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Purpose of Budget Review

The purpose of our budget review was to provide an independent evaluation of the adopted 2017-18 and 2018-19 budgets, and the proposed 2019-20 budget.

Background

The Wyandanch Union Free School District, located in Suffolk County, adopted budgets of $68.8 million in 2017-18 and $71.3 million in 2018-19, and proposed a budget of $78.2 million for 2019-20.

Key Findings

• Significant estimated revenues and budgeted expenditures in the $68.8 million adopted 2017-18 budget were not reasonable. The District’s audited financial statements for the period ending June 30, 2018 indicate that expenditures exceeded revenues by $3.4 million (5 percent). Variances were largely due to overestimated State aid ($1.6 million or 4 percent), outside services ($2.4 million or 26 percent) and health insurance benefits ($481,944 or 6 percent).
• Significant estimated revenues and budgeted expenditures in the $71.3 million adopted budget for the 2018-19 fiscal year are not reasonable. The District now anticipates an operating deficit of $3.97 million. Variances will be largely due to overestimated State aid ($733,166 or 2 percent), outside services ($1.1 million or 12 percent) and health insurance benefits ($1.9 million or 23 percent).
• We found that the significant expenditure projections in the proposed 2019-20 budget are reasonable. However, the $47.1 million estimated revenues and $22 million property tax levy are insufficient to finance the $78.2 million in expenditures.
• Adopting a $78.2 million budget would require the District to exceed the tax cap because it would need to levy an additional $9 million in real property taxes.

Key Recommendations

• Pay careful attention to State aid estimates and other guidance, and make the appropriate changes to the budget and/or tax levy limit calculation.
• Be mindful of the legal requirement to maintain the tax levy increase to no more than the calculated limit, unless at least 60 percent of District residents vote to exceed this statutory limit.