Purpose of Audit

The purpose of our audit was to review the District’s financial condition for the period July 1, 2014 through December 31, 2015.

Background

The South Huntington Union Free School District is located in the Town of Huntington, Suffolk County. The District, which operates three schools with approximately 6,000 students, is governed by an elected seven-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $156.1 million.

Key Findings

• The Board and District officials overestimated general fund appropriations in the last three adopted budgets, resulting in operating surpluses totaling approximately $10.6 million.
• The District’s unassigned fund balance during these years exceeded the statutory limit.
• District officials designated more than $3 million of unrestricted fund balance for costs related to other post-employment benefits (OPEB) each year but did not use these funds to make related payments.
• Based on projections made by the District’s actuary, the workers’ compensation reserve is overfunded by $1.4 million.

Key Recommendations

• Adopt budgets that represent the District’s actual needs and discontinue the practice of adopting budgets that result in the appropriation of fund balance that will not be used to fund operations.
• Use excess unrestricted fund balance in a manner that benefits District residents.
• Pay for OPEB expenditures using fund balance designated for this purpose.
• Ensure that the workers’ compensation reserve is funded in accordance with actuarial reports.