As the district indicated in our response to the audit report, we disagree with the audit findings on several aspects.
At the advice of our external auditors, the district kept more than 4% in our unrestricted fund balance for several years following Hurricane Sandy because we risked not receiving FEMA reimbursements of approximately $5 million. If FEMA failed to reimburse those funds (which was certainly a possibility at that time), it would have put the district in financial jeopardy. As soon as we received that reimbursement, we reduced the unrestricted fund balance to 4%, where it has been for the last two years.
The State criticized the fact that we have realized a mostly small yearly surplus; generally that has been between 1% and 2%, except for the two COVID years. Those were larger because schools closed in 2020, and then in the following year, costs were hard to estimate. Further, the State disagreed with using surplus to fund much-needed capital projects, such as repairing faulty steam pipes, and instead believed that the surplus should have been used in its entirety to lower the tax levy (the tax levy increase was already 0% for two years in a row at that time). Funding capital projects is legally permissible and allows the district to address facility emergencies when they occur, much as a homeowner does for their home. While keeping taxes as low as possible is certainly a high priority for us, we also have to be sure to keep our facilities safe and well-maintained for our students.
The district believes that a 1-2% surplus on a multi-million dollar budget is financially responsible and indicates careful budgeting. Unfortunately, the audit encompassed the two COVID years, which was an unusual circumstance.
Finally, we certainly object to the characterization of any of our budget practices as nontransparent. We present the budget to the community in great detail at Board of Education meetings from January through April each year, and inform the public of budget details in mailings to every resident.
The district has posted the audit report and our response to our District website.
Date Added: 8/16/2024