The Smithtown Central School District should improve how officials use unspent funds by addressing debt service on capital projects instead of leaving the money unused, according to an audit by the state Comptroller Thomas P. DiNapoli’s office.

The audit, released in August, examined the period from July 2014 to June 2015, when the school district had 20 ongoing capital projects with a remaining balance of $5.1 million.

The state Comptroller’s office reviewed four projects in detail and found the district had about $1.3 million in unused funds from three of those projects which had never been closed out. That money was instead left in the capital fund from September 2012 until now, instead of being used more efficiently to pay down the debt service, according to the audit.

That money also meant that the district’s general fund balance was understated by about $498,000 every year since the 2012-2013 fiscal year.

“Without a proper closeout of projects, the Board cannot determine the final cost of each project and may be unaware of project overruns, cash balances remaining or outstanding loans that must be repaid to other funds,” the audit said.

The audit said the district should improve how it monitors each project’s financial state with scheduled reports of revenue and expenditures. The district should also close out completed projects to release unused capital funds.

Smithtown Superintendent James Grossane said in a letter to the comptroller’s office that the district has traditionally accomplished the same oversight with their own methods.

“The district does have specific procedures in place for comprehensive oversight of State Education Department assigned projects,” he wrote. “The district did not have specific procedures in place to return remaining unassigned authorized funds to their original source.”

Grossane wrote that the district instead determines whether additional work can be performed under each authorized spending category before restoring unused money to its original sources.

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