At nearly $30,000, it would have been a costly oversight.
For at least a year and a half, Herricks Union Free School District unwittingly paid thousands of dollars in taxes from which it should have been exempt, a recent audit by the State Comptroller’s office revealed.
In total, Herricks recovered $29,494.78.
Between at least July 2012 and February 2014, the period reviewed in the audit, the two venders selling fuel to the district incorrectly charged Herricks for federal, state and local taxes.
The first vender, which the district used prior to 2013, did not include state and local tax exemptions, the audit says. This resulted in Herricks paying $11,324 more than necessary.
District officials were unaware, and thus did not file for the exemptions.
The second vender incorrectly charged Herricks federal, state and local taxes, which school officials didn’t detect because the invoices showed lump sums rather than itemized lists, according to Herricks Board of Education President Jim Gounaris.
Since discovering the oversight, Guinaris said, Herricks has fired Nawrocki Smith, the auditing firm charged with overseeing its expenses.
“They should have known, as we should have known, we shouldn’t be paying taxes on fuel,” he added. “We thought the auditors should have caught this.”
Going forward, the district has arranged for its fuel vender to remove the appropriate taxes from purchases at the time of invoicing to prevent future mistakes.
Gounaris said he does not believe either vender realized they had incorrectly charged Herricks for fuel.
The state Comptroller’s office audits schools every few years, Gounaris said.
Overall, Herricks received high marks for its financial practices, a point Gounaris emphasized.
“They (the comptroller’s office) looked over all things and found no problems with the Herricks District finances other than the fuel costs,” he said. “We thought this to be a very minor incident. But because we were proactive, we changed to a new auditing company just to make sure there was a new set of eyes on the bill we paid.”
Though it represented only a fraction of Herricks’ $100 million-plus annual school budget, Gounaris said, he recognized the importance of the comptroller’s discovery.
“Thank goodness that they came,” he said.
