ELDRED, NY — The NYS Comptroller’s Office recently released audit findings of the Eldred School District’s financial state, which began with a discussion of how the board should properly manage the district’s financial condition and went on to state its case for how the board failed to do so. 

To see the comptroller's audit review and findings, click here.

The report says that the board and district officials are accountable to district taxpayers for the use of financial resources and for planning and managing financial operations, as well as for managing the school lunch fund’s financial condition. It further states that the board adopted structurally unbalanced budgets and relied on its fund balance to finance recurring expenditures over the past several years, and that district officials did not implement recommendations from the comptroller’s previous audit; nor did they establish a multiyear financial plan.

The two key findings of the audit had been anticipated and were discussed many times over the last several months at school board meetings. The first point of discussion was that the use of the unrestricted fund balance resulted in that fund being completely exhausted as of June 30, 2018. The second was that as of June 30, 2017, the school lunch fund owed the general fund more than $100,000 that it may not be able to pay back.

The report stated that district officials agreed with the auditors’ recommendations and that the district planned to take corrective action. The recommendations were to establish a multiyear financial plan that seeks to fund recurring expenditures with recurring revenues, and to implement cost savings and revenue enhancements for the school lunch fund to be less reliant on the general fund for subsidies and loans.

The audit period is from July 1, 2016, through June 30, 2018, with a look-back to July 1, 2014, to analyze financial trends.

This period covers financial results and budgets that were the responsibility of the prior administration. In late 2017 and early 2018, the former district superintendent and business manager left the district. Two of the current five members, Carol Bliefernich and Amador Laput, served on the school board during the period under audit.

At the most recent school board meeting, Glen Spey resident Debbie Jennings commented that at prior meetings there was continued talk about “busting the tax cap” and that evening there was talk about funding a generator, possibly, by floating a bond. She asked whether taxpayers should expect that the board would recommend the tax cap be busted and a bond be floated.

School board president Bliefernich responded that such a conclusion was premature, that the board is looking at possibilities and that as a board, they have not had any of that discussion yet and are not ready to bring this to the public. Further, she stated, “Can we say that we’re looking at a bond and busting the cap? We need to look into both of these things and hear a lot from [district treasurer Caleb Russell] before we’re ready to suggest anything.”

This statement seems to contradict the written response that was included in the audit report.  The undated letter from Superintendent Dr. John Morgano states that “for 2019-2020 we plan to exceed the 2% cap and increase our revenue going forward by changing the tax base from that point forward. For 2020-2021, we plan to replace a bond that will be paid off, thus having a positive impact on our 2% cap and our being able to fund expenses such as a new roof for the elementary [school]. We are also looking to fund a generator for the high school since power losses are increasing in frequency. For 2021-2022 we will be looking at our demographics from the past several years and the accuracy of the demographic study we conducted in year one to see what our building needs are. Do we need two school buildings?”

"Do we need two school buildings?”

The response also addresses changes made and being examined in regards to the school lunch program. The letter indicates that by 2022-2023 the financial concerns should have been adequately addressed to positively impact the financial situation. The letter cites the savings in salary and benefits resulting from the elimination of nine positions, necessitated by the then-current staffing level to serve 750 rather than the current student population of about 550.

Higher taxes are a certainty and, according to the district’s response, will be introduced in the next fiscal year. What remains to be seen is the extent of the increases and when the board will acknowledge that certainty.