The New Paltz Central School District (NPCSD) received high marks on a recent external audit of the 2022-23 school year.
The audit was conducted by PKF O’Connor Davies, a New York-based accounting company with offices across the east coast of the United States and in India, with the results detailed by Jeffrey Shaver, a partner in the firm, during a meeting of the board of education held on Wednesday, October 18.
PKF O’Connor Davies is new to New Paltz, and Shaver said their relationship was off to a good start.
“This is our first year as auditors (in the district) so we came in kind of with a fresh look,” he said. “We were provided with everything we needed, accounting records were in good shape, no disagreements with management, no instances of fraud were noted or anything like that. So certainly all positive things to report as it relates to the audit.”
Shaver presented a high level summary of an unmodified opinion of the independent auditors’ report, which he also described as a “clean” opinion.
“That’s the most favorable opinion that you can receive,” Shaver said. “And what that means is the numbers and the financial statements and the note disclosures are complete and accurately stated in accordance with accounting principles generally accepted in the United States of America.”
He also presented a report on internal control over financial reporting as required of school districts by New York State.
“In that auditor’s report we would be required to report any material weaknesses in internal controls that we had covered during the course of the audit,” Shaver said. “Happy to report that there were no material weaknesses in your internal control identified.”
A third auditor’s report covers compliance with federal programs.
“Certainly all three auditor opinions were favorable to the district,” Shaver said.
Through a combination of factors, the district’s revenues, and subsequently its fund balance, were higher than anticipated. In the final budget for the 2022-23 school year, the NPCSD anticipated $67,108,265 in revenues; the actual amount was $69,331,385, a difference of over $2.2 million.
“Two items specifically created those variances,” said Shaver.“One was interest income that was about $500,000 greater than the budget. Keep in mind when this budget for 22-23 was adopted, the interest rate environment was near zero, so the anticipated revenue collections were very low, things changed quite rapidly after that, and your district and many other districts and local governments started collecting a lot more additional interest income because of that. And also your State Aid was greater than budget by $1.6 million, and that’s because of the first payment of building aid related to a bond that you issued several years back.”
Also contributing to the surplus was that the district’s expenditures were lower than expected, coming in at $67,586,983 compared to a budgeted figure of $69,762,312, a difference of close to $1.2 million.
As a result, the district’s fund balance rose from $3,003,511 in the 2022-23 final budget to $8,655,419; it currently stands at $9,936,193.
Shaver said the variances were not out of the ordinary, and that fund balances are often used to help bring a spending plan into alignment.
“Keep in mind when the budget is adopted there’s usually a balancing figure where your revenues aren’t meeting your expenditures, so you use some fund balance to balance thebudget,” he said. “Now that number was $1.9 million as it relates to this year’sbudget. So if you had collected every dollar in your budget and spent every dollar in your budget your fund balance would decrease by that amount, and also it would decrease by the amount of encumbrances that you’ve rolled over from the previous year because those were committed in the previous fiscal year, but meant to be spent in this fiscal year. The encumbrances amount was $1.1 million. So when we start off with the budget day one, the district was anticipating a fund balance of $3 million. However you didn’t need to use the $3 million in fund balance because you were able to generate the surplus.”
Shaver also detailed the district’s long-term debt scheduled payments, including a general obligation bond issued at $47,450,000, which currently stands at $38,570,000. The district is expected to pay principal, plus interest, on the bonds totaling around $4 million per year through 2035. Much of this is covered by state building aid.
The district also has over $200,000 in leases, including principal and interest, which will no longer be a burden after 2026.
Dubbed “other funds” is a category of different portions of over $2 million in the district’s fund balance, including a special aid fund of $2,907,258 used entirely for state and federal grants; a school lunch fund, which after expenditures of $1,257,003 remains at $38,426; and a special purpose fund, which Shaver described as a “catchall” fund with a current fund balance of $515,617.
“In that fund is your extra classroom activities, you have some scholarship funds, some I would say relatively decent sized scholarship funds that are in there that you’ve been using to you know give out to students from year to year.”
Trustees voted unanimously to approve the results of the external audit.
Join the family! 
