Schenectady County

Schenectady schools cautioned about use of fund balance

The state comptroller's office is cautioning the Schenectady City School District about its plan to

The state comptroller’s office is cautioning the Schenectady City School District about its plan to use a large chunk of its fund balance in the district’s 2008-09 budget.

An audit of the proposed budget released this morning by the comptroller’s office finds the district’s estimated revenue and spending “reasonable,” but cautions about the decision to appropriate $3.6 million from the district’s fund balance to help pay operating expenses.

Schenectady schools budget audit

To read the full report from the state comptroller’s office on its review of the proposed 2008-09 Schenectady City School District budget, click here.

The district’s Board of Education is scheduled to meet tonight to vote on adoption of a $155.1 million budget proposal, which is about $2 million larger than the proposal submitted to the comptroller’s office for its review.

The proposal submitted to state Comptroller Thomas DiNapoli included the use of about 62 percent of the district’s anticipated $5.8 million fund balance as of the end of the current budget year on June 30. That, according to the comptroller’s office, is too much.

“We caution district officials about their decision to finance operating expenditures with fund balance,” states a letter from the comptroller’s office to district Superintendent Eric Ely. “This practice can result in future budget gaps, since fund balance monies may not then be available in the event of future unexpected expenditures or revenue shortfalls.”

Mike San Angelo, the district’s assistant superintendent for business, said the comptroller’s office generally expresses similar concern to groups who use fund balance in their budgets and that neither he nor the comptroller’s office are specifically concerned about the size of Schenectady’s fund balance or the amount used in the proposed 2008-09 budget.

“[The comptroller’s statement] is not really a criticism,” San Angelo said this morning. “It’s more a caution that they give to just about everybody.”

In fact, San Angelo pointed out, state law actually limits the size of a school district’s fund balance to four percent of its annual budget to ensure that districts return at least a portion of any financial good fortune to taxpayers.

San Angelo also said that while the $3.6 million in appropriated fund balance is included in the budget, it’s possible if not likely that the district may actually return some of it to the fund balance at the end of the 2008-09 budget year.

“If we can manage the budget tightly, or if we can find additional revenue, we may not even have to use all of that money,” he said.

Check back with DailyGazette.com for more on this story or read Friday’s edition of The Daily Gazette.

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