Relates to reporting school finances, reserve funds, final annual budgets and multi-year financial plans

Section 3 of this bill adds a new Section 3653 to the Education Law to require boards of education or trustees of a school district to authorize any increased funding of reserves by resolution.

Section 4 of this bill adds a new subdivision 3-b to Section 2116-a of the Education Law to require each school district to post on its website, if any, the annual external audit report and the corrective action plan prepared in response to any findings contained in the annual external audit report or management letter, or any final audit report issued by the State Comptroller.

Section 5 of this bill adds a new Subdivision 7 to the current Section 2022 of the Education Law and the language to which such section will revert if the current law expires to require that each school district post on its website, if any, a final annual budget and any multi-year financial plan adopted by the board of education or trustees.

Section 6 of the bill would make this act effective on the first of July next succeeding the date on which it shall have become a law and addresses the expiration of certain provisions.

Legislative history

2013-2014 - S 4182-B /A3733-B 2011-12 - S. 5689-A / A. 7815-A

Justification

The Office of the State Comptroller's experience auditing school districts and BOCES, as required by Chapter 263 of the Laws of 2005, has resulted in audits disclosing a number of circumstances in which certain significant fiscal activities of school districts and BOCES were undertaken without adequate transparency to the governing board and taxpayers, in some cases because of a lack of statutory direction.

In such audits, it was also found that there were a number of situations when school boards did not have current information about the amounts in the district reserves. Without this key information, school boards cannot effectively manage the finances of the districts. To avoid this situation and increase transparency in school district fiscal operations, the bill would require that all transfers into reserve funds be made pursuant to board resolution, and that a schedule of all reserves, including the balance in each reserve fund and any plans for use of the reserve in the ensuing fiscal year, be included in a schedule appended to the annual budget document. The requirements for posting on a school district's website the annual external audit report and the corrective action plan prepared in response to any findings contained in the annual external audit report or management letter, or any final audit report issued by the State Comptroller as well as a final annual budget and any multi-year financial plan adopted by the board of education or trustees increases the transparency and accountability of the school district to the taxpayers.

The State Comptroller urges passage of this legislation.

Fiscal implications

None.

Effective date

This act shall take effect on the first of July next succeeding the date on which it shall have become a law; provided, however, that the amendment to paragraph a of subdivision 7 of section 1608 of the education law made by section one of this act shall be subject to the expiration and reversion of such paragraph pursuant to section 13 of part A of chapter 97 of the laws of 2011, as amended, when upon such date the provisions of section 1-a of this act shall take effect; provided further, however, that the amendment to paragraph a of subdivision 7 of section 1716 of the education law made by section two of this act shall be subject to the expiration and reversion of such paragraph pursuant to section 13 of part A of chapter 97 of the laws of 2011, as amended, when upon such date the provisions of section 2-a of this act shall take effect; and provided, further, that the amendment to section 2022 of the education law made by section five of this act shall survive the expiration and reversion of such section pursuant to section 13 of part A of chapter 97 of the laws of 2011, as amended.