Purpose of Audit

The purpose of our audit was to assess the Board’s oversight and management of the District’s budgets and financial condition for the period July 1, 2012 through June 30, 2013.

Background

The Central Islip Union Free School District is located in Suffolk County. The District is governed by the Board of Education which comprises seven elected members. The District’s expenditures for the 2012-13 fiscal year were $168.5 million.

Key Findings

• District officials underestimated revenues and overestimated expenditures in the Board-adopted budgets for fiscal years 2008-09 through 2012-13, resulting in combined operating surpluses totaling more than $25 million.
• Although the Board appropriated unexpended surplus funds each year (exceeding a combined $13.2 million over the five-year period) to help finance the next years’ operations, District officials actually used less than $5.3 million to fund District operations.
• Additionally, the District’s accumulated unexpended surplus funds exceeded the amount allowed by statute in each of the past three years. While the District’s unexpended surplus exceeded the statutory limit over these years, District officials continued to increase the real property tax levy by more than $6.6 million, a 9 percent increase.

Key Recommendations

• Develop and adopt budgets that include realistic estimates for revenues and expenditures based on all information available at the time the budget is developed.
• Discontinue the practice of adopting budgets that result in the appropriating unexpended surplus funds that will not be used to fund the next year’s operations.
• Ensure that the amount of the District’s unexpended surplus funds complies with the statutory limit.