With an audit result that was anything but complimentary, Wayne Central School District is answering to the State Comptroller’s Office, State Education Department, and taxpayers.
The results of the NYS Comptroller’s Office Audit of the school district’s financial condition was released last week, with terms like: “fake encumbrances”, “outstanding purchase orders” and “unnecessary fund balances.”
To analyze the district financial practices, the audit was extended from the 2007-2008 fiscal year to April 30th of 2012.
The report stated that the district had a fund balance that exceeded the amount that they (the Comptroller’s Office) deemed appropriate. Five million dollars was held in the district’s fund balance, and about $14 million was distributed to district reserve funds.
The district’s response was that the balance was a necessary and reasonable amount. “By maintaining the fund balance, the Board of Education and the district’s administration have been able to lead the district through the worst financial crisis in State history without cutting services to students.”
They went on: “As auditors focus on short-term management goals, leaders must address long-term objectives. Money in reserve accounts and fund balances have been and will continue to be used to fund anticipated expenses in order to protect the fiscal and academic intergrity of the district.”
The district was adamant about not being labeled as using fraudulent practices. “It is important to note that the audit did not uncover any illegal practices,” the district response noted. “Wayne Central’s reserve funds have allowed the district to weather the storm of a property tax cap, a ceiling on state aid growth and additional cuts in state aid while preserving student programs.”
When the Comptroller’s office was asked if Wayne Central was required to change its practices as a result of the audit, Brian Butry, a spokesman for the office, responded that the Comptroller’s office is not a disciplinary agency. “We are advisory in nature. Ultimately the district will answer to the State Education Department and the taxpayers of the district,” he said.
The audit process is an integral part of providing an objective, independent review of the district’s practices and accountability. The Comptroller’s office recommends policy directions and provides timely and accurate information for decision makers.
At Thursday night’s School Board meeting, the public was not taking the dictrict’s response well.
“You have discredited our School District,” said resident Kathleen Freischlag. She said that the district’s response to fighting the audit, without admitting wrongdoing, undermines the staff and is a bad example to the children. She noted that dishonesty is a bad behavior for the students to witness. Freischlag also was angered by the defiant attitude of the board. “This can cause the budget to be voted down, but also could lead to withdrawal of certification of our school, and could cause the State to withdraw aid.”
Others called for the Superintendent and Financial officers to step down.
“This audit in an embarrassment to our community. It stretches, if not actually breaks the law,” said resident Tim Reynolds.
The requirement of Wayne Central administration and the school board is to respond within 30 days with a position on the audit, so that the response can be included in the final report. Then, within 90 days, they must respond to the State Comptroller, concerning what corrective action was taken, and if they do not implement changes, they need to give the reason why they did not.
It appears, the district will not sit back and take it.
The last paragraph of the District’s response to the Comptroller’s Audit claims: “As expressed throughout the report, the District does not believe that the purpose of the Comptroller’s Audit should be to substitute their judgment for that of the Board of Education and its administration in terms of overall financial management for the District. Thus, while the District respectfully acknowledges the perspectives of the Comptroller’s Office in this regard, it is our view that the District’s work on these matters through long range financial planning, prudent and conservative budgeting practices, and our daily commitment to the mission of our school district, which is to provide a world class education for our students in a cost effective manner for district residents, has resulted in controlling costs for the District’s taxpayers over time, has put the District in a secure financial position for the future, and maintained quality program and student success at competitive costs, all during the most challenging fiscal time in the history of New York State. (signed by all members of the Wayne Central Board of Education: Jeffrey Schultz, Board president, Debra Hibbard, Joyce Luke, Jerry Champagne, Karen Moore, Tom Nicholson, Dom Paz, Matt Prinsen, and Superintendent Renee Garrett, and Gregory Atseff, Assistant Superintendent for Business.
As the school board meeting progressed, public comment continued:
“Conservative planning is good, but be wary,” said resident Susan Brown. “While over 40% of school districts will become insolvent, we are not going to be in that position,” said Brown, commending the board.
Resident Rick Lang, who indicated that he is a financial planner, said that he usually will let the school board handle their own finances, but has felt compelled to speak out now.
“The ends does not justify the means. If I misled my clients or did something without their approval, that would not acceptable or legal.”
Lang was especially angry and dismayed that the district set aside funds in reserve for the “Capital Project”, before it had even been approved, and ultimately was voted down. Putting money aside so that the voters could be told it would not cost them anything, was not truthful. “It would have been better to leave that money in people’s pockets to help them deal with the economical downturn on their own,” stated Lang.
“The district was spending money like drunken sailors. We need to have a good value for our tax dollars, not a “world class education,” just a good one.”
Resident Carla Boerman agreed. “Every person and business has been dealing with financial issues. We could have used that money in our pockets,.” She noted that several times the district was cited by the external auditor Ray Wager for excesses in fund balances and reserves. “You were cited and warned to clean it up, but did not heed the warnings.”
Board vice president Deb Hibbard thanked the crowd for attending and commenting. She noted that sometimes taxpayers don’t like certain strategies. “Sometimes what is good for kids, is not always good for adults.”