Auditor Delivers Report to Mineola Board of Ed

"My basic question to you every year - are we in good shape?" Mineola school superintendent Michael Nagler asked Thursday night at the during the monthly meeting of the Mineola Board of Education.

"Uh... yes," Dave Tellier of the district's external accounting firm of Nawrocki Smith, LLP said, "you've come a long way, let's put it that way."  Tellier was present to deliver the results of the external audit report for the fiscal year ending June 30.

The external auditor determines if a district's financial statements are accurate and consistent with accounting standards so that the board can have confidence in using them to assess the financial condition of the district. Within the 60-page report, Tellier said that no material weaknesses or significant deficiencies in internal controls were found and that district cooperation was "excellent." The firm audited the district's general purpose financial statements, as well as Federal grant awards and classroom activity funds.

However, Tellier reported that the undesignated fund balance was "in excess" of the four-percent of the entire yearly budget limitation imposed by State law. The district has $4.2 million undesignated in the general fund, whereas the limit is $3.2 million. Tellier had recommended against putting the excess into reserves because of "the present actions that's going through," meaning.

Trustee William Hornberger asked Tellier how it would be possible to get below the cap, who replied that the district could establish another reserve to move the excess funds into, but the downside is the funds could then only to be used for a specific purpose. The board could also designate the funds for a specific items in next years budget, such as the proposed addition to the .

Mineola currently has about $2.5 million in working capital, or a ratio of 1.3:1, meaning that for every dollar of liability, the district has $1.30 of assets with which to pay. That number is up from a 1:1 ratio last year. "This is right in line with most school districts on Long Island," Tellier said. Capital assets account for $36.8 million based on the report of a a third-party appraiser.

Cash decreased by $1.1 million in 2009-10 as a result of the paydown of bond anticipation note (BAN) principal. "I believe one of the strong management decisions and board decisions that I've seen in a long time in school districts was actually trying to reduce your BAN obligations using current operations instead of going out for long-term financing and saddling the district with long-term debt payments going forward," Tellier said. The district's net income over expenses was about $727,000, down from $1.4 million the previous year. Mineola did experience an increase in income of about two-percent, primarily from ARRA funding. Expenses are up over three-percent from last year.

The auditors have also posted the obligations the district has toward retirees.  The 2009-10 school year was the first year districts are required to begin reporting this number. Mineola's obligation has increased by $1.7 million. "Every year for the next 28-years you'll be looking an an extra $1.7 million," Tellier said. Compensated absences have increased by $500,000 from 2008-09.

The auditors have made seven recommendations to the district, primarily in the areas of budget transfers, employee reimbursements and user permissions. One of last year's seven recommendations has been implemented, the rest are "in the process" of being implemented and/ or "receiving further consideration," Tellier said.