MONTICELLO — Continuing a trend that recently focused on the Tri-Valley and Sullivan West districts, NYS Comptroller's Office auditors criticized the Monticello Central School District's budgeting practices.

And just like T-V and SW, Monticello bit back, arguing the district is budgeting appropriately and conservatively, especially in the wake of less state funding.

The audit

“The board and district officials could have adopted more reasonable budgets,” said auditors.

They determined that, between July 1, 2009 and June 30, 2014 (the scope of the audit), Monticello spent around $6 million less than budgeted while raking in $2.3 million more than budgeted.

Why? According to auditors, Monticello underestimated refunds from BOCES and overestimated expenses pertaining to teaching, special education, transportation and plant operation.

District officials planned for deficits averaging $6.4 million overall during that time, but instead they wound up with surpluses - so much so, in fact, that Monticello's surplus level rose from 8.4 percent of the budget in 2010 to 17.6 percent in 2013 “and is likely to continue to rise.”

As a result, auditors deemed the tax levy increases between 2010 and 2013 were entirely unnecessary.

They called that “particularly disconcerting given the district's demographic profile, where 30.5 percent of children in the district are living in poverty, as compared to the statewide average of 21.3 percent.”

Auditors did note the district was attempting to gradually address the surplus situation through transfers of excess funds to reserves but that “currently, there are no board policies relating to reserves and reasonable balances.”

They determined that Monticello's workers' compensation claims reserve fund and unemployment insurance reserve fund had balances far higher than what the district's historical payouts would require.

They recommended:

• The board and administrators develop realistic budgets that avoid unnecessarily raising taxes

• The board ensure the district's surplus is in compliance with state law, which mandates it comprise no more than four percent of the budget

• The board review all reserve balances and establish policies for each reserve fund, including reasonable funding amounts

Monticello replies

In a written response filed with the audit, then-Monticello Supt. Dan Teplesky fired back at the state.

“Monticello disagrees with the state's poor budgeting practices statements,” he wrote, noting that both the board and the public approved the budgets in question.

He added that there was a change in administration (including the superintendency) during that period - and even more consequential, the state initiated the two-percent property tax increase cap, which has forced Monticello to use more of its surplus.

Part of the district's desire to hold on to funds stems from the possibility that one or two casinos could come to the area, which could swell Monticello's student population to the point where more programs and facilities would be needed - possibly even requiring the reopening of the closed Duggan School in White Lake, said Teplesky.

“Should this come to fruition,” he wrote, “... the current fund balance permits the district to do so.”

As to auditors' recommendations, Teplesky said Monticello “has and continues to develop realistic budgets that are consistent with the district's actual revenues and expenditures.”

He expects Monticello's excess monies to be used over the next five to six years to offset decreases in state aid and the effects of the tax cap.

He promised the district will ensure the unexpended fund balance is in line with state law limits, noting that a $1.5 million capital reserve fund proposal will be made to voters this coming May.

And Teplesky did acknowledge that the workers' compensation reserve fund needs to be reviewed and an overall reserves policy defined.