Audit: Mount Sinai schools surplus too large

A state comptroller's audit has concluded that administrators in the Mount Sinai school district amassed surplus funds beyond the state-mandated cap for five years in a row.

"School districts have a responsibility to taxpayers to develop realistic budgets and make adjustments when it is clear budgets are out of line," state Comptroller Thomas DiNapoli said in a statement Wednesday, adding that the district must budget more appropriately.

The audit found that school officials "significantly overestimated spending" and the school board approved the inflated budgets, a pattern that produced surplus funds beyond the 4 percent cap mandated by state law.

The practice yielded surpluses from 6 percent to 14 percent of budgeted appropriations.

District officials defended their ability to manage the budget. The extra money has created a rainy-day fund that helps the district maintain programs and respond to emergencies, officials said.

"Districts that have followed the state mandate and maintained 4 percent are now nearing insolvency," said Enrico Crocetti, superintendent of Mount Sinai schools, adding that the 4 percent margin is too thin to anticipate sharp cuts in funding or emergencies.

The audit, released Wednesday, found that actual expenditures in Mount Sinai were $3.4 million less than budgeted amounts in the 2007-08 academic year, $4.8 million less in the 2008-09 year, $5 million less in 2009-10, $6.2 million less in 2010-11 and $4.1 million less in 2011-12.

Crocetti said the funding cushion is necessary to continue quality in the school district.

"It costs a lot of money to put a program together in a school district with professional development, acquisition of materials, training of staff and managing everything that goes into creating a new program," he said. "When you cut a program it takes a second and that whole investment is wasted."

Crocetti said the district was following DiNapoli's recommendations, which include creating budgets with "realistic estimates for revenues, expenditures and unexpended surplus funds."

A written list of ways the district will follow the state recommendations must be sent to the comptroller's office within 90 days and a "corrective action plan" must be in place by the end of the next fiscal year, according to DiNapoli.