PORT JERVIS – Port Jervis City School District officials and the Board of Education did not effectively manage the district’s financial condition, and as a result, the district levied more taxes than needed to fund operations, according to an audit by the State Comptroller’s Office.
The review, for the period of July 1, 2020 through April 30, 2022 found the district overestimated general fund appropriations by an average of $5.8 million each year from 2017-2018 through 2020-2021 and appropriated $4.8 million of fund balance that was not used.
The study also found that as of June 30, 2021, the district maintained a recalculated surplus fund balance totaling $23.6 million, exceeding the four percent statutory limit by 26 percentage points or $20.4 million.
The comptroller’s office also projected that the district would generate another operating surplus of approximately $9.3 million in 2021-22 and will not need to use $903,000 in appropriated fund balance.
The audit also said the district unbudgeted year-end transfers to reserves and the capital projects fund totaling $12.8 million and $15.5 million, respectively. As a result, officials did not present the district’s budget or fund balance in a transparent manner.
Recommendations from the state officials included adopting realistic budgets and reducing surplus fund balance to comply with the statutory limit.
The auditors also said the district should budget for the funding of reserves and capital projects rather than rely on unbudgeted transfers of year-end operating surpluses and ensure that designated reserve funds are used to fund related expenditures.
District officials agreed with comptroller’s recommendations and plan to take corrective action.
