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Audit: Teaneck School District shows $18.6 million in reserves; auditors list 12 recommendations
Summary
Auditors presented the districtfinancial statements as of June 30, 2024, explaining reserves, on-behalf pension reporting and a 12-item recommendation list; the district will present a corrective action plan next week.
Liz Schick, a partner at Lurch, Vincy and Bliss, presented the Teaneck School Districtauditorreport for the year ended June 30, 2024, saying the district reported $18.6 million in reserves and fund balances but that much of the money is already designated for specific purposes.
Schick told the board the districthad roughly $4.8 million in capital reserve, about $3.1 million in maintenance reserve, $285,000 in a tuition reserve and $4.7 million classified as excess surplus (the amount above the state-allowed 2% unassigned fund balance). She also said encumbrances totaled about $1.7 million and that the districthas an unassigned fund balance of about $860,000 on a GAAP basis after those designations.
Schick explained part of the difference between the GAAP statements and the districtbudgetary basis is delayed state aid: the state defers June aid into July, which auditors treat differently for reporting. She also noted a $21.5 million state "on behalf" amount for pension and FICA reported as both revenue and expense on the general fund statements, which increases total reported revenues to about $133 million and expenditures to about $132.6 million.
The auditorslisted 12 recommendations in the management report. Schick summarized the findings as falling into three broad groups:
- Financial planning, accounting and reporting (eight findings), including not maintaining a payroll agency ledger for deductions, untimely board secretary/treasurer reports, unreconciled warrant account items, unreconciled balance sheet subsidiary ledgers, missing 10% transfer worksheets when applicable, and not preparing year-end compensated-absences liability calculations. - Purchasing (two findings): incomplete documentation for state and cooperative contracts and required publication/ratification steps for professional service contracts and change orders. - Capital assets and fixed-asset controls (two findings): capital projects not recorded in amounts approved and lagging capital-asset and depreciation reporting.
Schick said items marked with an asterisk in the report were repeats from the prior year. She told trustees a corrective action plan addressing the recommendations would be presented for board approval at next week's meeting.
During questions, trustees sought clarification on the timing and use of the designated surplus, and Schick confirmed that some designations had been applied to the 2024-25 budget and that roughly $3.4 million of the excess surplus must be applied to the 2025-26 budget. Dr. Spencer, superintendent, and other trustees asked about implications for budget planning and controls; Schick recommended timely reconciliations, stronger grant accounting controls and improved documentation for purchasing and contracts.
Dr. Spencer said the administration would post the audit and work with the interim business administrator and auditors to implement the corrective action plan. The board did not take a formal vote on the audit during the workshop; Schick said the corrective-action item will be on a future agenda for formal action.
