The Niagara Falls School District handled its fiscal affairs well last year, although a minor glitch showed up in accounts for extracurricular activities, according to a preliminary draft of the 2003-04 School Board audit.
The audit showed a $1.2 million surplus from the last year's $105.1 million budget, according to Stephen L. Kling of Simpson, Kling, Quarantillo & Frosolone CPAs. Kling last week presented the draft to the board, which is expected to approve the audit at its business meeting Thursday.
The report also showed the school district was able to carry forward $2.2 million in unreserved funds, which include the current surplus along with surpluses accumulated from past years into 2004-05.
That's the maximum amount of money -- 2 percent of the budget -- allowed in unreserved funds under state law, according to the draft. That money can be applied to current expenses if needed, Kling said.
"We are maxed out (in unreserved funds), so the board and administration have done an excellent job managing district money over the past year," Kling said.
The only problem auditors found involved eight clubs or activities that were formed at Niagara Falls High School and Gaskill Middle School last year without obtaining board approval or following required procedures to account for money collected, Kling said.
"Under state guidelines, activities (and clubs) are supposed to be approved by the Board of Education, and they also have to have a charter and a student membership and officers approved in order to become a valid extracurricular activity," Kling said. He noted that school clubs and activities must follow the rules so the district can tell how much money was raised, where it came from and how it was spent.
While there was no wrongdoing involved, an accounting firm official said, "You have to follow appropriate procedures so we can see all documentation. Part of (forming clubs) is to teach (students) proper business controls, and that was not done (in these instances)."
Superintendent Carmen A. Granto said he was not sure whether the organizations were even clubs and may have represented a single activity where a group got together to fund a field trip or some activity, completed the project and then disbanded.
The problem with those groups from an accounting perspective, Kling said, is that they did not follow state guidelines and there was no way to account for the money raised.He also said any group that forms should use a student activity account or an account in the district's central office.
"If they are going to do something with kids, they have to follow the rules," Granto said. "We just have to keep catching it and keep after them. They create it out of necessity and need, but it has to be done right, or it gets us into trouble. We can't have these accounts."