Comptroller DiNapoli

Now that all school district audits mandated by the “5 Point Plan” have been completed, the Office of the State Comptroller on Tuesday issued a report summarizing its findings. Key features of the report include:

1. Details regarding how many school districts failed to sufficiently provide policies and controls OSC believe are necessary for proper financial oversight;
2. The statement that many districts have engaged in budgeting practices that have inappropriately built-up district reserves beyond demonstrable liabilities ($880 million) and therefore, have overtaxed the local community; and
3. Policy recommendations for school districts and policymakers that the Comptroller believes will improve business practices and provide “relief without sacrificing good internal controls.”

NYSASBO recommends that all school business officials read the Comptroller's report.

The policy recommendations are mixed. While recommending additional flexibility through the creation of new reserves (tax stabilization, TRS, bonded indebtedness), the Comptroller also advocates for additional bureaucratic requirements (notice of planned use of reserves and board authorization to increase funding of any reserve). Other recommendations appear to provide greater flexibility regarding operations including establishing a deputy claims auditor, allowing large districts to audit only a sample of claims, increasing the enrollment threshold requiring an internal audit function from 300 to 1000 students, and expanding the use of “back office” functions of BOCES.

The judgment that school districts have built up reserves at the expense of taxpayers is a clear challenge to the professional decisions school business officials, superintendents, and boards have made on behalf of the students and taxpayers in their respective school districts. How do you feel about the Comptroller's report? Do you challenge the Comptroller's assessment that school districts have overfunded reserves? If so, what rationale do you put forward to challenge the claim that districts are willfully shortchanging taxpayers? Please add your comments below. Your input will help shape NYSASBO's response to this report.

Click here for the Comptroller's press release

Click here for the Comptroller's report

After a rough ten days in which the Governor was apparently advised by the Obama administration not to run for governor in 2010, he admitted he didn't want to be governor in the first place, was lampooned (yet again) on Saturday Night Live, and was peppered with tough questions on Meet the Press, Governor Paterson's no-press-allowed meeting with over 100 New York business leaders in Manhattan today must have seemed like a much needed escape.  read more »