Purpose of Audit

The purpose of our audit was to examine the District’s financial conditions for the period July 1, 2014 through February 10, 2016.

Background

The Putnam Valley Central School District is located in the Town of Putnam Valley in Putnam and Westchester Counties. The District, which operates three schools with approximately 1,730 students, is governed by an elected five-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $48 million.

Key Findings

• District officials used surplus funds to increase reserves and the debt service fund each year. However, District officials did not use these restricted funds to pay for reserve and debt service related obligations because the Board budgeted appropriations each year to pay these expenditures. This resulted in surplus fund balance, which exceeded the statutory limit.
• Officials have not established a reserve fund policy stating how much would be set aside in each reserve, how each reserve would be funded or when the reserve funds would be used.
• Officials budgeted for and levied taxes to pay retirement, tax certiorari and liability claim expenditures from the annual operating budget. When these expenditures are budgeted for annually, the reserves appear to be unnecessary.

Key Recommendations

• Develop a plan to use the surplus fund balance in a manner that benefits District residents.
• Establish reserve fund policies that identify a clear intent or plan regarding the purpose, use and replenishment of funds, when appropriate.
• Review reserves to determine if the amounts reserved are justified, necessary and reasonable. To the extent that they are not, reserves should be properly reduced.