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Bellmore school district overestimated expenses by $4.4M, report says

Bellmore school officials consistently overestimated expenses by an average $4.4 million annually over three years and in doing so accumulated cash reserves far beyond allowable limits, according to state auditors who focus attention on such practices.

Bellmore, which serves 1,020 students in prekindergarten through sixth grade, is the 18th district on Long Island cited by the state comptroller’s office since 2014 for accumulating excessive reserves. Bellmore officials, in response to the state’s latest critique, said they recently took steps to keep cash reserves within legal bounds.

The issue of school reserve funds also is drawing increased attention among Albany’s state school representatives.

On Monday, the New York State Council of School Superintendents issued its own report, noting that the state currently restricts the amount of money that districts can set aside as unrestricted reserves, or “rainy day funds,” to the equivalent of 4 percent of annual revenues. The superintendents’ group acknowledged that districts face frequent criticism from the comptroller’s office for accumulating cash surpluses beyond that limit.

“But is 4 percent a reasonable limit?” the report asked.

The council’s report went on to say that the Chicago-based Government Finance Officers Association, a private group representing fiscal experts in the public sector, had recommended that school districts set aside reserves equal to 10 percent of their annual budgets.

“In short, what is prescribed as a maximum for ‘rainy day funds’ for New York State school districts is less than half the level that experts recommend as a minimum,” the report said.

In Bellmore’s case, auditors found that the district had consistently overbudgeted for expenses such as health insurance each academic year, from July 2012 to June 2015. As a result, they reported, unrestricted cash reserves at the end of each year were equivalent to between 7 percent and 8 percent of the district’s total budget.

The system’s 2015-16 budget was $33.5 million.

“Budgeting practices that overestimate expenditures and result in the accumulation and retention of excess funds can result in tax levies that are greater than necessary,” said the auditors, who are assigned to the comptroller’s regional office in Hauppauge.

Bellmore officials, in response, said district voters on May 17 approved the establishment of a reserve fund for capital expenses. This step, they added, allows the district to keep within the law by transferring unrestricted cash to the new fund, which is restricted to spending on building repairs and improvements.

Local officials said their budgeting practices allowed them to preserve scholastic programs for students while also keeping within the limits of state caps on taxation that first were imposed in 2012.

“The district prides itself on our proven track record of enhancing the educational program for our children while keeping taxes low for our community,” said a statement signed by Bellmore Superintendent Joseph Famularo and Marion Blane, the school board’s president.

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