Pension benefits concern of audit of school district
SCOTIA & GLENVILLE Scotia-Glenville officials received a generally positive audit of the district’s $47 million 2011-2012 budget, but were cautioned about long-term liabilities and use of surplus accounts.
Auditor Jim Amell of Marvin and Company said the district’s finances were largely sound. “The financial statements are fairly stated in accordance with general accepted accounting principals,” he said.
However, Amell pointed out that the Scotia-Glenville Central School District’s expenditures exceeded its revenues by $1.2 million in 2011-2012. Fortunately, general fund expenses were under-budget by about $3 million and total revenue increased by $1.1 million, including $500,000 more in state aid than it had anticipated, according to Amell.
“In the end, it’s fortunate you came out as you did because that allows the revenue to be rolled over into next year’s budget,” he said.
However, school officials are using fund balance — unspent money from previous years — to reduce the tax levy. It tapped about $5.3 million of the surplus to reduce the 2012-2013 tax rate.
“Over half of your fund balance is being used to reduce the tax levy,” Amell said.
The district has about $1.5 million left in its undesignated fund balance. It also has a variety of other funds for specific purposes such as tax assessment challenges and workers compensation.
Amell said there were no issues with how the district handled federal funds. One-third of the federal money coming into the district was as a result of the federal jobs bill funding that was used to avert layoffs.
There were no serious deficiencies, but he did recommend stronger controls over club funds.
And like many school districts, he noted, Scotia-Glenville faces a long-term liability in post-retirement benefits.
The district pays anywhere from 40 percent to 95 percent of the cost of the health insurance premiums for its retirees. Accounting principles require that the total cost of that liability be fully funded, which is not practical for most districts. This adds up to about $85 million in an unfunded liability, according to the audit.
“The only opportunity to fund that liability is paying the current year’s retirees premiums. That doesn’t match the actual liability,” Amell said.