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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Starpoint Central School District – Financial Condition and Capital Project (2011M-293)


Released: May 25, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to determine if the District was appropriately accounting for and properly managing fund balance in accordance with Real Property Tax Law and to ensure that the District properly and transparently used capital project resources for the period July 1, 2007, to October 31, 2011.

Background

The Starpoint Central School District is located in Niagara County. The District is governed by the Board of Education which comprises nine elected members. The District’s budgeted expenditures for the 2011-12 fiscal year are $44.9 million, which are funded primarily with State aid and real property taxes.

Key Findings

  • The District has accumulated more than $5 million that could be used to benefit taxpayers. As of June 30, 2011, the District overstated certain liabilities by $1.6 million, overfunded certain reserves by $1.7 million, and appropriated approximately $1.7 million of fund balance that is not needed. Had these actions not occurred, the District’s unexpended surplus funds would have been $6.7 million at the end of the 2010-11 fiscal year, representing 15 percent of the ensuing year’s appropriations of $44.9 million. Real property taxes could have been lower as the District, pursuant to statute, is limited to no more than 4 percent of the ensuing fiscal year’s appropriations.
  • The District was not transparent in its use of capital project funds and potentially could have spent less on the Excel Capital Project.

Key Recommendations

  • Develop realistic revenue and expenditure estimates for the annual budget, and monitor financial activity to ensure that operations closely mirror the budget. Ensure that liabilities are appropriately accounted for and reported in conformance with generally accepted accounting principles.
  • Reduce the balance in the liability reserve and the EBAL reserve to a reasonable level in accordance with legal restrictions.
  • Provide voters specific information on what will be included in a proposed capital project, including quantities, details, and locations where the work will be performed.
  • Approve change orders in accordance with its policy and ensure they only address conditions that could not have been reasonably anticipated during project planning.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email: localgov@osc.state.ny.us
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236