Read the complete
follow-up audit online at:
www.osc.state.ny.us/local
gov/audits/index.htm
LAKE PLACID — State Comptroller Thomas P. DiNapoli reproved Lake Placid Central School District for increasing the tax levy after the budget vote in 2008.
In an audit three years ago, the comptroller advised the School Board not to raise taxes above appropriations set in the budget.
But in a followup report released this week, the Comptroller's Office found that on Aug. 19, 2008, the School Board "levied taxes for the 2008-09 school year which exceeded the amount required to fund appropriations by $368,763," noting, "we had informed district officials that taxes should only be levied to the extent needed. The board still levied excess taxes for the 2008-09 fiscal year."
LAWSUITS, retirements
Interim School Superintendent Ernest Witkowski, who was hired in September 2009, said $240,000 of the additional levy was used to open a tax certiorari account, pending legal challenges to assessments on three North Elba properties.
The lawsuits — settled in December and January — require the district to refund $910,000 in school tax for overassessed condominiums at Whiteface Lodge, Brookhill and Lakeside in North Elba.
The other $110,000 in added tax levies raised in 2008 was used to open a second reserve account to pay off benefits when school employees retire, Witkowski said.
"We knew there are a lot of retirements coming down the line. The board minutes from August 2008 should outline why they are doing this."
'PRUDENT DECISION'
On Aug. 19, board members unanimously approved both reserve accounts: $240,000 for school tax refunds and $128,763 for an accrued liability fund.
It is not illegal for a school board to increase the tax levy after the budget is approved, Witkowski said.
"Legally, boards of education can do this. They are empowered to collect more taxes than advertised in the May vote.
"This was an extreme example, because the School Board knew the Whiteface Lodge and others would need to be repaid. This was a prudent decision."
'NOT IMPLEMENTED'
Lake Placid has complied with the advice for the other two fiscal years since the audit.
But the comptroller marked the overall recommendation: "Not Implemented."
"We partially implemented this recommendation," Witkowsi said. "In two of the three years, we were in compliance."
The $240,000 raised from 2008 is still in tax certiorari reserve.
"By June, this money will be gone. And we're going to have to borrow the rest."
Witkowski said a procedural error was made by the School Board in not amending the budget in August 2008.
"If that had been done, we never would have been written up."
WON'T HAPPEN AGAIN
Going forward, the School Board is faced with making nearly a half-million dollars worth of budget cuts for 2010-11.
But taxpayers can expect the board will not levy taxes above appropriated amounts again, he said.
"I don't think there is or was any intention of the board doing this again."
Of the total 12 audit recommendations made in 2007, nine have been fully implemented, one partially implemented and two — including the tax-levy concern — not implemented.
ACTIVITY FUNDS
DiNapoli said the school has also not established a routine to monitor extra-classroom activity funds.
Auditors reviewed 54 programs and found 20 that do not conform to state regulations.
Of those 20, the follow-up report said, six were for grades K-5, 12 were no longer active and two had no student participation.
The School Board has said it would address this policy.
E-mail Kim Smith Dedam at: kdedam@pressrepublican.com
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