State Comptroller says Friendship school district overtaxed property owners for at least three years

BREAKING: The Friendship Central School overtaxed property owners for at least three years, according to the State Comptroller, retaining an average of twice the surplus funds allowed by law, rather than reducing property taxes accordingly.

In an audit report for fiscal years from 2018 to 2021, the school district projected budget deficits while it should have been anticipating surpluses, resulting in a $2.5 million fund balance, as recalculated by auditors, as of June 30 of last year.

Examiners found that in addition to the surplus exceeding the legal limit by 20 percent, “the Board and District officials also overfunded one general fund reserve by $111,000.”

The district, while generally admitting the errors, said the additional monies were budgeted due to unknown impacts of special education costs, and employee health insurance which can change from single to more expensive family coverages.

The Comproller’s office discounted the reasoning saying the district needed to “develop and adopt a comprehensive written multiyear financial plan.”.

School districts, by law, are allowed to retain fund balances of four percent of projected operating expenses for the succeeding year.

The district had carried an average of eight percent, or twice that allowed, for the three audited years, which doesn’t include the fiscal year concluded on June 20 of this year.

In contrast, other local governments are allowed to retain “reasonable” fund balances which aren’t defined.

Allegany Hope pointed out last fall that the Allegany County, NY, Board of Legislators had been retaining near or more than 100 percent of an entire year’s tax levy as surplus for several years, equating to some $30 million.

The action had enabled it to create small tax cuts each year, dropping the county from being the highest property taxed county in the state to second place out of 57 outside of New York City.

The county also carries the third highest general sales tax rate in the state, above that of New York City and its suburbs.

A copy of the full Friendship school audit, including the district’s response, is available at https://bit.ly/3cUpxKj.
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