With the possibility of additional cuts being discussed by school officials, it’s becoming harder to ignore the fact that the Greater Amsterdam School District is currently sitting on a ridiculously high $10 million cash fund balance that could be utilized to offset some of the unprecedented delays and reductions in aid from New York State. District officials, however, seem reluctant to use it and it’s hard to understand why.
According to the New York State Education Department, the New York State Real Property Tax Law limits the size of the fund balance a school district can accumulate to 4% of its total budget. For GASD, who just passed a $75.9 million budget, a $3 million fund balance is the maximum allowed by law.
It’s also worth noting, the New York State Comptroller’s office notified the district way back in 2016 that this was a problem they had to fix and directed the district to “reduce the amount of excess fund balance in a manner than benefits District residents.”
Key Findings
Unassigned fund balance exceeded the 4 percent legal limit at the end of the 2013-14 and 2014-15 fiscal years.The District did not develop a multiyear financial plan to manage its fund balance and reserves.
Key Recommendations
2016 OSC Audit of the GASD
Maintain levels of general fund unrestricted fund balance within statutory limits and reduce the amount of excess fund balance in a manner than benefits District residents.
Develop a comprehensive multiyear financial plan to establish objectives for funding long-term needs.
Maybe it’s good fortune that the district never really did anything about that these past years, because if there was ever a time we needed to use that money for the benefit of district residents, it’s now.
So now we have a recent press release from the district which has this to say about the fund balance issue:
The district has about a $10 million fund balance legally permitted for emergency costs. The district may apply some of this fund balance to help get through the monetary shortfalls caused by the COVID-19 pandemic and loss of state aid, [Superintendent Richard] Ruberti said, but it needs to maintain the majority of its savings to remain financially stable going forward. Projections on state funding for education in future years are not encouraging at this time.
GASD Press Release 9-11-2020
Knowing what we know, it’s plain to see the idea that the district “needs to maintain the majority of it’s savings to remain financially stable” clearly violates state law. Relying on a huge fund balance to stay stable is not sound fiscal management.
District officials need to the right thing and use the fund balance as needed to offset cuts in state aid; to keep the buildings open and to fund the academic, arts, and sports programs that residents voted for. They should use up to $7 million if necessary. Anything less is a failure to properly use public monies according to state law for the benefit of our district’s students.
