The Mineola school district maintained excessive budget surpluses over four years, an audit by the state comptroller’s office has found.
“The Board and District officials did not effectively manage the District’s financial condition,” said the comptroller’s report. “As a result, more taxes were levied than were needed to fund operations.”
The audit, released Sept. 3, was conducted by the office of state Comptroller Thomas DiNapoli and covered the period from July 1, 2016, to June 30, 2020. For that period, it said, the surplus was $20.7 million.
The maximum surplus allowed is 4 percent, but the Mineola school district’s surplus, or appropriated fund balance, reached 13 percent, according to the audit.
The audit said the school board did not adjust the ensuing years’ budgets based on results in the previous years.
Recommendations from the state comptroller’s office included adopting budgets with reasonable estimates based on trends, analysis and other factors.
In response to the audit, School Superintendent Michael Nagler addressed each concern and recommendation presented in the 13-page document, generally agreeing with the findings and suggestions.
The school district’s response said in part, “There are numerous contingencies that can and do result in a tax levy spike. The District believes it is prudent to provide for possible contingencies within the adopted budget in order to protect District operations, and to protect the District taxpayers from unnecessary spikes in tax rates.”
One recommendation was that the district comply with the statutory fund balance limit of 4 percent. The state suggested using surplus funds to benefit taxpayers in the form of one-time expenditures, paying off debt and reducing district property taxes.
In response, the district said, “The district will continue to repair and update district facilities with capital transfers.” The statement continues, “The District has continued an aggressive schedule of debt repayment resulting in a 35% reduction and has also incurred savings in excess of $800,000 by leveraging low interest rates to refinance debt obligations.”
Asked for comment, Nagler said in a statement: “Last year the district had a zero levy. For the past 12 years the district averaged a 1.2% levy. Simultaneously, the district transferred money from the fund balance into the budget to achieve capital upgrades. Our community is informed of how the district spends the surplus and has supported our budgets every year with over 70% approval.”
