Monday, February 15, 2010

Comptroller: NY Schools "Unnecessarily" Holding $615 Million In Reserve Funds

 
State law won't allow funds to be used for other purposes during times of budget crisis.

STORY

SCATS ~~  How many millions of dollars does Greece have in its various "rainy day" accounts? Well, it's definitely raining, but I guess it's not the right kind of rain!

12 comments:

Charlie Hubbard said...

I have suggested some time ago that at budget time the amount of money in EVERY reserve and or slush fund - last year and this year.
The taxpayers have every right to know - WHY? - because it's THEIR money.

Anonymous said...

Just finished glancing through the Comptroller's report on line. The Comptroller's report telling us that school districts are holding millions in reserve funds comes as no shock to me. School districts have for years over estimated expenses and underestimated revenues. While some in the school finance world would have us believe this is sound budgeting practice, it is not when it goes on year after year after year. It is the way school districts hide money to pay for union contracts that we can no longer afford. They raise our taxes when it is not necessary to do so. And as the Comptroller's report acuratley points out, school board members have little to no experience in finances and contract negotiations.

The Appeal of Kackmeister forced the Greece School District to stop using some reserve funds as revolving checking accounts. The district illegally funneled in excess of $30 million dollars though these reserve funds. What this money was spend on we will never know because the school board refused to conduct an independent audit of these reserve funds. The Appeal of Kackmeister was a landmark decision by the Commissioner of Education. Unfortunatly, school districts have found ways around this by establishing other reserve funds and stashing millions away BEFORE they have to approve the annual tax levy.

The public school system in New York is broken both financially and educationally. The system no longer exists for the very children is it supposed to serve. It exists to serve all the adults who feed off the public trough while taxpayers pay through the nose.

Anne Miller
Former Greece School Board Member.

Anonymous said...

Actually, It is probably good there is a small (compared to the overal budget) reserve or OUR taxes would go up 15% rather than 10%.

Anonymous said...

Landmark decision. Get over yourself, Anne.

Anonymous said...

To 6:36PM..........it was a landmark decision by the Commissioner of Education. This decision reverberated all over the state and New York State School Board Association and the legal community had to conduct classes and seminars for school boards, Superintendents and finance directors to make sure they were following this decision.

You may not like me, but the decision is what the decision is. You must not have been around when everyone in the educational and legal community was talking about this. It did change, in a very large way, how school districts conduct business when it comes to reserve funds.

Anne Miller

SCATS said...

To 6:36PM ~~ Since you have already been appropriately chastised for your misdirected comment I won't be deleting it. It never ceases to amaze me that people prefer to shoot the message instead of hearing the problem. Greece loves to repeat history I guess.

On the issue of reserve funds, I'm reminded (by email) that:
The district is fully compliant with the law(s) governing reserves. Reserves are not exorbitant, total approx $20M, and are fully discussed and disclosed at several points during the year in PUBLIC. Any citizen wishing to really know or CARE about this can get the info easily. ...

Each reserve has a stated purpose. The amount contained in the reserve (with one exception) is not overfunded.

The exception is the "unappropriated fund balance". By law, the fund can not contain more than 4% of the approved budget. For GCSD that would amount to $7.8M. The fund currently contains about 2.2% or $4.6M ... This fund is a "rainy day fund" and exists to be available for unanticipated expenditures. For example, a special ed student could move into the district requiring special assistance. That assistance could cost over $100K for that student alone, a rather large expenditure that was not budgeted for.

Our external auditors have reviewed our reserve accounts and are satisfied with the district's handling of same. In fact they believe we need to INCREASE our reserves!

The Capital Reserve and the Bus Purchase Reserve require voter approval to establish AND voter approval before money is expended from those accounts. These reserves can not be spent for any purpose for which they were not established. The reserves can not exceed the values established by voter approval.

SCATS said...

Make that "shoot the messenger" ;)

Anonymous said...

Gee SCATS we must have hit a nerve with the district for them to reply to you via e-mail regarding their reserve funds.

The issue I have with "reserve" funds is that districts tend to shove money into them BEFORE they levy the taxes in August. Much of this money as the State Comptroller has pointed out is "earmarked" for certain expenditures that in many cases never reach the level of expense that was placed into the "reserve" fund. Thus, school districts (ours included) cannot remove this money to offset budget deficits like we are experiencing today.

It is a shell game played out each year by a vast majority of districts across this state. And the vast majority of school board members have no financial background at all so administration keeps playing the game.

So, the question is.......how much money does Greece have in "reserve" funds that were set up and funded year after year BEFORE the tax levy was established that we cannot touch now to offset our budget woes????

Anne Miller

Anonymous said...

Regarding that email
It used to be that no more than 2% could be in the unappropriated fund balance from one year to carry over. This is not the same as reserve funds some of which are created by board vote as in the Appeal and some purely created by the board under the general municipal law like the employee funds.
They amended the RPTL Real Property Tax Law 1318 from the 2 to 3 and then 4 percent effective in 2009/2010. So we can thank the state legislators for having extra money allowed in to these very specific funds. But those other reserve funds for employees may not have any limit. Does anyone know? And those funds were created by our school board. So we can blame them for tying up our money. Anyway we are in deep trouble.
And does the emailer let us know how many other reserve funds we have for building or transportation and busses or have they timed out? Those are created by a vote of the people. If we have not been vigilant they could have timed out but the administration might have secreted some money in there to save for a rainy day. It is a golden opportunity for them to hide money since we have not been monitoring them.

SCATS said...

To Anne Miller ~~ When it comes to hitting nerves in GCSD, my aim is spot on! :) I've often considered sending each BOE member & the Supt. a supply of Prep H. The only reason I didn't is most of them can't figure out where to place it. I don't want any accidental poisonings on my conscience.

Anonymous said...

At the risk of opening a real can of worms, how many reserve funds does the state budget have? Are there "rainy day" funds in town, county and state control? Hard to believe that our school boards across the state are so creative that they have invented the only secret hiding spots for taxpayers' money! Anyone looked at the other taxing authorities to make sure they aren't doing exactly the same thing?
This question should not be construed to argue that its OK for the BOE to hide away money. I think it is bad for any group with the right to take money from the people who earn it and hold it under false pretenses. I just want to make sure we are making it uncomfortable for ALL the scoundrels.

SCATS said...

To 8:18PM ~~ As I recall, Dan Maloney complained loudly about the Town of Greece having around $12-13 million "extra" in their coffers last fall. I don't know if it was in a reserve fund or just the general budget, but it was discussed and defended as necessary by Auberger's mouthpieces.