The Oysterponds Elementary School District has maintained an excessive fund balance not allowed by law over the last four fiscal years and has failed to develop a policy to protect the school’s electronic data, according to an audit released Friday by the New York State Comptroller’s Office.
The pre-K through sixth-grade district in Orient has experienced surpluses totaling about $164,000 between the 2009-10 and 2012-13 school years, the report states. Although auditors say Oysterponds moved nearly $1.3 million of surplus funds into its operating budget during those four years, nearly $1 million of the district’s fund balance during that time period went unused — resulting in the accumulation of 11 percent of the ensuing years’ budget, or about three times the amount by law.
“These ongoing budgeting practices resulted in taxpayers paying more than necessary to sustain district operations,” the audit read.
The report also described the amount of money Oysterponds has maintained in its retirement contribution reserve as “excessive” and stated the district made retirement payments out of the general fund instead of the reserve fund.
In addition, the report found the school board improperly appointed its president as the sole signatory on district checks under $5,000.
Current board president Dorothy-Dean Thomas replaced Deborah Dumont in 2013.
“This board action allowed one of its members to, in effect, also act as treasurer for the purpose of disbursing district funds, which is prohibited by education law,” the audit reads. “By usurping the treasurer’s disbursement functions, the board has diminished an important segregation of functions and compromised the checks and balances that are designed to help ensure that district moneys are properly expended.”
The audit also found the district’s IT system and electronic data are at risk because the school board has failed to adopt a disaster recovery plan and a breach notification policy.
In a letter from Ms. Thomas and Superintendent Richard Malone dated March 18 attached to the state report, the district agrees to follow through with the audit’s recommendations of adopting those electronic data policies and having the district treasurer sign checks under $5,000.
As for the district’s budgeting practices, Ms. Thomas and Mr. Malone said budgeting tuition for its secondary students over the last two years has resulted in an unexpected operating surplus.
In order to reduce the district’s fund balance, the school board developed a plan to establish a capital reserve fund.
“[The capital reserve fund will] help future building improvements, renovations to the facilities health and safety concerns, and on-going technology upgrades for educational programs,” the letter reads. “Unfortunately, the proposition to adopt the fund has been voted down during the last two annual budget votes.”
The school board has approved putting the capital fund proposition for another vote May 20.
Scroll down to view the complete report.