Purpose of Audit

The purpose of our audit was to evaluate selected District financial operations for the period July 1, 2011 through March 31, 2013.

Background

The New Suffolk Common School District is located in the Town of Southold, Suffolk County. The District is governed by the Board of Trustees which comprises three elected members. Budgeted expenditures for the 2013-14 fiscal year are $946,175.

Key Findings

• The District retained excessive fund balance, exceeding the permitted statutory limit, in each of the fiscal years 2007-08 through 2011-12 by as much as $228,694. Although the Board President stated the unexpended surplus fund balance was for cash flow purposes, none of the adopted budgets included a planned balance as is permitted by Law. District officials have not properly budgeted for tuition and teacher personnel salaries. District officials also consistently levied more than was needed for budgeted appropriations between the fiscal years of 2007-08 through 2012-13.
• The Board compensated the former Superintendent $28,687 in the 2011-12 fiscal year through vendor disbursements as if he were an independent contractor rather than through payroll. This included an extra $2,167 which was not provided for in his contract.
• The Board does not audit the claims nor do they receive an abstract of claims for approval.

Key Recommendations

• Maintain unexpended surplus funds within the allowed legal limits. Develop a plan to budget for moneys needed that does not increase the tax levy to a rate that is higher than necessary. Develop a plan to use the unexpended surplus fund balance identified in this report in a manner that benefits District taxpayer.
• Ensure that individuals who serve as officers or employees of the District should be compensated through the payroll system. Review the circumstances surrounding the extra $2,167 in compensation to the former Superintendent and attempt to recover it, if appropriate.
• Ensure that all claims are audited and approved before the Treasurer pays the claims. Any claims allowed by law and authorized by Board resolution for the Treasurer to pay prior to audit, need to be subsequently presented to the Board for audit and approval.