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Are Schools Acting Fraudulently Or Fiscally Responsibly?

Are schools ripping taxpayers off or trying to protect the programs district taxpayers want to see protected?

The answer depends on who you ask. Comptroller DiNapoli would argue Bemus Point took more from taxpayers than it needed. Local school district officials would say they are acting on incomplete budget information when they pass their budgets each year and act conservatively to protect programs taxpayers have said are important.

That is the crux of the latest audit of an area school district’s finances. DiNapoli recently chided the Bemus Point Central School District, which was chastised by the state Comptroller’s Office for “overestimated appropriations” of $3.1 million from the 2016-17 school year through the 2018-19 school year. The same report states the district “improperly restricted more than $260,000 in its trust and agency fund.” Furthermore, the state comptroller said the district exceeded the statutory surplus fund balance limit by $74,000 as of June 30, 2019. District officials said Bemus Point also saw $2.5 million shortfalls in revenue during the same period that made budgeting difficult and said in response to the audit that the district has decreased its percentage of fund balance from 4.8% to the 4.5% prescribed in state law.

Statutory limits for school district reserves are important. No one should want to see schools with huge reserves, particularly in a state already burdened with high taxes at nearly all levels of government. No one should be asking taxpayers for more money than needed. At the same time, it’s hard to be too upset with school districts — particularly a district like Bemus Point that continuously performs well in academic rankings — for carrying as much money in reserve as possible so that the district doesn’t have to cut programs when the state is unable to send as much money as it had in the past. Take this year as an example. As district officials are building their budget proposal, Gov. Andrew Cuomo has proposed a 1.4% increase in state aid for Bemus Point this year. In past years it was almost a given that districts would see that aid go up when the state Legislature began tinkering with Cuomo’s budget proposal. That may not be the case this year as the state wrangles with a $6.1 billion budget deficit largely caused by overruns in the state’s Medicaid program.

Superintendents, school board members and business officials in schools from Bemus Point to Westfield remember what happened to state education aid during the 2007-08 recession. Those bad memories are becoming reality again as the state deals with a self-inflicted deficit this year. Is it any wonder, then, that seemingly every school district audited by the state Comptroller’s Office is being criticized for overstating revenues and trying to keep as much fund balance as school districts are legally allowed to carry?

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