Report finds issues in Newburgh school district finances, school board to seek forensic audit
The consultants' report referenced state law that states a school district's leftover funds cannot total more than 4% of its budget. The consultants found the district had a reserve amount that is nearly 9% of its budget, putting the district out of compliance with the law by millions of dollars.
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Some Newburgh school board members are calling for a forensic audit of the district's finances after an independent analysis found the district is violating state law in how it handles its yearly budget of more than $350 million.
Financial consultants at EFPR Group CPAs said in a recently released "auditor's report" the school district's most recent financial figures show a large difference from what was predicted in the 2024-2025 budget passed last Spring.
The budget was passed, with a forecast of a deficit.
Property taxes were raised slightly to cover the gap.
The consultants found the district had about $31 million in its unassigned fund balance.
The consultants' report referenced state law that states a school district's leftover funds cannot total more than 4% of its budget.
The consultants found the district had a reserve amount that is nearly 9% of its budget, putting the district out of compliance with the law by millions of dollars.
During a Dec. 23 special meeting, the board was split on whether to put out a request for bids for a forensic audit.
Auditor's reports are done each year to provide a basic summary of a district's financial statements and practices.; they are not audits.
Previous auditor reports showed no mismanagement, administrators and several board members said.
Board President Christine Bello said a discrepancy this large still requires a forensic audit.
"It's our job to know these answers," Bello said. "It's our job to seek the answers, and we're going to get the answers."
Superintendent Jackielyn Manning Campbell told News 12 Thursday afternoon the district ended up with the unexpectedly large surplus because of many factors, and that administrators have been bringing the district back into compliance.
"For example, the district received additional state aid, higher than anticipated interest earnings, Medicaid reimbursement, and utility taxes," Manning-Campbell wrote. "The Board reviewed and approved funding of restricted reserves based on the anticipated surplus on June 27, 2024, based on my recommendation."
She also said numerous staffing changes happened in the last year, setting back some of the tedious work to close out the district's books.
"Staffing recommendations to remedy these concerns were communicated to and acted upon by the Board of Education," Manning-Campbell said.
Board members supporting a forensic audit have not seen any evidence of malfeasance by district employees.
Board members opposing the audit said that since the district's finances appeared under control in past auditor's reports and the problems are being addressed, the district should not commission a full audit.
"I just don't understand how a forensic audit for information you don't have yet is going to [help]," board member Ramiro Burgarelli said. "You already solved the problem. We need to make sure people are in place to back these positions up."
The consultants also found two accounts that were overdrawn and multiple other accounts that haven't been up-to-date since 2017.
After seeing the report, businessman Bob Capano, of New Windsor, decided to run for a seat on the school board this spring.
"You can't tell voters there's a budget gap and then raise their taxes," he said. "We have to have faith that our board members know what they're doing."
The report states that school district officials agreed with each of its findings, and said that all issues from the report will be resolved by June 30.
The consultants also recommended that administrators provide regular financial reports to the school board.
Bello said she has been requesting those reports for months.
The school board voted 5-4 in favor of putting out a request for bids for a forensic audit.
