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Clarence Central kept too much money on hand, audit says

Clarence Central School District kept too much tax money on hand, a state audit said, but district officials are defending their “conservative” budgeting.

The audit covered some of the most fiscally trying times in the district, the period from July 1, 2012 through Feb. 18, 2016.

The budget was defeated on the first vote in 2013, with voters turning down a proposed tax increase of 9.8 percent. A second budget that slashed $2.45 million in spending brought the tax increase to 3.79 percent, just under the tax cap, and brought voter approval. By 2014, the district had reduced staff by 113.

District officials “have not effectively managed fund balance and have allowed unrestricted fund balance to exceed the statutory limit,” said the audit performed by the office of state Comptroller Thomas P. DiNapoli.

The audit said the district over-estimated how much it would spend each year. The result was it had more than the statutory limit in the district “savings” account. The audit also criticized the district for not properly analyzing and managing its cash flow.

The audit recommended the district include realistic appropriations and avoid collecting more taxes than necessary.

“We stand by our conservative budgeting model. It serves us well,” said Business Official Richard J. Mancuso.

In the district’s official response to the audit, Superintendent Geoffrey M. Hicks notes that he district has spent down its excess fund balance, and he attributed the budgeting practices to issues outside its control.

He said post-recession fiscal volatility, the creation of a tax levy cap and the state’s financial problems which led to frozen state aid, contributed to the district’s budgeting practices. And those practices served the district well, he noted.

“Given the financial condition of New York State, there is no guarantee that measures such as freezing foundation aid or reintroducing the Gap Elimination Adjustment will not be enacted in future state budgets,” he wrote.

Hicks and Mancuso noted that two areas singled out for criticism, spending on special education and utilities, are difficult to budget. One special education placement could cost $100,000, and utility costs vary based on the severity of the weather.

“We can’t budget for an average winter,” Mancuso said. “We have to budget for a pretty bad winter.”

Hicks noted in his response letter that the district’s budgeting practices have resulted in one of the highest achieving districts in Western New York.

The district intends to develop a plan for the use of any excess fund balance, and has upgraded its financial software package, which will allow more accurate analysis of its bank accounts, it told the comptroller’s office. The district also plans to advocate with the State Legislature to increase the amount of fund balance districts are allowed to keep.