Weedsport taking steps to increase reserve funds following state audit

The Weedsport Central School District had already implemented a plan to increase its fund balance even before a recent audit by the office of New York State Comptroller Thomas P. DiNapoli designated the district as “susceptible to fiscal stress.” Weedsport had a “no designation” status the previous two years, which is the best rating a district can have.

Under the “fiscal stress monitoring system,” the New York State Comptroller assesses the financial health of school districts by using a variety of factors, including year-end fund balance, cash position and patterns of operating deficits. It then assigns them a score between 1-100 percent. A score of between 65-100 percent signifies “significant fiscal stress,” anywhere between 45-64.9 percent qualifies as “moderate,” and 25-44.9 percent earns a district a “susceptible” designation. Districts below 25 percent do not make the list.

For the fiscal year ending in 2019, the state gave the district a score of 38.3.
District leaders attributed its 2019 classification to a decrease in unassigned fund balance because the district made a payment towards debt service of $400,000.

“We expected this designation and strategically planned for it. It was not a surprise or an accident,” said Assistant Superintendent for Business, Pete Colucci. “Next year, since we don’t have to pay off such a big loan, we expect our fund balance to be back where it was.”

The New York State Comptroller says local governments (including schools) may use some fund balance in order to keep tax rates low and/or maintain services in the face of short-term economic fluctuations, or just to reduce an unnecessarily large fund balance. Even though this results in lower fund balances, spending down of fund balance can be an acceptable practice as long as it is done in conjunction with long-term financial planning and does not reduce fund balance below the critical point.

Superintendent Shaun O’Connor said since the district creates long-term financial plans, he expects a better fiscal score next year.

“We made the list back in 2016 and we knew we were going to end up on it, so we took action immediately,” he said. “Once again, we’re taking the steps to better our score.”