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NYS Comptroller

THOMAS P. DiNAPOLI

Audits of Local Governments and School Districts

Merrick Union Free School District – Financial Condition (2016M-240)


Released: October 7, 2016 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to evaluate the District's financial operations and use of fund balance for the period July 1, 2014 through December 31, 2015.

Background

The Merrick Union Free School District is located in the Town of Hempstead, Nassau County. The District, which operates three schools with approximately 1,480 students, is governed by an elected seven-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $46.9 million.

Key Findings

  • The Board adopted budgets that overestimated expenditures by a total of $9.3 million and underestimated revenues by a total of $2.8 million from July 1, 2012 through June 30, 2015.
  • The District's unrestricted fund balance exceeded the statutory maximum for each of the three years reviewed.
  • Fund balance appropriated by the Board was not used.
  • The district did not use its reserve funds during the audit period but instead used operating funds to pay for related costs.

Key Recommendations

  • Adopt budgets that realistically reflect the District’s operating needs based on historical trends or other identified analysis.
  • Develop a written plan to reduce the level of unrestricted fund balance to legal limits and consider revising the District’s fund balance policy to require compliance.
  • Discontinue the practice of appropriating unexpended surplus funds that are not needed and not used to fund District operations.
  • Ensure that reserve funds are used for their intended purpose.

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