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East Islip overestimated its budgets during a four-year period, state says

Superintendent of schools John Dolan at East Islip

Superintendent of schools John Dolan at East Islip District offices Thursday, June 11, 2015. Credit: Danielle Finkelstein

The East Islip school district has made “unrealistic” budget estimates totaling $16.9 million over the past four years, according to an audit by the state comptroller’s office.

Special education programs, employee health insurance and teachers retirement contributions were overestimated all four years, making up most of the $16.9 million figure, the audit states.

District financial records from July 1, 2013, to March 31, 2015, were reviewed to see if the school board has been adopting “reasonable and structurally balanced budgets” and if it has taken action “to maintain the district’s fiscal stability,” according to a nine-page report prepared by Thomas P. DiNapoli’s office.

District officials told state auditors that some costs that were overestimated were unpredictable, the audit states. A written response to the audit signed by John Dolan, superintendent of schools, and Philip Montuori Sr., the school board president, defended the district’s practices.

The district “is having difficulty reconciling the fact that it has been designated by the Office of the NYS Comptroller for three years running as being in moderate fiscal stress versus the characterization in your audit that unrealistic budgeting practices can be misleading to the taxpayers,” according to their response.

Last week, the district was listed as being “moderately stressed” on DiNapoli’s latest fiscally stressed schools list. The districts’ letter concluded by saying it would be developing the required corrective actions put forth by auditors.

Most of the fund balances created by the overestimates were not used, according to the audit. The district’s budget for the 2015-16 school year is about $111 million, up from $107 million the year prior. There are six schools within the district, with 540 staff and about 4,000 students.

“Unrealistic budget estimates can mislead district voters and taxpayers and significantly impact the district’s year-end surplus funds and financial condition,” as well as the retention of excessive funds, “placing an unnecessary burden on district taxpayers,” the report stated.

Recommendations made by state officials for the school board included adopting budgets with realistic estimates, updating the fund balance policy, and no longer overestimating expenditures in budgets.


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