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Administrators dispute state audit

Starpoint Central School District administrators dispute a state audit's conclusion that the district's financial condition has been "obscured" by its "poor budgeting practices."

Superintendent C. Douglas Whelan said the district is satisfied with the audit.

"There's no improprieties, no money missing. We're hoping they look at Starpoint as a very well-run school district," he said. But he added, "We disagree with some of the things."

The audit by the Office of State Comptroller Thomas P. DiNapoli says the district overstated some liabilities and improperly used reserves, resulting in the accumulation of more than $5 million that could be returned to taxpayers. The district also was not transparent in completing work on its capital project, the audit found.

But the district disagrees.

"We feel we're acting prudently to protect the district," said Jonathan Andrews, director of administrative services.

Proof of that came when the district went to the bond market for its capital project, and its rating had improved two levels, he said. That saved the district $250,000 a year in interest, he added.

Some of the criticism in the audit seems to be over differences in accounting. There is a disagreement on when future liabilities, such as benefits, should be counted. The district booked them June 30, the last day of the fiscal year, and the state said it should be July 1, the first day of the new fiscal year.

"We feel that in a time of high regulations, coupled with the uncertain stability of funding from New York State, the district has acted in a very prudent manner," Whalen wrote in the district's reply.

The audit, which covered the period from July 1, 2007, through Oct. 31, 2011, also said the district could not set aside funds for a potential audit of Medicaid funds.

The district followed state guidelines on its Medicaid reimbursement, the superintendent said. Then it learned the federal government said the guidelines were wrong, and the district could lose up to 75 percent of its federal reimbursement if it underwent a federal audit. The district set up a reserve fund in case it has to pay back the money.

He said if there is no claim, the district will return the funds to the taxpayers.

The audit also criticized the district because some of the items in the capital project were not "sufficiently detailed for the taxpayers to know exactly what work was to be performed."

Andrews responded, "We have a hard time with that comment because there was no lack of transparency in that project. Everything was discussed."

All the construction was approved by the state Department of Education, as well, district officials said.

The district also was faulted for not obtaining formal bids for some purchases, such as microphones and a gym floor.