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State says Bellmore-Merrick schools overestimated expenditures

Sanford H. Calhoun High School is one of

Sanford H. Calhoun High School is one of three high schools in the Bellmore-Merrick Central High School District. (Aug. 2, 2011) Credit: T.C. McCarthy

A state audit of the Bellmore-Merrick Central High School District found that the district overestimated its expenditures by $21.3 million over three years, leading it to exceed the legal limit on unrestricted funds.

The school district disagreed with some of the auditors’ findings and said its approach “will help in preparing future budgets with potentially shrinking revenues,” said a letter to the state comptroller’s office from the district superintendent and Board of Education president.

Comptroller Thomas DiNapoli’s office looked at the school district’s financial condition from July 1, 2012 to June 30, 2016.

Auditors say the district overestimated its expenditures by $21.3 million for the 2012-2013, 2013-2014 and 2014-2015 fiscal years. A rainy-day fund of $17.4 million was largely untouched because of that overbudgeting. Unrestricted funds such as the rainy day fund were over a state legal limit of 4 percent of overall expenditures.

Most of the overbudgeting was found in employee benefits, teachers’ salaries and plant operations, according to the comptroller’s office.

“Budgeting practices that continually overestimate appropriations result in the accumulation and retention of excessive funds, which makes the tax levies higher than necessary,” the state wrote in its report.

But the district, in its letter to the comptroller’s office, pointed to its “excellent financial condition,” including an Aa1 credit rating from Moody’s. District officials said they budget conservatively to account for “uncontrollable elements” and fluctuating costs.

The district’s letter also said the district disagrees with the comptroller’s assessment that it exceeded the 4 percent cap on the unrestricted fund balance. District officials said the state combined two fund balances, which “distorts and exaggerates” the figure.

The state also said the district did not have the proper documentation for two of its four reserve funds, and three of the four reserves appear to be over-funded.

The district said the reserves are at appropriate levels, but it will revise and re-establish the reserves that lacked documentation.


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