Norwich school board approves annual audit; district has $0 fund reserve
NORWICH – Norwich City School District's Board of Education approved the district's annual audit and corrective plan at its meeting Wednesday night, during which board members and the public expressed concerns about the district's lack of fund reserves.
The audit notes that the district will begin the 2018-19 fiscal year with an unassigned fund balance of $0, which is a decrease from the $238,000 unassigned fund balance from the prior year.
Stan Cwynar of Cwynar & Company, CPAs, PLLC – which conducted the district's audit – told the board Wednesday that New York State likes the unassigned fund balance for districts to be four percent of the subsequent year budget, or about $1.6 million. He said the loss of unassigned funds can be attributed to rising expenses coupled with a stagnant revenue stream.
"Even though the fund balance is dismal, there are some bright spots for Norwich City School District," said Cwynar. The bright side, Cwynar said, is the district's net position stands at $55 million. "When you look at your savings compared to other [districts], it's very strong. You have a strong financial statement compared to a lot of other districts."
The audit identified four corrective actions for the district to take pertaining to the recording of miscellaneous revenue, developing a policy for unpaid meal charges, reconciling the Teachers Retirement System (TRS) accrual to its payroll account prior to recording the journal entry, and allocating health insurance expenses for food service workers to the school lunch fund.
During the meeting's public comment portion, Norwich resident Pete DeRensis asked the board to "pay attention to the writing on the wall" and begin making hard decisions while they still can.
DeRensis said the fiscal health of the district has little to do with what is spent relative to the budget, and a lot to do with what is spent relative to actual revenue. He noted that an organization's revenues minus expenses equals its surplus or deficit, and said seven of the last eight years the district has finished with a deficit.
"I guess what I want to say is it doesn't matter what organization we're talking about: you can only run significant consecutive deficits for so long before you run out of resources to fill those holes," said DeRensis. "I think that's where we're at right now."
Board member Brian Reid said he agreed with DeRensis' comments. He said for years the district has treated its variable costs as fixed costs, and although at one point its fund balance was in excess of New York State mandate, one could see the expenses were outweighing the revenues and it would catch up with them.
"What I'd like to know is, what forward looking measures are we putting in place to make sure we don't get there, because we're sitting in a place right now where we're having the most uncomfortable conversations," said Reid. He suggested that the board see a monthly update of its budgeted and actual revenues and expenses at every board meeting.
"If we did it that simple, if we had done it that simple over the last X number of years, we would likely not be in the situation we're in," said Reid. Board member Brian Burton said he seconded Reid's comments.
The district's financial statement and auditor's report can be viewed in full at https://www.norwichcsd.org/Downloads/NCSD%20Financial%20Stmt%202018%20-%20Final.pdf
The next Norwich City School District Board of Education meeting will take place at 6 p.m. on Wednesday, January 16 in the district office.
The audit notes that the district will begin the 2018-19 fiscal year with an unassigned fund balance of $0, which is a decrease from the $238,000 unassigned fund balance from the prior year.
Stan Cwynar of Cwynar & Company, CPAs, PLLC – which conducted the district's audit – told the board Wednesday that New York State likes the unassigned fund balance for districts to be four percent of the subsequent year budget, or about $1.6 million. He said the loss of unassigned funds can be attributed to rising expenses coupled with a stagnant revenue stream.
"Even though the fund balance is dismal, there are some bright spots for Norwich City School District," said Cwynar. The bright side, Cwynar said, is the district's net position stands at $55 million. "When you look at your savings compared to other [districts], it's very strong. You have a strong financial statement compared to a lot of other districts."
The audit identified four corrective actions for the district to take pertaining to the recording of miscellaneous revenue, developing a policy for unpaid meal charges, reconciling the Teachers Retirement System (TRS) accrual to its payroll account prior to recording the journal entry, and allocating health insurance expenses for food service workers to the school lunch fund.
During the meeting's public comment portion, Norwich resident Pete DeRensis asked the board to "pay attention to the writing on the wall" and begin making hard decisions while they still can.
DeRensis said the fiscal health of the district has little to do with what is spent relative to the budget, and a lot to do with what is spent relative to actual revenue. He noted that an organization's revenues minus expenses equals its surplus or deficit, and said seven of the last eight years the district has finished with a deficit.
"I guess what I want to say is it doesn't matter what organization we're talking about: you can only run significant consecutive deficits for so long before you run out of resources to fill those holes," said DeRensis. "I think that's where we're at right now."
Board member Brian Reid said he agreed with DeRensis' comments. He said for years the district has treated its variable costs as fixed costs, and although at one point its fund balance was in excess of New York State mandate, one could see the expenses were outweighing the revenues and it would catch up with them.
"What I'd like to know is, what forward looking measures are we putting in place to make sure we don't get there, because we're sitting in a place right now where we're having the most uncomfortable conversations," said Reid. He suggested that the board see a monthly update of its budgeted and actual revenues and expenses at every board meeting.
"If we did it that simple, if we had done it that simple over the last X number of years, we would likely not be in the situation we're in," said Reid. Board member Brian Burton said he seconded Reid's comments.
The district's financial statement and auditor's report can be viewed in full at https://www.norwichcsd.org/Downloads/NCSD%20Financial%20Stmt%202018%20-%20Final.pdf
The next Norwich City School District Board of Education meeting will take place at 6 p.m. on Wednesday, January 16 in the district office.
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