SCOTIA -- The Scotia-Glenville Central School District has consistently overestimated spending in recent years, resulting in higher-than-necessary taxes, according to the state Comptroller’s Office.
Projected spending exceeded actual expenditures by a total of more than $11 million, or nearly 8 percent of the district's budget, between the 2014-15 school year and the 2016-17 school year, according to the comptroller's report. The district proposed spending more than $52 million in 2016.
In each of those years, final expenditures came in at least 7 percent lower than what district officials planned for in the budget they put before voters. The district also appropriated unused funds from one year in the next year’s budget, thereby keeping the district's fund balance below a state-mandated limit of 4 percent of spending. The surplus funds came because appropriations were higher than what was actually needed.
The report also suggested the district could have gone to voters with smaller local tax levies, particularly in 2014, when the levy was raised by 2.5 percent, and in 2017, when the levy was raised by 3.5 percent. District voters approved a 3.4 percent tax levy increase on a nearly $56 million budget last month.
“While we commend the district for decreasing the tax levy (in 2015 and 2016), had the board adopted budgets with more realistic estimates for appropriations, the (2014 and 2017) tax levy increases may not have been necessary,” the comptroller’s report contended.
District officials appeared to reject the audit findings, arguing in a response attached as part of the audit report that the yearly margin between appropriations and expenditures should fall “within acceptable audit tolerances.”
Officials also wrote in the response that “savings are generated by reductions in expenditures during the budget period,” and that district officials already follow a series of policies the comptroller included in the report as recommendations, including developing a multi-year fiscal plan and setting policy for how budget reserves will be handled.
“It is the district’s position that we do adopt realistic budgets based on historical trends,” district officials wrote in their response. “The district must consider anticipated costs (for example, contractual obligations) as well as unanticipated obligations (for example, health and safety needs, new students with special education needs).”
Bob Hanlon, a district spokesman, on Tuesday said it was important to budget a cushion for unexpected costs, like new students with expensive needs or a large number of staff that have large health care costs. He also highlighted annual internal audits that have not raised issues with how the district sets its budget.
He said the comptroller's "message was heard," and that officials may look into whether its possible to trim budget lines.
"We have to have a budget that anticipates any seen and unforeseen things down the road," Hanlon said. "It is a matter of comfort to have a good-sized cushion in the budget every year, we can't cut it close."
The report highlighted types of spending the district budgets consistently overfunded: Health insurance benefits were overestimated by an average of nearly $700,000 in each of the years covered by the report; payments to the teacher retirement system were overestimated by an average of $320,000 each of those years; and a $150,000 appropriation for contracted transportation wasn’t spent in any of the three years.
The audit also responds to the district's assertion that it generated savings during the school year.
"Overestimating expenditures each year does not constitute budget savings," the audit stated. "Instead, it creates artificial budget gaps funded by unnecessary taxes and gives the appearance that appropriated fund balance will be used to finance operations when, in actuality, the fund balance will not be used."