Center Moriches Taxpayers Community Discussion Forum

 FOR RELEASE:

Audit Finds Center Moriches School District Provided Inadequate Information to Public Before 2004 Budget Vote

End Result was Voter Confusion and Significantly Higher Tax Increase than Expected

The Center Moriches Union Free school district did not provide residents with legally-required financial information before the May 2004 school budget vote, according to an audit released today by New York State Comptroller Alan G. Hevesi. Because the district failed to provide this information, taxpayers were not informed they were actually voting on a nearly 40 percent real property tax increase.

Prior to annual school budget votes, school districts in New York State are required by State law to provide the public with a property tax report card, along with a budget notice, that includes an estimate of the total tax levy and the percentage increase or decrease in the total tax levy from the preceding year.

Auditors found that while the district disclosed that the 2004-05 budget was $26.8 million, a 13.7 percent increase over the previous fiscal year, the district did not calculate the tax levy or rate. Instead the district listed the resulting tax levy and tax rate as “NA.” The district claimed that “pending uncertainties regarding issues that will directly impact the proposed tax levy and tax rate made it impossible to calculate an estimate of this amount at this time. These issues include state aid, the results of the pending New York State court case brought by the Campaign for Fiscal Equity, and the assessed values of properties located within the district.”

Contrary to the district’s statement, auditors determined that the district in fact had all the necessary information to calculate an estimated tax increase but chose not to. In addition, in all the previous years examined by the auditors, the district had always provided taxpayers with tax rate information even though it had faced similar uncertainties. The district failed to provide clear information to taxpayers, so there was a misperception among some voters that the 13.7 percent increase in proposed spending was also the increase in the tax rate. The actual tax rate increase was 38.4 percent.

“School district officials were well aware that the 2004-05 budget was going to significantly raise taxes but they did not provide this information to taxpayers,” Hevesi said. “As a result, taxpayers did not have the necessary information to make an informed decision before voting on the budget.”

The school district generally agreed with the audit findings, including auditors’ conclusion that it did not provide necessary information to voters prior to the May 2004 budget vote. However, the district strongly disagrees that this is any evidence that the district deliberately led the public to believe that the tax rate increase was 13.7 percent. The district’s response is included in the audit report.

The audit, which was started in October 2005, was conducted at the request of State Senator Kenneth P. LaValle and State Assemblyman Fred W. Thiele, Jr., as well as dozens of district residents who wrote to the State Comptroller’s office, after taxpayers in the school district received substantially higher tax bills than expected. As part of the audit, auditors examined the 2001-02 through 2004-05 budgets, as well as the district’s procurement practices.

Auditors also found that the district rarely used requests for proposal (RFP) to obtain competitive proposals for professional services. Auditors found that the district did not solicit competitive proposals for seven of the ten professional service contracts tested totaling $110,000 and did not enter into written agreements with three of these providers. In addition, auditors found that some of these contracts were never approved by the board, and that some were paid more than the board had approved. For instance, one contractor charged the district $30 more per hour than the board had approved, so the district overpaid the contractor $9,127.

Auditors recommended that the district provide training to its staff to ensure that the taxpayers are provided with all legally required information prior to the budget vote. In addition, auditors recommended substantial changes to the district’s procurement policies and practices including revising the policy, the approval process of contracts, and how contracts are processed for payment.

The Center Moriches Union Free school district is located in the Town of Brookhaven in Suffolk County. There are three schools within the district, and there are approximately 1,400 students and 250 employees in the district. The district’s budget for 2004-05 was $27 million.