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Hempstead schools spent $8.6M more than voters OK'd, auditor says

Auditor Michael E. Nawrocki speaks with Newsday after

Auditor Michael E. Nawrocki speaks with Newsday after making a presentation during the Hempstead school board's meeting at Hempstead High School on Thursday, Feb. 25, 2016. Credit: Jeff Bachner

The Hempstead school district spent $8.6 million more than taxpayers authorized last year and is $2 million in the hole this year, the district’s external auditor warned the board Thursday night.

Auditor Michael E. Nawrocki told the board at its scheduled meeting the district is at “a crossroad” and, should it remain on that spending path, it may start running out of cash soon.

“As an outsider looking in . . . I certainly have concerns where we stand now in terms of 2016,” Nawrocki said during a presentation to the board. “You don’t have any fund balance, so you are really operating hand to mouth.”

Board president LaMont Johnson and schools Superintendent Susan Johnson, who are not related, complained that they had been under the impression the district had a fund balance, said to be exceeding $8 million at the end of the past fiscal year. They questioned Nawrocki on his findings.

LaMont Johnson said he had been told by Nawrocki himself, “We would be in the black for several years” and he said an influx of students, including immigrants and homeless children, had an impact that was not reimbursed.

“You were one of the persons who was saying how great it was,” he told Nawrocki, adding “the increase in enrollment cost at least $6 million.”

But Nawrocki said much of that balance was set aside for mandated expenses, including workers’ compensation, unemployment and other employee benefits. He also said the district’s internal auditors should have warned the board about its predicament.

Board member Gwendolyn Jackson, who invited the auditor to update the board, said the administration should have acted on earlier signs of the district’s financial problems.

Hempstead was found to be the most financially stressed school system in the state, with a $15.1 million general-fund operating deficit last year, a January report from the state comptroller’s office said.

Jackson said the board was told last year “that for seven months the district failed to reconcile our accounts. . . . The community, they’ve given us a budget and we’ve overspent it. That’s wrong.”

LaMont Johnson ended the discussion, saying the auditor was coming to the board with “no solutions” while it still faces mandates to educate all children.

The board did not reach any conclusion or take any action to plan to address its shortfall, while Jackson and board member Maribel Touré questioned spending on line items on the night’s agenda, including some funded through grants.

Touré, for example, questioned salary costs proposed for several positions.

“I’m not voting at all” on those items until more information is offered, Touré said. “We’re spending money that we don’t have.”

The board split 2-2, with Jackson and Touré voting to defeat several spending items, including approving funding for after-school programs at the Prospect, Marshall and Jackson Main schools, even though those came with a promise of grant money from Assemb. Earlene Hooper (D-Hempstead).

“Shame on you, Ms. Touré,” said resident Caprice Rines, who ran unsuccessfully for the school board. “Your kids don’t go to this district so it’s easy to vote things down. . . . Those are our babies, but they’re not your babies and you keep saying no.”

LaMont Johnson said the district is already working to address its shortfall but is burdened with many mandates from receiving hundreds of students, many of them immigrants.

“Those students came in. We had to hire people to meet their needs,” he said. “We couldn’t say we don’t have the money or that wasn’t in the budget.”

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