Lake Placid Central School Board accepts critical state audits
LAKE PLACID — The Lake Placid Central School District Board of Education accepted two audits — which, combined, said the district missed out on more than $200,000 in funds over the last five years — from New York state Comptroller Thomas DiNapoli last week.
DiNapoli’s office released the audit reports on Oct. 20. The first report concluded that district officials failed to “develop and manage a comprehensive investment program” and said that, had they done so, the district might have earned about $267,000 more during the two-year audit period. The second report said that district officials failed to apply for all available state aid for bus acquisitions and could have received $18,842 to purchase school buses during the five-year audit period.
According to the first audit report, a comprehensive investment program should “ensure the safety of investments and deposits while maximizing earnings on any money that is not required for operations.”
District officials and Assistant Superintendent for Business, Finance and Support Services Dana Wood failed to meet the state’s definition of a comprehensive investment program because they did not maximize earnings on the district’s non-essential money.
“Had officials considered other legally authorized investment options, officials might have earned about $267,000 more than the $189,305 the District actually earned from July 2021 through April 2023,” the audit report read. “(Wood) did not ensure monthly cash flow forecasts to estimate funds available for investment were prepared or solicit interest rate quotes to maximize interest earnings.”
The report said Wood told auditors that he had “discussions” with a different financial institution last September, but did not request a proposal for investment service. The audit recommended that Wood and district officials should solicit interest rate quotes from multiple institutions and prepare forecasts of the district’s monthly cash flow to better understand how much is available for investment.
In the district’s written response to the audit, Wood said that he will start to solicit quotes on a yearly basis and authorized the transfer of more than $10 million out of the district’s insured cash suite and into NYCLASS, which is a higher-yield, short-term liquid investment fund. He also said he would start to present a monthly cash flow projection to the school board.
The second report concerned state transportation aid for the acquisition of school buses. A school district receives this aid by applying to the New York state Education Department with detailed information about a school bus within one year of the bus being purchased or leased.
According to the report, LPCSD acquired 13 buses during the five-year audit period — from July 2018 to April 2023 — and only submitted the proper paperwork for two of those buses.
The two buses were acquired for a combined $160,810, while the remaining 11 buses were acquired for a combined more than $1 million.
“By not submitting the proper applications for 11 buses, the District’s taxpayers will not benefit from the $18,842 in aid the District would have received upon approval with SED,” the report read. “In addition, if officials do not properly file the aid applications, taxpayers will also not benefit from the remaining $45,034 officials can claim.”
The audit report said that Wood “was not aware transportation aid was available and did not understand that transportation State aid forms were required to be filed with SED.” The report recommended that SED applications are prepared and submitted from now on, including some buses already acquired by the district which still may be eligible for aid. In the district’s written response to the audit, Wood said that the district has cleared its backlog of bus aid forms and submitted them all to SED. SED accepted the applications.
At the school board meeting on Nov. 14, board member John Hopkinson said that he was “uncomfortable” with accepting the audits without discussion and wanted clarification from Wood on his response to the audits.
“From my perspective — and I think the board’s perspective — we need to make sure that we do the due diligence,” he said. “I thought (Wood’s) reply was pretty generic. What I’d like to know is, the result was we left essentially $300,000 on the table, and that’s some cost. $300,000, that’s not chump change.”
District Superintendent Timothy Seymour said that the audit was “based on the feeling that the district wasn’t sufficiently aggressive in our investment.”
Wood said that the district had not lost any funds so much as they missed out on additional funds.
“When you look at it, I mean, it’s not lost revenue where we lost money,” he said. “It was the fact that we have historically have taken a very conservative approach when it comes to putting our money into the ICS, insured cash suite, (which) is actually more liquid. We can get it in minutes. And I think that’s historically where that money has been kept.”
“It’s really a hindsight thing,” Board President Daniel Cash said.