DiNAPOLI: EAST RAMAPO SCHOOL BUDGET HAMPERED BY DEFICITS, INADEQUATE RAINY DAY FUNDS

Facebook Twitter Plusone Pinterest Linkedin Tumblr Digg Email

The East Ramapo Central School District continues to face significant fiscal stress due to unrealistic budgeting, continued operating deficits and inadequate reserve funds, according to a follow-up audit issued Tuesday by New York State Comptroller Thomas P. DiNapoli.

The report assesses the district’s progress with implementing recommendations made in previous audits in August 2011 and July 2013. Auditors discovered most of these recommendations were not addressed or only partially implemented.

“East Ramapo school district officials must do a better job managing their finances,” said DiNapoli. “Although our follow-up report shows some progress has been made, too many major budget problems remain. Moving forward, careful short- and long-term budget planning is needed for the district to avoid a worsening financial situation.”

DiNapoli’s Fiscal Stress Monitoring System has previously designated the school district in “significant fiscal stress” for both 2013-14 and 2014-15 fiscal years. The school did not receive a score in 2012-13 because it did not file necessary financial information.

Most recently, auditors determined the district has not retained a reasonable amount of fund balance to address unanticipated needs or to provide necessary cash flow for operations. The district had negative unrestricted fund balances for 2012-13 and 2013-14 of $8,904,988 and $7,027,250. The unrestricted fund balance for 2014-15 was $1,402,568. The district’s unrestricted fund balance is projected to decrease to approximately $587,000 by the close of the 2015-16 fiscal year, increasing the likelihood that the district will experience some level of fiscal stress.

Auditors also found that East Ramapo officials have not properly budgeted for expenditures during the last three fiscal years. For example, in 2012-13 and 2014-15, district appropriations were underestimated by $9.2 million and $738,000. And in 2013-14, appropriations were overestimated by $8.9 million.

In addition, the district has not properly monitored or adjusted budgeted revenues and expenditures to avoid operating deficits. The district had operating deficits of $7,230,365 and $216,629 in 2012-13 and 2013-14. Although the district had an operating surplus of $9,120,376 in 2014-15, this resulted from one-time revenues from the sale of two properties totaling $10.1 million.

While the district projects a small operating surplus (less than $25,000) for the 2015-16 fiscal year, auditors project an operating deficit of approximately $815,000. The deficit will likely result from underestimated salaries. As of February 2016, the district overspent $718,000 on salaries and is projected to exceed budgeted amounts by as much as $1.6 million.

The follow-up report noted the district partially implemented the following recommendations:
· Strengthen internal controls to protect district resources;
· Ensure all health insurance plan participants pay their portion of premiums on time;
· Obtain quotes for the procurement of professional services;
· Enter into written agreements for professional services contracts;
· Enter into written agreements for textbooks loaned to non-public schools;
· Maintain records that explain the use of fund balance in the budget; and
· Accurately estimate year-end fund balance.

East Ramapo CSD is located in Rockland County and serves students in the towns of Ramapo, Clarkstown and Haverstraw.

To read the complete report, visit: http://www.osc.state.ny.us/localgov/audits/schools/2016/eastramapo.htm

Facebook Twitter Plusone Pinterest Linkedin Tumblr Digg Email