The Ripley Central School District mismanaged its fund balance and payroll procedures in recent years, according to an audit from the State Comptroller’s Office.

Issued Aug. 13 and publicized Friday by the state, the audit states district officials “overestimated budgetary appropriations and appropriated fund balance, resulting in surplus fund balance exceeding the 4% statutory limit by approximately $1.4 million, or 15 percentage points.”

Also, they “did not develop and adopt a comprehensive written multiyear financial plan and did not adhere to the fund balance policy.”

District Superintendent William Caldwell said Monday, “We have a plan in place to reduce fund balance. We realize 4% is the goal from New York state.” He said that in these tough fiscal times, keeping a higher fund balance is a worthy goal.

Caldwell said fund balance was used to lower taxes over the last two school years, dropping taxes by an average of a dollar per $1,000 of assessed property. The superintendent added that the fund balance money will be used to pay for the local share of a building project, if the district’s voters approve it at a Sept. 22 referendum.

“It won’t be 4% tomorrow. It is a long-range plan,” Caldwell said.

As for the district’s payroll, the state audit says, “While the district’s payroll payments were paid at accurate rates, payroll payments were not always properly supported and approved, and leave time accruals were not always accurate. Further, district officials did not properly monitor the payroll and leave accrual process and they have not developed any payroll policies or procedures.”

Auditors reviewed 41 timecards and found that 30 of them were not signed by a supervisor. None of the cards were signed by employees. Many of the timecards, 25 in all, had missed punches totaling about 250 hours.

Also, adjustments to timecards were not properly reviewed or approved. Finally, the district did not deduct 13 days of approved vacation time from two employees’ leave accrual records.

“People were forgetting to punch out,” Caldwell acknowledged Monday. “I explained (to the auditors) that being such a small school, it would be difficult for someone to leave without anyone noticing.”

He said, “We are absolutely confident in the fact that they were here for their assigned times.” The superintendent said the district has already submitted a corrective action plan to the state. It includes security cameras at the school entrance so there will be footage of when employees enter and exit, and weekly checks by supervisors of time cards for proper punch-outs.

The fund balance section of the audit covered the time period between July 1, 2017, and June 25, 2021. The payroll audit focused on the period between July 1, 2018, and Nov. 5, 2020.

Comptroller’s Office auditors always offer recommendations in their reports. In this case, the district is told to “establish and adopt comprehensive written policies and procedures to guide the payroll and leave accrual process.” It also must “properly monitor the payroll and leave accrual process.”

Regarding the fund balance issue, the district should “adopt budgets that include reasonable estimates for appropriations and the amount of appropriated fund balance that will be used to fund operations.”

It must also “develop and adopt a comprehensive written multiyear financial plan and adhere to the fund balance policy.”

On both the fund balance and payroll issues, the state auditors write that “district officials generally agreed with our findings and indicated they have initiated or will initiate corrective action.”

The Ripley Central School District educates children from pre-kindergarten to sixth grade. Older students go to neighboring school districts, usually Chautauqua Lake, through agreements with the Ripley district.