NEWBURGH- A state audit has found significant budgeting and financial management issues within the Newburgh Enlarged City School District, citing tens of millions of dollars in discrepancies between what taxpayers were told and the district’s actual financial results.
The report, released by the New York State Comptroller’s Office, examined the district’s finances over five fiscal years and concluded that school officials routinely overestimated spending, underestimated revenues and made large end-of-year transfers that reduced transparency in the budget process.
According to , the district made $67 million in unbudgeted year-end transfers during the period reviewed. Of that amount, $50.6 million was moved into reserve funds. Auditors noted that $8.8 million of those reserve transfers were not approved by the Board of Education before the money was moved.
Auditors found that district officials consistently overestimated general fund appropriations by an average of $4 million per year, which comes to about $20 million total over five years. At the same time, revenues were underestimated in three of the five years by an average of $8.6 million, or roughly $25.7 million combined.
The result was a series of operating surpluses totaling $41.5 million, which increased the district’s surplus general fund balance to approximately $18.1 million as of June 30, 2024.
The audit also found that the Board appropriated $8.6 million in fund balance and reserves that ultimately was not needed because the district realized operating surpluses. In four of the five years reviewed, those appropriated funds were not used to pay for operations.
Auditors said these practices made it appear the district needed more funding to meet operational needs than it actually did. The gap between the budgets presented to taxpayers and the district’s actual financial results totaled approximately $87 million over the five-year period.
In addition, the report found that five reserve funds totaling $24.3 million were either unused or likely held more money than reasonably necessary. District officials also did not establish a clear rationale for how reserves were funded.
The audit further noted that the Board did not develop a written multiyear financial plan or a comprehensive capital plan, limiting its ability to assess long-term financial risks, revenue trends and the affordability of new programs or capital improvements.
The Comptroller’s Office issued seven recommendations aimed at improving transparency and financial oversight. District officials disagreed with certain aspects of the findings but said they have begun or plan to begin corrective action.
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