State Comptroller Tom DiNapoli's school district audits reveal that many are holding cash reserves in excess of legal limits. It's understandable that school leaders want some money on the side to smooth out financial bumps. But it's illegal to stash away this money, and it takes cash out of the wallets of taxpayers.
Earlier this month, the comptroller chided the Middle Country Central School District for having $12 million above the legal limit. Middle Country, like other schools, is allowed to keep 4 percent of its $200.2-million budget in a "rainy day" fund. Last summer, DiNapoli got after the Levittown school district, which had $15.9 million in excess reserves - even as it was showing a 2-year, $6-million shortfall on its books.
Setting aside how discouraging it is to see Levittown mess up its numbers so badly, these schools need to follow the rules. The legal reserve was recently doubled, from 2 percent in 2006. If schools believe 4 percent is still too low, they should seek another law change. Also, both districts padded their savings by overestimating expenses at the start of the year. Schools play other games with money, too, hiding it in reserve accounts where it becomes stranded and never spent.
Yes, there's a fear that the loss of federal stimulus funds in 2011-12 will send school expenses, and property taxes, through the roof. Schools should prepare by pooling services - not by playing shell games with taxpayers. hN