TUPPER LAKE – A state audit of the Tupper Lake Central School District financial office found that its record keeping and reporting practices often resulted in late or inaccurate reporting. Based on the audit, the district is already taking action to address this.
The June 25 audit by the state comptroller’s office found that the district failed to keep complete, accurate and timely records of its finances, which the state said led to inefficient management of the district. finances and capital projects, and the school board’s receipt of inaccurate reports.
The district’s primary solution is to share the business office workers with the Franklin-Essex-Hamilton Cooperative Education Services Board of Directors.
“Without reliable accounting records, the ability of the board of directors and other district officials to manage the district’s finances and make sound financial decisions is limited. said the audit.
The audit suggests that the district correct its record keeping practices to make it faster and better coordinated.
“We do not disagree with any of their recommendations” FEH BOCES Deputy Superintendent for District Finance and Operations Dan Bower said. Bower was previously the business administrator of TLCSD, but was transferred to BOCES as part of the district corrective action plan.
The comptroller’s office tries to audit every school district once every five years, and that was Tupper Lake’s time.
Bower said the audit findings did not surprise him.
“It is in fact, I say, good news” said Bower. “No one wants your work to be criticized, but we all have the potential to make things better.”
He said these audits are aimed at improving financial practices. He said it showed everything had been done, but not on time.
The most common finding of the audit was that the reports were not completed in a timely manner.
“Not because no one here was doing their job” said Bower. “We just didn’t have enough people or people in the right place. “
Bower said the district has always spent little on its finance department to save money. This led to delays in financial reporting, and it would catch up with accounting reports over the summers.
The audit also indicated that the school board is not overseeing the functions of the treasurer as it should. With less oversight, it’s more likely that an error will occur or go undetected, the comptroller’s office said. He also said this translates into a delay in state aid payments to the district.
The audit indicates that district officials did not provide support for 12 of 15 of its balance sheet accounts examined. Bower said it’s a “transparency problem” and that the district endeavor to make the completion of these cards a monthly task, so that they can be reviewed by the board of directors.
Remains of capital projects
The audit indicated that the district does not always close capital project accounts when work is done so that unspent money can be used to pay off debts.
“By not closing completed projects and distributing unspent debt proceeds on a timely basis, district officials withheld $ 359,427 in funds that should have been used for debt service payments, which which could have reduced the district’s tax deductions. “ indicates the report.
Bower is sticking to the decision not to use that money to reduce tax levies, saying it protects the taxpayer in the long run.
“It’s a strategy. There is nothing we are trying to hide by doing this ”, he said. “We are more sensitive to (financial) risk. “
The district has consistently met or been below its tax cap increase in recent years, so it said there was no need to reduce the levy.
“We could return everything immediately. It would do good right away. said Bower.
“But this money should come out of one pocket to go to the other pocket”, TLCSD Superintendent Russ Bartlett said, concluding his reflection.
Bower said that instead of spending that money to drastically reduce the levy in a year, it can be saved to reduce the levy on future budgets.
He called it a “Stabilization fund”.
He said part of the district’s plan is to set up a debt service fund.
He plans to need it in the coming years as he believes state support for schools will again be insufficient. State aid to schools was slated to be cut this year, but federal aid related to COVID has helped fill the gap.
The district has committed to 10 capital projects from 2014 to 2020. During this time, the projects have not received individual accounting documents. Part of the district plan is to create individual bank accounts for each new investment project, through which all transactions will be carried out.
The audit says, “The district’s financial situation could be distorted due to inadequate record keeping. “
Bower said the delay in reporting likely could have influenced the district’s sensitivity index. In January, the controller’s office discovered that TLCSD was “Sensitive to budgetary pressures”.
Bower said this is because $ 500,000 reported as an expense should have been recorded as a fund balance. He said that if this had been reported as fund balances, the district might not have received this sensitive note.
Bower said it was good to be on the at-risk list because small school districts are always sensitive and need to be recognized as such.
Implementation of the plan
The audit began in 2018 and looked at documents dating back to 2014. It found that in the year 2019-2020, the district had appropriated $ 19.9 million, had 170 staff and 710 students. registered.
Bartlett said the district got the preliminary audit report last year and then started working on a remedial plan. Some of its solutions have already been put in place.
The solution seems counterintuitive, Bartlett said. The district financial office is actually getting smaller and smaller. But by subcontracting this work to BOCES, he will be able to do more work for a reduced price.
Bartlett said the audit was delayed by the coronavirus pandemic and resignations from the comptroller’s department, but the delay in the audit allowed the district to get a head start on creating and implementing solutions.
The subject of an audit has 90 days to respond to the comptroller’s office, but TLCSD had prepared their response even before the audit was finalized.
The audit said the late reports meant that the district’s independent audits were also delayed.
The district contracts with an independent auditor each year. The district plans to get its papers in order by August so that it can then get an auditor and complete the audit by October.
Bower said he doesn’t necessarily look forward to the controller’s next audit, but believes it will be beneficial.
“Do people like to have a colonoscopy? “ Bower asked. “I don’t think an audit is anything to worry about. … The next time they do an audit, we don’t want them to find the same things.
Bower also said BOCES is working on setting up a sales office in the south for shared services at Saranac Lake.