Greenport School District officials are defending the district’s financial standing after the state reported earlier this month that the district needs to improve its oversight of the budget process.
During the school board’s meeting Monday night, Superintendent David Gamberg and district business administrator Diana Duell gave a presentation about Greenport’s financial condition and chided media coverage of state Comptroller Thomas DiNapoli’s audit of the district.
The audit, which was released Sept. 9, evaluated the district’s finances between July 1, 2012 and March 31, 2014 and found it had overestimated expenditures by about $3.3 million over those three fiscal years.
“Had district officials used more realistic budget estimates, they could have avoided the accumulation of excess fund balance,” the report states. “The district’s practice of consistently appropriating fund balance that was not needed to finance operations, in effect, circumvented the statutory limitation of unexpended surplus fund balance to no more than 4 percent of the ensuing year’s appropriations.”
Mr. Gamberg said he met with state auditors Aug. 13 and they described their preliminary report as “nothing horrendous.” Mr. Gamberg said they also told him: “We didn’t find much here and that’s a testament to how the district has been run.”
Ms. Duell described the audit as a “very short report” and said it was “unfortunate” it didn’t expand the scope to five years. If the audit included 2008-09, then she said it would have shown the economic downturn’s effect on the district.
Over the past few years, the district has focused on using leftover funds from the annual budget to replenish its depleted reserves, Ms. Duell said.
The unassigned fund balance, commonly referred to as a “rainy day fund,” went from $303,000 in 2008-09 to $869,000 in 2012-13, she said. The importance of this fund is to pay for unexpected expenses, such as additional students moving into the district or increases in special education costs and services, Ms. Duell said.
The assigned appropriated fund balance is used to offset property tax increases, she said, adding that the fund increased from $250,000 in 2008-09 to $350,000 in 2012-13.
In a letter responding to the report, Mr. Gamberg said the district requested an extension of the audit’s scope to 2008-09 in order to “present a clearer picture of the district’s depletion of reserves and fund balance to historically low levels in times of economic downtown, and the subsequently successful, multi-year plan of the district.”
On Monday, both Mr. Gamberg and Ms. Duell said news headlines focusing on the negative aspects of the report may have mislead district residents.
The superintendent gave a presentation on how the district uses reserve funds and said “none have reached the maximum amount” allowed by law. He also stressed the importance of districts saving for “dedicated purposes” like repairs, workers’ compensation and unemployment insurance.
“It’s pertinent and wise for districts, at the end of the year after all the bills are paid and you have $200,000 leftover, to start putting them into these reserves,” he said. “I would congratulate the Board of Education and my predecessor [Michael Comanda] because, in the next budget, we’re going to see how the district went from being depleted to almost no reserves to a point where we’re starting to build up.”