FORT PLAIN - The Fort Plain Central School District did not adequately use excess surplus fund balance, according to an audit, and raised property taxes beyond what was necessary.
In a report released Friday, the New York state Comptroller's Office said an audit covering from July 1, 2007, until Jan. 31, 2012, revealed the district's school board did not use the money as sources for funds. Because of this, the report said, the board levied more real property taxes than necessary, and retained more unused surplus fund balance than the law allows.
The report said to try and reduce the fund balance, district officials moved excess funds into the retirement contribution reserve and an unemployment insurance reserve.
"District officials have neither used the money in the reserves, nor do they have a formal plan to use it," the summary said.
The Comptroller's Office made a list of recommendations, which included developing realistic expenditure and fund balance estimates for the annual budget and developing a plan for the use of the surplus in the fund balance in a matter that benefits district taxpayers.
Douglas C. Burton, superintendent of the school district, said the district will solve these problems by utilizing the funds to ease tax payments and to tighten estimates for expenditures when proposing budgets. Also, he said, the capital reserve will be increased.
The following shows the total dollar amount of unexpended surplus funds the Fort Plain Central?School District had in some recent budget years, along with the amount that was over the limit allowed by law. The information is from an audit done by the New York?State Comptroller's Office.
In the 2007-08 school year, there was about $1.39 million in unexpended surplus funds, $696,015 over the limit.
In 2008-09, about $1.22 in surplus, $523,477 over the limit.
In 2009-10, about $1.08 million in surplus, $340,423 over.
In 2010-11, $937,291 in surplus, $211,291 over.
According to the report, the fund balance represents money leftover from prior fiscal years that can be assigned as a funding source in the budget or retained as unassigned. The law only allows a district to retain up to 4 percent of the ensuing year's budget as unassigned fund balance.
The audit said while the board took steps to reduce unexpended surplus funds by appropriating some of the money, the amounts appropriated during the period the audit covered were not used in full, if at all.
In 2008-09, the district appropriated $185,000 towards that fiscal year's budget. However, the audit said, the district ended the year with an operating surplus, increasing the fund balance by almost $500,000.
A similar situation occurred in the 2011-12 budget year, with a final surplus of $500,000, despite appropriations of $750,000 in unexpended surplus funds.
"This practice of appropriating unexpended surplus funds that are not actually used to finance operations is, in effect, a reservation of fund balance that circumvents the statutory limit for unexpended surplus funds, and may have caused the district to levy more real property taxes than needed," the audit said.
Burton said the surpluses were caused by increases in revenue and decreases in expenditures from the general fund.
Those lower expenditures included savings on snow removal, including lower overtime salaries for snow crews, less fuel usage, and lower costs for fuel. The cost of heating also was smaller than projected due to a drop in price and lower usage.
Other savings came from streamlining the district's transportation department, he said. The district also reported revenue stemming from the sale of buses that raised more than $50,000 and refunds from BOCES that were double previous years.