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November 23, 2009 - 12:19pm

Audit report finds Batavia City Schools with large surplus, some overpayment to staff

posted by Howard B. Owens in batavia, education.

A state audit of the Batavia City School District found that through apparent accounting errors, some employees have been overpaid and the district has tended to over estimate expenses and under estimate revenue, resulting in an operating surplus of $6 million.

"As a result, we identified $7.3 million which has been inappropriately placed in reserves but rather should be used to benefit taxpayers," the audit report states. "Had these practices not occurred, and had District officials complied with statutory limitations for retained fund balance, the excess could have been used for District operations, or to fund necessary reserves or to reduce the tax levy."

The district plans to take corrective action, according to both the report and a press release from the district.

Those were the only two nicks on the report, which district officials otherwise characterized as favorable audit.

"The audit report delivered to the Board of Education was very positive. No graft, corruption, or misappropriation of public funds was identified," district officials said in a press release.

Our audit compares very favorably to other school district audits across the state. Other districts have been cited for administrative actions without Board approval, weaknesses in internal controls and purchasing, District actions without voter approval.  We have not been cited for any of these issues.  This audit reflects the hard work that has been done in our District to ensure that the public can trust that the District officials and Board of Education take their fiduciary responsibility very seriously.

The payroll errors, as uncovered by The Division of Local Government and School Accountability of the Office of the State Comptroller of New York, amounted to $50,000 in "improper or unsupported payments." 

Auditors reviewed payroll records for 17 employees, and reported, "Ten employees, or 59 percent, were overpaid or received compensation which was not provided for in the applicable contracts or supported by sufficient documentation."

The district's press release:

The Comptroller’s report highlights several payroll findings, which appear to be overstated when the specific findings were investigated by District staff. The actual legitimate findings amount to less than one tenth of one percent of the total payroll processed over the two year period. There is always room for improvement and we are planning to take several steps to reduce any potential risk for error.

As for the surplus funds, the district says:

The essence of this comes down to the simple fact that the District budgets conservatively, never overestimating its potential revenues or underestimating its potential expenses. This practice allows for flexibility should an unforeseen financial hardship arise, but often results in legitimate surplus.  The District has used this surplus to maintain a stable tax levy and to fund authorized reserves.  Even though the Comptroller’s Report views this negatively, there appears to be an inherent contradiction since these accounts are promoted as providing many benefits to municipalities and their citizens (www.osc.state.ny.us/localgov/pubs/lgmg/reserves.pdf).  No doubt conservative budgeting practices have allowed us to position ourselves to maintain our educational program even in difficult financial times without turning to tax increases.

Download: Full Audit Report (PDF)

Mark Potwora
Mark Potwora's picture
Last seen: 7 months 1 week ago
Joined: May 14 2008 - 6:42pm
Sound like we are due a rebate on our school taxes...Are they going to make those overpaided repay it back...Seems like Scott Rozanski needs to be replaced...poor job on his part...Overpaying staff and over taxing the taypayers seem like a big deal to me...Sounds like they are taking its no big a deal excuse...where does the buck stop..
Bruce Wiseley
Bruce Wiseley's picture
Last seen: 1 year 9 months ago
Joined: Feb 7 2009 - 4:41pm
Show me the money, oh I forgot where I lived for a minute! Send it to the Governor so he will quit whining about how broke the State is. Oh heck, I forgot again.
John Roach
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Last seen: 3 months 2 weeks ago
Joined: May 29 2008 - 5:22am
Make the changes and lower the tax rate next year.
Dave Meyer
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Last seen: 2 years 3 weeks ago
Joined: Feb 4 2009 - 5:37am
First of all, thanks for posting this Howard. Secondly, to all the city school district taxpayers...do yourself a favor and invest the time it will take and read the 'Full Audit Report'. I mean REALLY READ IT. Then draw your own conclusions. If you think that this report is "favorable", I'd hate to see an unfavorable one. I found the contents very disturbing although not completely unexpected given the way the district floats the 20% tax increase trial balloon at the start of the budgeting process and then when the tax increase is whittled down to what might be considered somewhat reasonable, they expect to be hailed as heroes. They floated that balloon KNOWING that they had $6 million in reserve. At the least it was disingenuous and at worst it's irresponsible. From my read of the report, it would appear that there is none or almost no oversight of the payroll process. They sort of make it up as they go. I'll say this. The district should ABSOLUTELY seek a repayment of ANY overpayment to ANY employee who received them. It would seem that the business administrator is operating with little or no oversight by anyone. The district has more administrators than you can shake a stick at but they say that "they don't have enough staff" to properly monitor the payroll process. I guess this report would help to explain why the district was rated 68th out of 97 WNY districts in Cost Effectiveness and 77th out of 97 districts in Administrative Efficiency by Buffalo Business First. **READ THE REPORT** is about all I can say.
Mark Potwora
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Last seen: 7 months 1 week ago
Joined: May 14 2008 - 6:42pm
David i read the report..I think those on the school board need to start getting phone calls from us taxpayers...They are trying to brush this off as no big deal.Its a real big deal the amount of money they have been stealing from us... They need to fire Scott Rozanski right away...I hope there is more outrage about this or else this school district will keep up this way of doing business..... http://www.bataviacsd.org/board_members.cfm
Tom Gilliatt
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Last seen: 4 years 2 months ago
Joined: May 17 2008 - 7:54am
Yep I really have to pinch myself and not say how I feel about this but it makes you wonder how many other indiscretions there are going on that we don't know about.
Danielle Dempsey
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Last seen: 7 years 9 months ago
Joined: Oct 27 2009 - 10:51pm
The amount was "findings less than one tenth of one percent of total payroll over a two year period". Really? Who would cry about that amount? Our teachers are well deserving of a "little extra" on occasion. And no I'm not a teacher or a resident of Batavia.
Mark Potwora
Mark Potwora's picture
Last seen: 7 months 1 week ago
Joined: May 14 2008 - 6:42pm
Danielle guess your math isn't so good... Auditors reviewed payroll records for 17 employees, and reported, "Ten employees, or 59 percent, were overpaid or received compensation which was not provided for in the applicable contracts or supported by sufficient documentation." They didn't look at every person on the school payroll..only 17 and 10 of those were over paid..sounds like a problem to me...If the city of batavia was over paying city workers or hoarding the much cash they would burn down city hall..

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