Dear Superintendent Michael Nagler,

In the wake of the Roslyn School District scandal, the Office of the State Comptroller was statutorily charged to periodically conduct audits of the over 800 public school districts in New York State.

In addition to rooting out fraud, the comptroller’s audits examine whether a district holds excess funds that exceed applicable statutory caps. For example, state law limits the amount of unassigned fund balance, essentially funds remaining at the end of a fiscal year, that a district can maintain.

An excess fund balance directly impacts the tax burden borne by the district’s taxpayers.

In 2021 the Comptroller’s Office released its report on the Mineola Union Free School District which addressed the question of whether district officials effectively managed the district’s financial condition.

Contrary to the board’s letter, and as detailed in the report, the Comptroller’s Office did not take a shortsighted view of the financial conditions but rather conducted a comprehensive analysis of a four-year period. This examination revealed a pattern of over-budgeting with excesses totaling over $20 million. Further, objective reviews revealed nearly $13 million of taxpayer-funded dollars was appropriated to finance operations over the four years that was not needed.

The audit, performed in accordance with generally accepted government auditing standards, not only concluded that the board overestimated appropriations and appropriated fund balance not needed to finance operations, but also exceeded the statutory limit on unassigned fund balance. The board does not challenge the figures utilized by our office or the dictates of state law, either in its response (which was published with the audit report) or in its recent letter, or that the district’s tax levy likely would have gone down if appropriate estimates were utilized and the statutory limit was observed. Rather the board merely states that no monies were misappropriated– a claim not made in the report – and that school districts must follow different rules than towns and villages.

As a result of our examination, the Comptroller’s Office recommended that the district and the Board of Education develop budgets that include reasonable estimates in compliance with the statutory limit. We urge the board and school boards across the state to abide by the law and use appropriate estimates and we will continue to conduct audits and publicly release reports to inform the public of our findings on this topic.

Elliott Auerbach

Deputy Comptroller


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