Chittenango school district responds as state audit issues recommendations

Published Jan 11, 2017 at 4:00pm

The New York State Comptroller’s Office has audited the Chittenango School District and cited what it called a lack of proper financial management. While disputing some of the state’s findings, the district is reviewing its approach to financial matters and is moving forward with appropriate changes.

The state office announced the audit Jan. 4, and has provided the district with three steps it may take to correct its business operations. Those steps include reviewing the estimates used in the budget planning process, returning money that is improperly stored in the debt service fund to the general fund and developing comprehensive policies for the establishment and use of reserve funds.

The audit said district officials had overestimated operating costs from 2014 through 2016, taking in $5.5 million it did not need to spend and developing a $5.6 million fund balance.

“The board and district officials did not develop reasonable budgets or effectively manage the district’s financial condition to ensure that the general fund’s unrestricted fund balance was within the statutory limit,” comptroller Thomas P. DiNapoli said.

The fund balance is the money available to a municipality or institution, and measures the institution’s assets against its liabilities. An unrestricted fund balance is money that may be used for any purpose, and a restricted fund balance is the money set aside for defined payments.

District Superintendent Michael A. Schiedo said the district would comply with the audit but disputed the comptroller’s numbers. The district, he wrote, spent $104.4 million against $104.7 million in revenue, an average savings of $100,000 per year over the three-year period. Schiedo said the data would be explained when the district submits its action plan. The district said a fund balance is necessary in light of state budget issues.

Last July the district adopted a Reserve Funding and Use Policy. The policy has formalized procedures that are already in use by the district, and is a resource for emergencies and unplanned expenses. They include pension contributions, state-mandated spending, and any future impact caused by the Oneida Indian Nation gaming compact.

“This approach will allow the district to avoid fiscal stress and keep any future tax increases to a minimum,” Schiedo said.

The district has averaged an increase of 1.13 % over the past five years, which Schiedo said is lower than what the state allows, and during the 2016-2017 school year the district will lower the tax levy by almost one percent.

The Chittenango School District is located in the Town of Sullivan, parts of the Towns of Cazenovia, Lenox and Lincoln in Madison County and the Towns of Cicero and Manlius in Onondaga County. It contains four schools and serves 1,920 students.

The comptroller’s office audited 12 school districts statewide for reasons ranging from financial management to conflicts of interest an general financial condition. Chittenango was one of three districts audited for financial management.