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Dec 13, 2017 12:23 PMPublication: The Southampton Press

State Comptroller: Quogue School Failed To Implement Changes To Curb Growing Surplus

Jeffery Ryvicker at the Quogue Elementary School. VALERIE GORDON
Dec 13, 2017 12:23 PM

A recent audit by the state comptroller’s office has concluded that Quogue School officials are continuing to overestimate their expenditures, an overly conservative practice that has overinflated the district’s fund balance to the tune of $2.9 million—nine times more than should be kept in the account to be in compliance with the state-mandated cap.

State law requires that the fund balances of school districts not exceed 4 percent of their total budget for the fiscal year, which runs from July 1 to June 30 for schools. In Quogue’s case, the district is operating on a $8,059,754 budget for the 2017-18 school year, meaning that its fund balance should not exceed $322,390.

The audit marks the second time in four years that Quogue School officials have been criticized by the comptroller’s office for its financial practices, though this time they were also targeted for failing to make corrective changes suggested by the state agency in the wake of the 2013 audit that found similar issues with the overestimation of district expenditures.

Those oversights have caused the district’s fund balance to balloon to $2.9 million, nearly $2.57 million more than it should be to meet the state requirement.

Since 2013, the most recent audit revealed that the district has accrued another $1,183,711 in additional unspent revenue, inflating its fund balance from $1,775,515 four years ago to $2,959,226 this year. In contrast, recommendations made to the district four years earlier—suggestions that were never implemented by the district’s prior administration, according to the comptroller’s most recent report—were designed to bring the district back in compliance with the 4 percent rule.

Furthermore, with the exception of the 2015-16 school year, the district, which educates approximately 110 students and employs 36 people, used “none of the appropriated fund balance to fund the next year’s budget,” while still increasing its appropriations for teaching, central services and special education, according to the audit, released earlier this month.

The report states: “The board and district officials have not implemented corrective action since our last report, in which we found that the district had accumulated unrestricted fund balance that exceeded the statutory limit by 19 percent over the four years.”

Brian Butry, deputy press secretary for the state comptroller’s office, explained in an email on Tuesday that no districts in the state can accrue fund balances that exceed 4 percent of their annual operating budget. He added that school districts were never allowed to sock away an unlimited amount of money for future expenditures.

After being alerted of his district’s poor budgeting practices in 2013, the former superintendent, Richard Benson, said his district intentionally budgeted for surpluses to beef up Quogue’s fund balance, which is often called a “rainy day fund” as it can be tapped to pay for emergency expenses. Mr. Benson, who retired in 2016, also said at the time that the plan moving forward was for the district to lower the tax levy over the next two years—2014 and 2015—though that never occurred, according to the most recent financial audit.

That document also states that new Quogue School Superintendent Jeffery Ryvicker, who is just finishing his first year in the position, had “no explanation for the budget increases and overestimated expenditures.” He also told state auditors that “no one is left of the prior administration,” and that he is working on revising his district’s budgeting process, according to the same report.

“The district recognizes the importance of maintaining proper levels of fund balance,” Mr. Ryvicker said this week. “To look at actual expenditure data is to begin to develop historical data to allow us to more closely realign our expenses.”

Quogue Board of Education President Lauren Battista, who has served on the board in different capacities since 2008, did not immediately return phone calls or emails.

Mr. Ryvicker responded to the state comptroller’s report in November, accepting the findings and proposing a written Corrective Action Plan, or CAP, which the board unanimously approved at Tuesday night’s board meeting. The plan calls for the establishment of two separate reserve funds—a capital reserve and a repair reserve—so the district can transfer most of the surplus money to those accounts and use the money to finance future school projects and repairs, Mr. Ryvicker said on Tuesday.

He added that the amounts earmarked for both funds are currently undetermined and will be part of the budgeting process for the 2018-19 school year.

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Just to get the facts straight:

Ryvicker has been the Superintendent since the end of June, 2016. He finished his first year in June 2017. He just completed his first year and a half now. Richard Benson, the prior Superintendent, and the only member of the "prior Administration" to work on the Budgets, retired in the summer of 2016. Ryvicker prepared the 2017-18 Budget. He was aware of the HUGE Fund Balance, and over Budgeting/Excesses in prior years, but made large purchases in May and ...more
By CherylKrome (1), on Dec 14, 17 12:59 PM
2 members liked this comment
Simple solution is for NYS to not give Quogue another dime till they meet State requirements. Think of all the extra funds other Districts could use! The State should also look into QSD practices of having one person holding multiple, highly paid jobs within the school system.....
By G (342), Southampton on Dec 15, 17 5:33 PM
2 members liked this comment
I hear you Cheryl and G and agree.

Yesterday’s WSJ had a piece—Louisiana State University’s $85 million Lazy River, for “only” a $135 fee increase per student. It went on to say that our “representatives spend money on unnecessary programs and projects all the time, and taxpayers absorb the cost because each item individually seems small.”

Here in Westhampton Beach the Board of Trustees wants to push through $24 million in capital projects: ...more
By st (129), westhampton beach on Dec 17, 17 3:11 PM
1 member liked this comment
The district gets very little state aid. Ryvicker was well aware of the large fund balance when he was first hired by the board. He was also aware that a five year plan was to be put into effect and earmarked for any contractual items or anticipated student expenses along with needed repairs and upgrades. The balance should have been returned to the taxpayers to lower the tax rate, so I don't understand why the budget was increased at all.

By lprosano (1), Center Moriches on Dec 19, 17 10:04 AM
2 members liked this comment