by Tiffany Elliott

Following an in-depth audit, the West Islip School District showed an additional $2-million in its budget, most of which was the result of cost-savings measures throughout the fiscal year and unanticipated revenue sources, according to West Islip Schools superintendent Dr. Beth Virginia Blau. Although the additional funds cannot be applied to this year’s tax rate or used this year in any way because state law prohibits it, the board is discussing how the funds will be used next year.

The surplus was reported by Callaghan Nawrocki, a CPA firm from Melville, which the district hired in 2004 to review the district’s financial policies and procedures and to recommend changes or improvements. Ernest Smith of Callaghan Nawrocki told the board and the public at a meeting in October that some of the funds came from the BOCES line because of the way in which the budget had been adjusted year to year. The surplus does not, in any way, represent a deliberate attempt to hide or misappropriate taxpayer’s money, he said.

"The money is not gone," said Smith, whose firm works for 40 school districts. "It was not taken or misused."

The West Islip School District has a budget of approximately $81 million and came within $300,000 of its estimate at the close of its fiscal year in June, 2005. In addition, funding in the BOCES line was carried over from one year to the next and should not have been, said school officials in explaining that revenue.

Added to that was an additional $918,000 in revenue the district did not anticipate from such things as a higher-than-projected state aid package and grants. In addition, the district undertook cost savings measures throughout the year, such as refinancing its bonds at a lower interest rate, which will save the district $2.2 million over he next 16 years.

The additional funds in the budget came as no surprise of newly elected school board member Barbara Heine who told the board and the public repeatedly during her campaign last spring that she believed the budget was inflated, the school board was not taking the matter seriously enough and appeared unaware of just how much money was available.

At that time, both School Board President Susan Lipman and Trustee George Smith said that the budget was "a work in progress," and that part of the financial responsibilities of the board is to move funding from one line in the budget to another, as the need arises.

"Even if the money isn’t gone, programs or teachers are gone and the students missed out," said Heine who reviewed the district’s financial records. "I had to fight for every piece of paper that was given to me. We could have paid less in taxes and had more of the things our kids want."

Blau countered, however, that it would have been irresponsible for the school board to budget for programs or services based on unreliable revenue sources.

"We came within $300,000 of an $81 million budget, which we believe shows just how careful and responsible the board is with taxpayers’ money," said Blau.

Heine said she agreed with the superintendent that it would be irresponsible to commit the district to programs and services without a sure financial source, but added that "had the board had its pulse on the district’s finances," it should have known at the time the 2005-06 budget was being drawn up that the money was there.

"This is not a one-year anomaly," she said. "To me it’s hoarding money and that’s not right."

"The Board was aware money was there...," said School Board member Thomas Pastore, referring to the money in the BOCES line. "What we learned from the from the (audit) process was that the money should not have been carried over."

Why it was carried over and why the district was unaware the money was available, was not made clear. Part of the problem is that the district has a new superintendent for business, Wendy Duffy, who replaced Joan Niles this year, and Niles was not available to explain why she had documented the funding the way she did.

Heine said that while she agrees part of the surplus is the result of the difference between projected and actual encumbrances, that it’s the board members’ responsibilities to monitor those lines throughout the year.

"If they (board members) had looked at the numbers monthly, this wouldn’t have happened," said Heine, who has a business background. "They (the board) are responsible for running an $81 million budget. That’s the budget of a large company...they should all know how to read these documents."

"Our board members are completely capable of reading financial statements and understanding reports," said Pastore who declined to comment further on Heine’s comments, adding only that her statements should have been made at a board meeting, rather than to a newspaper reporter.

As a result of the Roslyn School District scandal, and other similar cases throughout the state, New York State Comptroller Alan Hevesi announced some major changes in the way school districts monitor and report on their finances. He has also asked that all school board members statewide educate themselves about budgets and financial practices to ensure a continuous and informed oversight of school spending. In addition, the state now provides financial training to all school board members.

Blau said that some of the West Islip board members have already gone through the six-hour training course held at Eastern Suffolk BOCES and that they are constantly updating themselves about financial issues and budgets.

"We are proud of the results of the internal control and external audit, which, in both cases noted no material weakness, and that West Islip’s controls are adequate," said the Board’s president George Smith.

Although residents were comfortable with the facts that no criminal or deliberate attempt was made by the board to hide or misuse taxpayer money, they questioned whether programs could have been saved if the money had been found sooner as Heine suggested.

"Do I get money back now? I feel like we’ve been screwed," said one angry parent at a recent school board meeting who declined to give his name.

The resident was referring to the fact that the district cut Junior Varsity 9th grade sports out of the budget this year, and parents raised $65,000 to have them reinstated.

"Just because we found additional money doesn’t mean if we had it originally we would not have cut those programs," said Dr. Blau. "The board made a conscious decision (to cut the them)."

West Islip, however, was not the only district to find a surplus this year. North Babylon and Amityville also found more than $2-million following their audits.

In Amityville, some of the money was the result of having received unanticipated revenues such as tuition charges to New York City Public Schools. In addition, prior to this year, the state permitted additional funds identified after the end of the fiscal year in June and before the district sets its tax levy in the fall, to be included in this year’s budget. Generally those monies would be put into line items for reserves for such areas an unemployment insurance or compensation.

"In fact, local superintendents have done a good job in cutting costs throughout the year, which has largely resulted in these surpluses," said Amityville School Superintendent Dr. Brian DeSorbe. "What this really means is that we have been watching taxpayers' dollars not only at the time the budget is put together, but throughout the fiscal year and that is what residents should realize."

Although West Islip’s money is not slated for return to taxpayers this year, the board will discuss how the money will be applied next year, and whether it can be used for capital improvements such as purchasing new bleachers, making field refurbishment installing new boilers. Simply using it to offset taxes would result in a dip in the school tax rate next year, but would, point out school officials, require that the funding be made up the following year.

The audit made several recommendations in the district's financial polices, including putting in a non-hackable database server. Other recommendations suggested:

•adding an auditing committee;

•ensuring that purchase orders and bills not be approved without backup documentation;

•establishing additional controls on how checks are written, cash is disbursed and payroll is controlled.

School officials said that many of the auditor’s recommendations have already been implemented.

"On a scale from one to ten, I give West Islip a six that could easily become and eight, with minor tweaking," said Smith adding that he does not know of a district who has scored a ten according to the criteria he uses. "Your district is way ahead of the plan though," he added.

In addition to the internal control audit, the district is awaiting a presentation on its annual financial audit, which all school districts undergo.