Budget FAQ
Understanding Our District Finances
The South Country Central School District is committed to open communication and accountability. We know our community has important questions about recent financial reports, the budget overspend, and the steps being taken to strengthen oversight. To provide clear, accurate information, we have created a Financial Oversight & Accountability FAQ . This resource explains what happened, what we are doing right now, and how we are planning for the future. Our goal is to keep the community informed with verified information and to reaffirm our shared commitment to fiscal responsibility and strong schools.
[Read the Financial Oversight & Accountability FAQ below]
Financial Oversight & Accountability FAQ
Questions About the Reported Overspend & Deficit
Q: What steps has the Board taken in response to the overspend?
A: The Board of Education acted quickly after it was notified by the administration that the expenses for the last year exceeded the budget. The Board asked that our external auditors, Cullen & Danowski, finalize the 2024–2025 audited financial statements as soon as possible. They also contracted with IMG, a highly regarded forensic auditing firm, to conduct an independent, in-depth review of what went wrong and to recommend corrective actions. To strengthen daily financial oversight, the Board provided additional resources to the district by authorizing the retention of John Belmonte, a school business official with more than 30 years of experience.
Q: What was the overspend last year?
A: After a full review of expenditures and revenues, we can state with confidence that the district overspent the voter-approved 2024–2025 budget by approximately $3.49 million. This reflects the difference between what was budgeted and what was actually spent. The forthcoming audited financial statements, along with the results of the independent forensic audit, will provide additional details about where those variances occurred.
Q: What does it mean to have a deficit?
A: The deficit reflects that last year’s expenditures exceeded revenues by approximately $16.2 million. To cover this shortfall, the district drew down from reserves — essentially using taxpayer dollars that had been set aside in prior years. The use of reserves was planned in the budget, but not to the extent created by the expenditures. While this allowed us to meet our obligations, it also reduced the financial cushion available for future years. This underscores the importance of strengthening our financial practices to avoid relying on reserves in this way moving forward.
Q: Why did the district issue a Tax Anticipation Note (TAN) for $27.5 million?
A: A TAN is short-term borrowing that many school districts, like ours, use annually to manage cash flow until the collection of property taxes. It is important to note that this borrowing is repaid within the fiscal year, once tax receipts are collected. In addition, the district was awarded a
MIG-1 rating for this borrowing — the highest short-term rating available — which reflects the confidence that outside financial institutions have in the district’s ability to repay its obligations. The TAN was not issued due to the overspend, but again, is the annual practice districts use to manage cash flow.
Questions About Oversight & Controls
Q: What immediate internal controls and protocols has the administration already put in place this year to help prevent an overspend?
A: We have enacted strict spending controls, including thresholds for administrative approval of expenditures, enhanced budget code monitoring, and monthly reporting of actuals compared to projections. In addition, with the Board's support, we have contracted with John Belmonte, a veteran school business official with over 30 years of experience, to provide added oversight and expertise.
Q: How will the Board be informed if additional corrective controls are recommended by the auditors?
A: Any recommendations from the external auditors will first be reviewed by the Audit Committee. From there, they will be shared with the full Board in public session, along with an implementation plan for any new corrective controls. Additionally, any recommendations from the forensic auditors will be reported to the Board.
Q: Are there thresholds or approval requirements in place for expenditures while we await audit results?
A: Yes. All discretionary expenditures now require central office review and approval. Larger or non-routine expenditures must be justified in writing and reviewed by both the Superintendent and the business office before proceeding.
Questions About Stakeholder Communication
Q: What role will the Audit Committee play in ensuring transparency and accountability when the reports are finalized?
A: The Audit Committee, consisting of three board members and two community members, serves as the first line of Board review. They will receive the reports directly from the external auditors, ask clarifying questions, and ensure that recommendations are communicated clearly before the reports are shared at a public Board meeting.
Q: How will the findings of the external audit be communicated to the public once complete?
A: Once finalized, the external audit reports will be presented first to the Audit Committee, then to the Board of Education at a public meeting. They will also be posted on the district website for full community access.
Questions About Long-Term Planning
Q: How will the district use the audit results to strengthen multi-year financial forecasting and planning?
A: The results from both the external and forensic audits will be used to build stronger forecasting models, including conservative revenue projections, multi-year expenditure trend analysis, and earlier detection of budget variances.
Q: Will there be opportunities for the Board to discuss structural changes (such as budget development processes) based on recommendations?
A: Yes. The Board will have dedicated opportunities to discuss changes to the budget development process, reserve funds, and reporting practices once the recommendations are delivered.
Q: Are there professional development or training opportunities being considered for administrators or staff in budget monitoring and forecasting?
A: Absolutely. We are exploring targeted professional development for administrators and finance staff, including state-led workshops, BOCES training, and customized sessions with outside experts to strengthen internal financial capacity.
We will continue to update this FAQ as new information becomes available.
The Board of Education and district administration are committed to transparency and accountability related to all district operations. Nothing less is what the South Country Central School District community demands and deserves. We are taking the steps necessary to resolve the immediate issues and ensure the district is never in this financial situation again. We welcome on-going dialogue and discussion with the community. We do share the same goal: to restore and build confidence, safeguard taxpayer resources, and protect the quality of the educational program in the South Country Central School District.
Have a Question?
We understand that our community may have additional questions about the district’s budget beyond those addressed here. If you would like to share a budget-related question or concern, please use the link below. Your input will help us identify what information is most important to our families and allow us to respond with clear, accurate updates for everyone.