Financial Information and Updates
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]
Important Information
- Three-Year Fiscal Recovery Plan Borrowing Options- January 7, 2026
- Three Year Fiscal Recovery Plan: Board Presentation December 3, 2025
- Financial Statements and Supplementary Information with Independent Auditor’s Reports
- Extra-classroom Activity Fund Financial Statement with Independent Auditor’s Report
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.
Q: Is there a long-term plan in place to address the District’s fiscal challenges and ensure
financial stability moving forward, and where can I find it?
A: The District’s Three-Year Fiscal Recovery Plan provides a clear framework for restoring
financial stability while preserving the quality of education our students deserve. The plan
focuses on strengthening internal controls, enforcing disciplined spending practices, improving
revenue oversight, and implementing long-term structural changes to ensure sustainability. It
emphasizes transparency, accountability, and continuous monitoring, with regular updates to the
Board of Education and community. Importantly, this framework is designed to evolve as
additional information becomes available and corrective actions progress. The full Three-Year
Fiscal Recovery Plan is available on the District website for review, reflecting our commitment to
open communication and responsible fiscal stewardship.
Frequently Asked Questions: 2025 Financial Statement
Q: What is the purpose of the annual financial audit?
A: Each year, the district’s finances are reviewed by independent auditors to ensure that
financial statements are accurate and comply with accounting standards. The 2025 audit
received a clean (unmodified) opinion, meaning the statements are accurate and fairly
presented.
Q: What were the main findings in this year’s report?
A: The auditors identified significant financial stress due to overspending the 2024–25
voter-approved budget by about $3.5 million. This led to a $16 million drop in the general fund
balance and an unassigned fund balance deficit of about $1.8 million.
Q: What caused the overspending?
A: The district’s 2024–25 budget did not fully account for the end of temporary federal
COVID-relief funds that had supported recurring expenses such as salaries and special
education programs. When those grants expired, costs shifted back to the general fund. Rising
employee benefits and transportation costs also contributed to the shortfall.
Q: What steps are being taken to address these challenges?
A: The Board of Education and administration have taken concrete steps to address these
challenges. Beginning this year, we will be providing monthly fiscal reports to the Board to
ensure stronger, ongoing oversight of spending. For 2025–2026, we have also implemented
targeted cost-reduction measures to help slow the growth of expenditures. In addition, the
administration is developing a multi-year financial recovery plan to responsibly rebuild reserves
and restore the district’s fund balance over time. These efforts reflect our commitment to
stabilizing the district’s finances and preventing similar issues in the future
Q: What is the district’s financial outlook for 2025–26?
A: The 2025–26 voter-approved budget is $147.2 million, an increase of 2.87%. It includes a
3.48% property-tax increase, which is within the state tax cap. The district entered the new year
without an available unassigned fund balance, so rebuilding reserves and managing costs will
be top priorities.
Q: Will these findings affect programs or services?
A: The district remains committed to maintaining core instructional programs while taking a
careful, strategic approach to reduce spending. The goal is to protect classroom experiences
while restoring long-term financial stability
Questions About the Use of Reserves
Q: The 2024–2025 Budget Newsletter showed $4.25M in “Use of Reserves,” but the district ultimately used $16.2M. How did we go from $4.25M to $16.2M?
A: The $4.25 million shown in the Budget Newsletter was a budget projection included in the
voter-approved budget. Budget estimates for several expenditure categories were not sufficient
to cover actual 2024-2025 spending due to a combination of ineffective budgeting practices. In
particular unexpected increases in instructional, special education, transportation, and benefit
costs, combined with the expiration of federal COVID-relief funds — caused actual spending to
exceed the budget.
To meet required expenses, the district had to draw additional funds from its reserves and fund
balance. Part of the $16.2 million also reflects the Board- and voter-approved use of capital
reserves to cover mandated capital and operational expenditures.
In short, $4.25 million was budgeted, while $16.2 million reflects the actual year-end impact,
including overspending and approved reserve uses.
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 minimize a disruption to 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.