West Islip schools overestimated expenses by $24.6M, state audit says
The West Islip school district administration building. The state audit, which covered a period from July 2017 to October 2021, also found the district made unbudgeted transfers to its reserve funds. Credit: Morgan Campbell
The West Islip school district overestimated expenses by nearly $25 million over a four-year period and was not transparent about its surplus funds, according to an audit by the state comptroller’s office.
The report, released July 8 by state Comptroller Thomas P. DiNapoli, said the district overestimated costs by a total of $24.6 million, or approximately 5.2% annually on average. The district had surplus funds ranging from 7.2% to 7.9% of the next year's budget, rather than the legal 4%.
The audit, which covered a period from July 2017 to October 2021, also found the district made $17.9 million worth of unbudgeted transfers to its reserve funds.
The district overestimated costs for tuition, services for students with disabilities, health insurance and employee retirement system contributions, the report said. The 2021-2022 budget was $127.5 million, and as of June 30, 2021, the district had $18.7 million in operating surplus and $30.2 million in total reserves.
The report also noted “significant” variances by district officials, who overestimated budgeting for tuition and BOCES services for students with disabilities by 38% — approximately $1.9 million — each year.
State auditors recommended the district "adopt realistic budgets" and use reserves to benefit district residents. Overestimating budgets "resulted in real property tax levies that are higher than necessary,” the audit said, adding that from 2017-2018 through 2020-2021, the district increased the tax levy by approximately $6.2 million.
The audit also noted that the district's workers’ compensation and unemployment insurance reserves were not properly established by resolution and were overfunded.
The workers’ compensation fund had enough money to cover expenses for more than eight years and the unemployment insurance reserves could fund expenses for more than 51 years, but the district paid for the expenses through the last four budgets instead of using funds from the reserves, according to the audit.
The report said the district's assistant superintendent "agreed" the reserves were overfunded, saying the district "budgeted for a potential 20 percent reduction in State aid that did not happen and anticipated the COVID-19 pandemic to result in increased unemployment claims."
District officials "generally agreed with our recommendations and have initiated or indicated they planned to initiate corrective action," the report said.
The district’s 2022-2023 budget of $130.2 million passed in May, with a 2,399-1,001 vote.
The district declined to comment on the findings, but in a June 16 response to the audit, Superintendent Bernadette Burns said the district has "already implemented some of the suggested changes" in the 2022-2023 budget.
For instance, she said, the budget reflects a $1.5 million reduction in special education tuition and BOCES services; a $150,000 reduction in reserves; and will take $250,000 from each reserve to fund unemployment and workers’ compensations expenses.
Brinley Hineman covers the Town of Hempstead and the City of Long Beach for Newsday. She previously was a reporter in Nashville, Tennessee, and is a West Virginia native.
