STAR LAKE – A state audit of the Clifton-Fine Central School District is critical of the school for carrying substantial surpluses while raising taxes.

The audit, by the state Comptroller’s Office, says that the problem began as “District officials consistently overestimated expenditures for the past five years by a total of $4.5 million. As a result, the district had operating surpluses totaling $2.3 million in four of the last five years.”

Furthermore, the report says the district “did not need to use the majority of the $1.2 million fund balance which the board appropriated as a revenue source in the general fund budgets over the last five years. Despite its budgetary surpluses, the district also increased its real property tax levy by approximately $300,000 – a total of 8 percent – over the last five years,” the audit report said.

At the same time, the auditors reported, the district didn’t claim all of the bus mileage it could have for state aid, and “during the state aid years 2009-10 and 2010-11 the district potentially lost revenue of $26,500 and $23,000 respectively.”

The audit covers July 2008 through June 2010, and examined records back to the 2005-06 fiscal year.

As is the usual process, the auditors discussed their findings and recommendation with the district, and district officials generally agreed with the recommendations and said they would take corrective action and report their plan to the Comptroller’s Office. The recommendations include developing more realistic estimates of expenses and fund balances, designing policies for the establishment and use of reserve funds with specific amounts and attention to requirements of the district and of law, presenting a higher degree of transparency in those matters, seeking voter approval for transfer from the repair reserve fund to a capital improvement reserve, and finding better uses for built up reserves such as paying off debt, reducing taxes, financing one-time expenditures, and increasing necessary reserves.

The auditors also recommended filing revised claims with the state for transportation aid and establishing a preparation and review process for state aid claims. In acknowledging the shortcomings and recommendations, District Superintendent Denise Dzikowski said the district was pleased the report made no claims of impropriety on the part of the district. Dzikowski writes that the district did take some exception to the criticism of their management of finances, which the district maintains has resulted in lower loan rates and a low tax rate.