A state audit of the New Hyde Park-Garden City Park Union Free schools found officials in the district overestimated expenses by more than $8 million over five years, resulting in misleading operating surpluses totaling $6.3 million.
The financial management report, released Wednesday by the state comptroller's office, also found that to reduce the fund balance and stay within the year-end statutory limit for unexpected surplus funds, district officials transferred money to district reserves and consistently appropriated surplus funds to reduce the tax levy.
New Hyde Park-Garden City Park Superintendent of Schools Robert Katulak said, the board of education is studying the report but plans to take "creative corrective action."
For the audit of the district, which operates four schools with about 1,615 students and 450 employees in the towns of Hempstead and North Hempstead, officials examined the management of district finances from July 1, 2011, through June 30, 2013. Auditors looked back as far as July 1, 2008, to evaluate the district's financial condition and provide "perspective and background," the report said.
The report indicated that because of the district's operating surpluses, almost $3 million of fund balance appropriated over the five years was not used, giving "the appearance that the district's fund balance was within the legal limit when in effect it exceeded the limit each year."
Auditors also found the district routinely funded its retirement contribution reserve with operating surpluses at year end, instead of funding the reserve through the annual budget process, "which would have been more transparent to taxpayers," the report said.
Recommendations included that board and district officials develop budgets that include "realistic expenditures" and stop "appropriating unexpended surplus funds not needed for district operations."
The report also concluded that district officials should plan to use excess unexpended funds to best benefit the district taxpayers including paying off debt and reducing district property taxes.