GALWAY — Galway school officials in recent years have overestimated spending in their annual budgets, padding the district’s end-of-year fund balance beyond the 4 percent limit in state law, according to a report by the Comptroller’s Office.
From the 2013-14 school year through the 2016-17 school year, Galway school officials overestimated appropriations by more than $7 million, about 10 percent more than was actually spent in those years.
As a result, the district boosted its beginning-of-the-year fund balance from $3.6 million in 2013 to more than $5 million in 2016. District officials have allocated part of the fund balance in annual budgets but have not spent it, due to repeated overestimation of spending, according to the comptroller report.
“District officials need to improve budgeting practices to more effectively manage the general fund balance,” the comptroller report concluded.
The most recent fund balance examined in the report, the balance as of last June 30, was inflated in part by a $1.75 million transfer the district made that year from reserves to be used in an ongoing capital project.
But district officials consistently overestimated appropriations for medical insurance by as much as 40 percent, and teacher pensions by as much 80 percent, in recent years, according to the report.
District officials accepted the audit findings and, in a response included in the final report, said they plan to address concerns raised by the comptroller. In their response, district officials wrote that they try to keep a cushion in the budget to prepare for flat-lined state aid, tax cap constraints and growing personnel costs. Officials wrote that they will look for ways to spend fund balance on one-time expenses – a recommendation included in the report – as well as keeping better control over fund balance use in the future.
Some changes have already been included in more recent budgets, district officials noted, including a reduction in the amount budgeted for health insurance and teacher pensions.
“Items specified in the report have, to date, been addressed or will be addressed in the current fiscal year,” district officials wrote in their response. “We agree with the report’s findings and believe that the report fairly presents the district’s financial oversight and fiscal position.”