Purpose of Budget Review

The purpose of our budget review was to provide an independent evaluation of the District’s proposed budget for the 2015-16 fiscal year.

Background

The Cortland Enlarged City School District, located in Cortland County, has a tentative budget for fiscal year 2015-16 of approximately $49.6 million.

Key Findings

• The District’s has overestimated appropriations for payroll, health insurance, retirement, debt and utilities by $3.2 million.
• The District’s budget includes the use of $2 million from the retirement contribution reserve fund; however, estimated retirement costs are approximately $760,000. Using the remaining $1.2 million to fund other District expenditures is not an appropriate use of the reserve.
• After the District’s planned use of $500,000 in fund balance, the remaining unassigned fund balance is only $200,000 or 0.4 percent of the ensuing year’s appropriations.
• The District’s preliminary budget complies with the tax levy limit.

Key Recommendations

• Develop appropriation budgets that are reasonable and based on prior years’ actual amounts with appropriate increases.
• Restrict the use reserve funds to legally appropriate financing sources.
• Examine the use of fund balance and reserve funds as recurring financing sources and consider reduction in appropriations or increasing other sources of revenue.