State Audit: Croton-Harmon Has Excess Fund Balance
By Alex Weisler
Though the New York State Comptroller’s office found that the Croton-Harmon Union Free School District has had a budget surplus above the legal maximum for the last four years, the district’s school board president called the excess funds good fiscal policy.
By annually overestimating budget line items like employee health benefits, social security payments, teacher retirement contributions, the Croton-Harmon Board of Education accumulated budget surpluses of about $12.3 million, according to the audit.
The district’s budget expenditures for the 2010-11 and 2011-12 fiscal years, scrutinized in the audit, were $43.86 million.
“More accurate projections for the above expenditures could easily have been calculated by district officials and provided to the board when developing the budget,” the audit reads. “By not using realistic estimates, the board is creating annual operating surpluses, resulting in the accumulation of excessive fund balance.”
School Board President Karen Zevin said taxpayers have been consulted throughout the process and knew they were residing in a district that had a difference of philosophy with state law.
“We didn’t overestimate. This will be our fourth year where we haven’t increased the budget,” Zevin said. “We are not knowingly taking money from the taxpayers. We had this money … and instead of giving it all back in one fell swoop, we said, ‘Look we’ll use it wisely and smartly and we’ll save for that rainy day because that rainy day will come.’ “
Zevin, who said the audit’s findings did not surprise her, said the robust cash reserves allow the district to complete capital projects without bonding.
But that excess cash reserve results in an unfair situation for Croton-Harmon taxpayers, the audit argues. Croton-Harmon serves students in the Village of Croton-on-Hudson, and the towns of Cortlandt and Yorktown.
“Although the district’s tax levy has remained fairly consistent, by overestimating budget expenditures the board is placing a higher tax burden on district taxpayers than is necessary to provide educational services for district students,” the audit reads.
The report states that Croton-Harmon Director of Finance and Administration Diane Chaissan told the auditors “that board members are aware of the excess assigned fund balance and that they believe the four percent limitation is unfair, as other government units (towns, villages, and counties) are not limited as to the amount of unassigned fund balance they may retain.”
Croton-Harmon Superintendent of Schools Edward Fuhrman did not return a request for comment by press time but addressed the budget in a message posted on the school district’s website.
“The tax levy cap formula penalizes a school district that has attempted to limit its debt. Rather than bond for facilities repairs, the Board of Education of the Croton-Harmon School District has used building aid to fund its capital improvements and established a capital reserve fund to insure that out facilities are maintained properly,” Fuhrman wrote in the statement. “However, the tax levy cap formula allows school districts to take exemption for debt they incur. In effect, New York State is penalizing our district for being fiscally prudent.”
In the audit, the comptroller’s office recommended the adoption of “realistic budgets, using actual financial results from prior years to project expenditures.”
But Zevin said the district’s financial policy is transparent and effective.
“Behind closed doors, when we talk to any accountant they say, ‘You are managing your money very well,’ but publicly, they have to find some fault and that’s what I believe has happened,” she said. “We’re being called out on it publicly because no other problem is being found.”
Adam has worked in the local news industry for the past two decades in Westchester County and the broader Hudson Valley. Read more from Adam’s author bio here.