Another e-mail has been circulated that again contains blatant misinformation about the district’s financial disclosures.
The e-mail alleges the “School Board Fails to Disclose NYS Real Property Tax Law Was Violated.”
In fact, on pages 3, 20, 23 42 and 63 of the 2012-13 audited financial statements posted on the district’s website at: http://www.manhasset.k12.ny.us/files/filesystem/Financials%202013.pdf and presented to the board and the community at the Nov. 7, 2013 Board meeting, the district openly disclosed the following: “The District will begin the 2013-2014 fiscal year with an unassigned fund balance of $3,921,152. This is an increase of $412,124 over the unassigned balance from the prior year, is 4.55 percent of next year’s budget, and thus is over the statutory maximum permitted by New York State Real Property Tax Law by $474,095 or 0.55 percent. The District will apply this excess as follows: $95,448 to replenish the repair reserve; $25,000 to fund the workers’ compensation reserve for use towards the 2013-14 budget; and the remainder primarily to fund expenditures in 2013-14 for textbooks and related materials and staff development to align the District’s educational programs to the requirements of the Common Core Curriculum”.
Because the district carefully monitors its financial activity throughout the year, the board had in fact put in place a resolution prior to June 30, 2013 to fund from excess fund balance its existing capital reserve.
However, the district believed the excess funds were better used as described above and as detailed in the management letter response released last November.
“As the requirements of the Common Core Curriculum become clearer, the district now realizes that the costs to bring its instructional materials and related staff development in line with those requirements will be substantial, much higher than anticipated. For example, based on the work during September and October of the District’s ELA Common Core Committee, we estimate we will spend $225,000 to align the District’s grades 1, 2 and 3 Reading and Writing curriculum alone. Therefore, it is our position that excess fund balance is better used to serve the immediate needs of our students, rather than fund the capital reserve”.
It is important to note that this decision to hold additional funds was made after consultations with the Office of the State Comptroller, district legal counsel and the district’s external auditor.
In her detailed November 7, 2013 presentation of the audited financial statements, Rosemary Johnson, deputy superintendent for business and finance, discussed the district’s actual revenues and expenses versus budget.
The handout to that presentation is posted on the District’s website at: http://www.manhasset.k12.ny.us/files/filesystem/complete%20rosemary1.pdf. Johnson regularly presents similar detailed updates of the fund balance analysis at several board meetings throughout the year, and her initial report on the fund balance projection for the 2013-14 school year is scheduled for February 6, 2014 Board of Education meeting.
The e-mail that was circulated alleges that “the school district’s annual budget process has systematically overstated the actual funding need to operate the School District by millions of dollars.”
Nothing could be further from the truth.
As disclosed in the presentation at the November 7, 2013 public board meeting and also in the audited financial statements and related handouts, excess funds were actually generated on the district’s revenue side, as the district received $533,097 in additional reimbursements of state and county aid related to prior years, and so were not related to the operations and expenditures of the 2012-13 school year. In fact, actual expenses for 2012-13 were $119,308 less than budgeted expenses of over $87 million.
Mary Ann Van Duyne, partner at the District’s external auditing firm R.S. Abrams & Co., LLP, noted at the Nov. 7 board meeting that school districts should generate 2 percent to 5 percent in excess fund balance in each year from budgeted revenues and expenses that actually exceed the revenues earned and costs incurred. The district’s tight budgeting does not permit this level of fund balance to be generated.
The district has already responded to the e-mail’s repeated statement on the District’s internal controls. The response can be found on the District’s website at: http://www.manhasset.k12.ny.us/files/filesystem/District%20Sets%20the%20Record%20Straight.pdf
Additionally, Comptroller DiNapoli’s Jan. 16 report on school districts susceptible to fiscal stress noted that school districts with cash or fund balances that are too low can be susceptible to fiscal stress; his office found Manhasset’s fund balance to be so low as to cite the district as “susceptible to fiscal stress.”
Our public schools are an invaluable community asset. As a district, we have always been, and will continue to be, transparent to our community.
Manhasset School District
