TICONDEROGA — State auditors say Ticonderoga Central School District needs a multi-year financial plan to avoid future budget shortfalls.
The district already has a long-range fiscal plan, and they’re following it, Superintendent John McDonald Jr. said in response.
That protocol was developed following the auditor’s visit but before the release of the audit report.
“What we did is we developed a three-year scenario based on very conservative revenue and very conservative spending,” the superintendent told the Press-Republican.
“We went high on expenses and low on revenue, and it looks like we’ll be in very good shape going forward.”
The audit report just released by the State Comptroller’s Office acknowledged Ticonderoga has had severe financial problems in recent years.
“The district has struggled with fiscal challenges due to a deteriorating financial condition,” the audit report said.
“We found that the (school) board adopted budgets that limited costs and tax increases by reducing administrative and instructional positions in response to the district’s decreasing enrollment, negotiating salary freezes with faculty and support staff and adopting a different medical insurance plan that reduced rate increases.”
Ticonderoga School District went from 953 students in 2008-09 to 875 for 2012-13. Teaching staff was reduced from 91 to 77.
The district had a $17.8 million budget for 2012-13, with a $10.3 million tax levy.
“The adopted 2012-13 budget was about $1.1 million less than the adopted budget for 2011-12,” the audit said.
“It also included a tax levy that was more than $400,000 under the district’s property tax (state) cap limit. The district cannot reasonably continue to develop balanced budgets in this manner without a multi-year financial plan.”
Besides the recommendation for the financial plan, the audit made two other recommendations: that the School Board ensure that future budgets are structurally balanced and that it closely monitor financial operations to establish and maintain financial stability.
They’re doing all those things, McDonald said.
“We’re going to tweak some things, and there are no problems at all. They said, ‘Keep doing what you’re doing.’”
He said the state auditor was very good to work with and gave them excellent fiscal advice.
“They were very complimentary on some of our internal controls. They said some good things (about district operations), but it didn’t make it into the report.”
The report said the long-range plan should consider many factors.
“District officials should formulate a plan that takes into consideration projected enrollment trends, current economic conditions, the recent trend of reductions in state aid and the impact of the new property-tax-cap law on revenue projections.
“Further, the increases in employee salary and benefit costs, including medical insurance and required contributions to the retirement systems, must be addressed in the plan.”
The School Board must also evaluate the establishment and future use of reserve monies, the audit said.
The district’s 2011-12 fund balance from the previous year was only $384,000.
“Trends in student population changes should be analyzed, and the future impact on programs should be anticipated,” the audit advised.
“A well-designed plan can assist the board in making timely and informed decisions about the district’s programs and operations.”
McDonald said the multi-year financial plan was developed for use starting with the 2013-14 school year and is part of business office’s duties, with oversight from the School Board and superintendent.
Email Lohr McKinstry:firstname.lastname@example.org