can’t keep a savings account, but they throw emergencies at you and we’ve got to prepare for them,” he explained. “We’re well prepared so we don’t all of a sudden have a whole list of taxes for the public.”
District business manager Mike Watson agreed and noted that district’s frugal spending and saving has helped the taxes go down over the last five years.
Watson said that as a result of the audit, however, the district has developed a corrective action plan that can be found on the district’s website at alcsny/page/1435.
The district action plan states efforts are already in place to establish more reasonable estimates for appropriations.
In addition, the district had decreased its appropriated fund balance from $759,700 in the 2014-15 school year to $430,000 for the 2017-18 school year, or a 43 percent decrease. Additionally, the appropriated fund balance in support of the 2018-19 budget is $265,000, a 30 percent decrease from the previous year.
The district also plans to work with the financial advisor to reduce the unrestricted fund balance by identifying one-time expenditures, funding needed reserves, paying off debt and funding the Smart Bonds Investment Plan. Reducing taxes will continue to be a priority as witnessed by an 11 percent decrease in the tax levy from the 2014-15 school year to the 2018-19 school year, a nine-year low.
The board also revised its financial reserve plan on June 6 to establish funding levels, conditions for use and replenishment.
And finally, the board revised the financial reserve plan on June 6 to establish a plan to reduce balances to reasonable levels to be included in the 2019-20 budget development.
