State comptroller's office: Westbury school district has been stockpiling money
Representatives of school districts including Brentwood, Hempstead, Westbury, Uniondale and Wyandanch join scores of students to appeal to the federal government for more financial assistance on Oct. 23 in Mineola. Credit: Howard Schnapp
Westbury school officials, who recently declared at a public rally that their district was shortchanged by the state's funding formula, have been rapped by Albany for stockpiling millions of dollars in reserves beyond the limit allowed by state law.
A new audit report, issued by the state comptroller’s office, found that Westbury consistently overestimated appropriations by as much as $9.5 million per year over a four-year period — in effect, accumulating money that was never spent.
As a result, Westbury’s unrestricted reserves — that is, “rainy day” funds that can be spent at the discretion of local officials — ranged from more than 9 percent of its annual budget to almost 11 percent, auditors said. The state’s statutory limit is 4 percent. The state's calculations would mean that Westbury's unrestricted reserves topped $12 million during the period reviewed.
“By maintaining reserves that are overfunded, the board has withheld funds from productive use, unnecessarily levied taxes and reduced district financial transparency,” stated the report issued Oct. 19.
The comptroller's agency can recommend improvements in schools' financial procedures, and districts are supposed to report back with steps toward compliance. However, the agency cannot penalize districts for noncompliance.
On Oct. 23, Westbury school officials joined colleagues from five other districts at a rally in Mineola, where they demanded more financial support from the state. The coalition of districts, where most students are economically disadvantaged, contend Albany never lived up to a pledge made in 2007 to provide such school systems with adequate money.
Eudes Budhai, Westbury’s superintendent, raised the same issue in a letter responding to the comptroller's audit. The letter said Westbury receives slightly more than $36.3 million a year in "foundation" aid — the primary source of state assistance — but would receive more than double that amount if the distribution plan envisioned in 2007 had been carried out.
“In conclusion, we encourage the comptroller, as an influential leader, to advocate for some key actions in New York State that would help school districts overcome the tremendous challenges we face in the short-term future," Budhai wrote.
Budhai also noted his district was one of four in Nassau that did not raise its tax levy in 2018-19.
Westbury enrolls 5,500 students, of whom about 85 percent are economically disadvantaged, according to state figures. Nassau County's average is 31 percent.
Westbury budgeted $145 million for 2017-18, according to the state report.
District cash surpluses are a hotly disputed issue on Long Island, where both school spending and taxes rank among the highest in the nation. Results of a Newsday review, published in August, found that combined reserves for 121 districts across Nassau and Suffolk counties grew more than 80 percent during the past 10 years, from $1.33 billion in 2007-08 to almost $2.44 billion in 2017-18.
Westbury is the 31st district on Long Island to be criticized by the state since January 2014 for maintaining excessive cash reserves, known as fund balances.
Local school authorities often characterize such criticism as unfair, in light of the fact that the state since 2012-13 has imposed cap restrictions on property taxation that limit their ability to raise revenue. Local officials contend such restrictions increase their need to build up reserves as a hedge against future economic downturns.
The comptroller's office, which serves as a watchdog agency, periodically audits the financial operations of school districts and municipalities to check on various issues, including budgeting practices and fiscal controls.
In Westbury's case, auditors also found that the district did not exert adequate control over employees' overtime payments.
The state monitors, for example, reviewed $391,052 in overtime and double time paid to 10 employees between July 2015 and April 2017, and discovered there was no preapproval of payments totaling $151,643 for work performed on a nonemergency basis. Preapproval was required in such instances, auditors said.
Westbury administrators, in response, said they recently began implementing written procedures for monitoring and enforcing approval of overtime.
John Hildebrand is Newsday's senior education writer and has covered school news and policy issues affecting Long Island for more than 40 years.
