The Office of the New York State Comptroller conducted an audit to determine whether the Brockport Central School District (District) Board of Education (Board) and District officials effectively managed fund balance and reserves. (2023M-107). The comptroller’s key findings and recommendations are printed below.
Key Findings
The Board and District officials were not transparent with taxpayers and did not effectively manage fund balance and reserves. From the 2017-18 through 2021- 22 fiscal years:
•The approved budgets made it appear as though the Board needed to appropriate fund balance and reserves and increase real property taxes by 13 percent to close projected budget gaps. However, the District incurred operating surpluses in each of those five years, totaling $20.9 million.
•The Board overestimated appropriations by more than $30 million (8 percent) and underestimated revenues by a total of $8.7 million (4 percent).
•Five reserves had unreasonably high balances totaling $24.5 million that were not needed or used in many years, and the debt reserve in the debt service fund had $700,000 in unidentified money that should be returned to the general fund.
•The District did not have comprehensive written reserve reports or plans, or written multiyear financial and capital plans, inhibiting effective financial management.
Key Recommendations
•Adopt budgets that include reasonable estimates and reduce overfunded reserves.
•Provide an adequate annual reserve report and adopt written multiyear financial and capital plans.
District officials generally agreed with the recommendations and indicated they will take corrective action.
The complete audit report along with the District’s formal response can be found at htps://bcs1.org/Page/1278.
Provided information
Brockport Superintendent addresses audit findings
You may be aware that our District was recently audited by the New York State Comptroller. The comptroller regularly conducts audits of school districts. While not every district audit has the same focus areas, our audit focus area contains similar findings and language as other districts across New York State.
First, it is important to clarify that some news agencies inaccurately summarized the audit findings using phrases such as, “hid money” or “pocketing a surplus.” At no time did our District hide money or pocket a surplus. Furthermore, all school districts in New York State are required annually to report detailed financial information in multiple formats throughout the year. Brockport complies with required reporting and at no time did any New York State agency ever respond with any concerns.
Our official audit response underscores our commitment to a conservative budgeting approach, a strategy aimed at ensuring fiscal responsibility towards our taxpayers while safeguarding against fiscally driven staff reductions, program cuts, or an inability to maintain and enhance our facilities. Over the past 17 budget years, there has been an average levy increase of 1.97 percent, with two years (2010-11 and 2016-17) experiencing no tax levy increase.
It is important to note that the audit did not acknowledge the financial challenges posed by the COVID-19 pandemic. During the 2020-2021 school year, New York State school districts were required to strategically plan for an anticipated 20 percent reduction of state aid. This coupled with unexpected, significant one-time federal funding received during the pandemic was a crucial factor that influenced our financial landscape. Similar to numerous other school districts, the budgetary complexities arising from unfilled staff positions, encompassing both teaching and non-teaching roles due to this unique event, were and continue to be challenging.
In addition to the pandemic financial challenges, the New York State school district foundation aid controversy has contributed to aid predictions being tumultuously uncertain over the past several years. This past spring, it became clear that we fiscally navigated the pandemic uncertainties in a manner that supported addressing some of our District’s growth areas. These areas include but are not limited to the following:
•Provided school supplies for all students in grades PK-12.
•Added back building based subs to offset sub shortages.
•Increased staff in Grades PK-5 to lower class size.
•Provided free meals for all students in grades PK-12.
•Purchased teacher selected ELA instructional materials in grades PK-8.
•Implemented 5 Full-Day Pre-K classes.
•Expanded our Pre-K program through increased community partners from 4 to 6.
•Purchased teacher selected Math instructional materials in grades PK-8.
•Implemented salary increases (above and beyond the annual contractual increases) for all employees to address employee retention and hiring challenges.
•Installed interactive display devices in every learning space.
•Added high school classes for students.
•Approved 2021 Capital Improvement Project (with no additional taxpayer impact as a result of using established reserve funds).
•Approved 2023 Capital Improvement Project (with no additional taxpayer impact as a result of using established reserve funds).
This year, our District experienced a significant student enrollment increase for the first time in many years. We believe this increase is a result of the dedication of our entire staff as well as our recent improvements. Not only is this student enrollment increase a point of pride for our District, but it has also stabilized our foundation aid for the upcoming school year.
Prior to the audit, District Administration, the Board of Education and District auditors engaged in discussion on how best to utilize reserves to close a potential $20 million gap in building aid to minimize taxpayer impact on future capital projects. The most challenging future capital improvement work, which is quickly becoming a priority, is our District’s swimming pool. While located at our high school, our District’s swimming pool is utilized for swim instruction in grades 1-12, our athletic teams extracurricular clubs, and our community. Our pool’s current state necessitates replacement at a projected cost exceeding $62 million. The maximum aid from NYSED is $44 million.
As you may know, New York has mandated that by 2027, any new school buses must be zero emissions; and by 2035, the school bus fleet statewide should be all-electric. In addition to the buses costing more than double the cost of our current buses, this transition requires significant construction to provide additional electric power to our transportation facility as well as to each bus for charging. This New York State electric bus requirements comes with a projected cost for our District that exceeds $40 million for buses alone.
Looking ahead, it is imperative that our future budgets continue to prioritize continuous improvement in student programming, adequate staffing, resources, professional development, and competitive salaries for employee retention and hiring.
Thank you for your continued support.
Sean C. Bruno, Superintendent
Brockport Central School District
