Purpose of Audit

The purpose of our audit was to review the District’s financial condition for the period July 1, 2012 through June 30, 2016.

Background

The Bellmore-Merrick Central High School District is located in the Town of Hempstead in Nassau County. The District, which operates six schools with approximately 5,500 students, is governed by an eight-member Board of Education appointed from the following elementary school districts: Bellmore Union Free School District (UFSD), North Bellmore UFSD, Merrick UFSD, and North Merrick UFSD. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $142.8 million.

Key Findings

• Because the District overestimated expenditures by $21.3 million for the 2012-13 through 2014-15 fiscal years, most of the $17.4 million of appropriated fund balance was not used.
• When adding back unused appropriated fund balance, the District’s unrestricted funds averaged almost 8 percent of the subsequent year’s appropriations, or almost twice the legal limit of 4 percent.
• District officials did not have proper documentation for establishing and using two of the District’s four reserve funds.

Key Recommendations

• Adopt budgets that realistically reflect the District’s operating needs based on historical trends or other identified analyses, and discontinue the practice of appropriating fund balance and reserve funds that are not needed and not used to fund District operations.
• Update the fund balance policy to require compliance with statutory limits.
• Ensure that reserve funds are established by resolution.