A state audit of the Wainscott schools found officials in the tiny East End district had been consistently overestimating its expenses and underestimating its revenue while building a sizable surplus fund and raising residents' property taxes.
The audit urged the school board to "improve its oversight and management of the district's budget."
The Wainscott Common School District, located in the towns of East Hampton and Southampton, appropriated unused surplus funds each year, for a five-year total exceeding $3.1 million, to help finance the following year's operations. But the district actually used less than $1.9 million of the appropriated fund balance during that period and accumulated an unexpended surplus fund balance 16 times the amount allowed by statute, according to New York State Comptroller Thomas DiNapoli.
During that time, the district also increased the real property tax levy by more than $325,000, the audit found.
Wainscott was one of seven completed school district audits announced Friday. It was the only one cited on Long Island by DiNapoli's office on Friday.
"My office's audits of school districts, charter schools and BOCES help schools improve their financial management practices," DiNapoli said in a statement. "These audits are tools for schools to make sure proper policies and procedures are in place to protect taxpayer dollars and provide students with the best possible education."
The Wainscott district is one of the state's smallest. Established in 1730, the district has one school with an enrollment of about 15 students in kindergarten through third grade. There are three trustees on the school's board.
There are currently about four full-time and nine part-time employees. The district's budgeted expenditures for the 2012-13 fiscal year were about $3.5 million, funded primarily with real property taxes, according to the auditor's report.
David Eagan, president of the Wainscott school board, defended the school's fiscal position and disagreed with the state's findings.
"We have taken steps to address some of what is in the audit, but we also have families moving in and out of the district all the time and it is impossible to predict," he said.Eagan said the district must pay other districts to enroll students in grades 4-12, at a cost of between $25,000 and $60,000, and because the area has a transient population and no historical way of predicting how many students will enroll from year to year, district officials need to be prepared and budget accordingly. He also said the district's five-year plan includes tax decreases and, of the districts sending students into the East Hampton Union Free School District, Wainscott has the lowest tax rate. Less than 1 percent of the district's budget comes from state aid, Eagan said.
The audit also cited the Wainscott district for not having developed a multiyear financial plan that addresses the district's long-term operational needs or the use of unexpended surplus fund balance in a manner that benefits district taxpayers.