Surplus law hurts school district, officials say
BY DANIELLE MEDINA
Correspondent

BRICK TOWNSHIP — The school district has one-tenth of the surplus it had a year ago, according to a recent audit of the 2005-06 budget.

It’s a number that school officials aren’t happy about.

“I’m resigned to the fact that we’re at 2 percent,” Superintendent Thomas L. Seidenberger said. “We’ve accomplished what the Legislature has told us we have to do. Now what?”

School districts are only allowed to keep 2 percent of their budgets in surplus, according to S-1701, a law introduced in 2004 to provide property-tax relief. Any amount of money over the 2 percent fund balance is deemed as excess and must be returned to taxpayers by offsetting any tax rate increase.

The district had an excess surplus of $1.6 million in 2004-05. In 2005-06, the district’s excess surplus was reduced to $161,997, and its surplus balance reduced to $2.3 million, roughly 2 percent of the district’s total budget.

The findings were presented to the Board of Education at the Dec. 13 board meeting by the district’s accounting firm of William E. Antonides & Co., Toms River.

“We’ve controlled our spending, but at what cost?” Seidenberger said. “Only 9 percent of our computers meet the state’s minimum requirements. We need new textbooks. And what about next year when we have to replace school buses at $65,000 each?”

“The amount of money we have in surplus for this upcoming budget is a lot less than last year,” said John Talty, chairman of the board’s Business and Finance Committee.

Nicholas Puleio, the district’s former business administrator, was on hand to address the findings of the audit and to answer questions from the board.

“There is a revenue shortfall you’re going to have to address in the upcoming budget,” Puleio said. “This is a large operation. A $2.3 million fund balance is not significant on a $129 million operation.”

School officials say a higher surplus fund balance is needed to keep pace with technology and the rising costs of health insurance, as well as for unexpected emergencies.

“What if a couple of boilers break?” Seidenberger said. “Two percent isn’t even practical. A fiscally prudent fund balance is somewhere between 4 and 7 percent.”

Seidenberger said he is hoping for a fair funding formula from the state.

“The state’s own paperwork shows that we’re $22 million underfunded,” he said. “State aid has been frozen for three of the last four years.”

The audit also examined the reporting documents that the district is required to send to the state, along with its internal operations and procedures for doing business.

While the report found seven areas for improvement, none of them was “material,” said auditor Edward J. Simone.

“Certainly, no business administrator wants to see any audit recommendations, but I think we would be silly to think that everything that we do, we do perfectly,” Puleio said. “The audit process exactly helps us identify our weaknesses.”

The most notable finding of the 2005-06 audit was that several of the district’s general fund accounts have receivable balances totaling $170,000.

Simone said that the money owed the district is from uncollected preschool tuition and special education tuition due from other school boards.

The board vote 7-0 to approve the auditor’s findings and recommendations, as well as a corrective action plan.

Puleio said that a number of the items in the plan have either already been completed or will be done by Feb. 28.