The Saugerties school district received high marks from an external auditor last month in a report of the district’s financial practices during the 2015-16 school year. School officials budgeted with a greater than 98 percent accuracy, and the district is in good fiscal health.
The external audit, performed by Raymond G. Preusser, CPA, P.C., is an annual undertaking as required by the New York State School Fiscal Accountability Act of 2005.
Superintendent Seth Turner noted the district has many safeguards designed to keep it in good fiscal standing. “External audits are done annually, but we also have an internal auditor come in periodically to review practices, and then we have claims auditing that’s done on a monthly basis in which a separate auditor reviews purchase orders to ensure that the correct practices are going on,” Turner said. “And then you never know when the [state] comptroller’s office might come through to perform an audit, too.”
The external audit is essential in maintaining transparency between the inner workings of the school district and the community it serves, added the superintendent.
“I think it goes back to the concept of Trust But Verify,” he said. “The auditor is really for the benefit of the board of education and the community to ensure that the practices going on in the superintendent’s office and the business office are appropriate. I’m happy to say that during my duration [as superintendent] we’ve continued to have clean audits.”
Preusser found areas in need of improvement, for which district business manager Lissa Jilek will develop a corrective action plan within 90 days.
This year, the primary focus was on updating a policy to include accounting principles established by the Governmental Accounting Standards Board (GASB), a source for generally accepted accounting principles for state and local governments across the country.
Preusser suggested the district bolster some of its reserve accounts. In the report, completed in early September but not discussed at a school board meeting until the following month, Preusser noted that reserve accounts can help a school district ride out periods of economic instability. He advocated fiscal caution.
“At the time these financial statements were prepared and audited, the district was aware of existing circumstances that could significantly affect its financial health in the future,” wrote Preusser. “One challenge facing the district is the state’s economy and its effect on state-aid funding levels. With the downfall of the economy, the state has experienced a significant loss of revenue. As the state continues to experience revenue shortfalls, these shortfalls will be passed onto school district with aid cuts. Although the district did receive a significant increase in state aid for the 2016-17 fiscal year, maintenance of the state aid revenues will become the priority during the 2017-18 budget year.”
The district was in excess of the legal limit of its unassigned fund balance by $659,996. The auditor noted that the district was in the process of establishing additional reserves to help correct the issue.
The audit recommended that the reporting of the accounts of extracurricular activities where money was involved should be tightened. Training of faculty advisors and activity treasurers, which will ensure proper accounting procedures, was already in the works, Turner said.
The next meeting of the school board is scheduled for Tuesday, December 13 at Grant D. Morse Elementary. The meeting will open with a “Meet the Board” session at 6:30 p.m.