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State audit critical of Niagara Wheatfield’s use of Greenway funds, turnover in business office

SANBORN – A state audit of a three-year period of the Niagara Wheatfield Central School District was critical of how the district applied Greenway funding and for “significant turnover with the district’s business office staff” that resulted in cash flow problems because of late aid payments.

The audit by the state Comptroller’s Office said that the state Education Department owed the district $6.6 million last June 30 which resulted in the need to borrow money for cash flow purposes. School Superintendent Lynn Fusco told the School Board on Monday that the aid was for the Tuscarora School on the Tuscarora Indian Reservation which the district runs.

According to the findings, the Education Department “attributed the district’s current two-year payment delay to processing the district’s contract renewal” and the staff turnover “which have hindered the process.”

In addition, the Comptroller’s Office reported that “conservative budget estimates, along with a deliberate monitoring of operating results and the timely receipt of state aid, could help improve the district’s financial condition and cash flow position.” It added that the district has implemented better budgeting practices such as tax increases to help improve its financial condition.

In recent years, the district was cited by the Comptroller’s Office as one of a few in the state that was in financial straits. In the audit of 2011-14, the office now recommends that the district closely monitor operating and fund balances to ensure adequate cash flow, and to work more closely with the Education Department to ensure that aid is paid in a timely manner.

Fusco said the delay in state aid has always negatively affected the financial condition of the district and forced the need to borrow.

She said the district response to the audit findings included that 2013-14 ended with a fund balance because of “appropriate budgeting and watchful spending.” The unappropriated unassigned fund balance was increased to the 4 percent maximum allowed by law.

She also noted that the district has been more proactive in maintaining communication with the Native American unit of the Education Department, which helped secure a more timely aid package.

The audit also found that the district received about $2.2 million in Greenway funding on March 5, 2013, and issued a 15-year serial bond three weeks later for $10.6 million to pay for the project. The money was not applied toward the bonded amount of the project, the auditor said.

As a result, it recommended that the Greenway money be used properly by Niagara Wheatfield.

In the response, the district said that the Greenway funds were not able to be allocated to the bond principal because of the timing of the bond issuance during which the business administrator retired.

In a related matter, the district formally approved the proposed school budget of $67,965,701 for 2015-16 which will be put to voters May 19. The budget carries a tax hike of 2.2 percent, the maximum allowed by the state tax cap.