Riverhead school district’s finances boosted by COVID funding, audit shows
Riverhead Central School District’s finances were on solid ground for the 2021-2022 fiscal year, according to the district’s annual external audit.
Jill Sanders, partner at the public accounting firm Cullen & Danowski, presented the results of the audit just before assistant superintendent for finance and operations, Rodney Asse, began the first of three presentations on the proposed 2023-2024 budget.
Total expenses for the district’s fiscal year, which ran from July 1, 2021 through June 30, 2022, stood at $162,118,313 against total revenues of $177,265,185. The district’s bottom line was strengthened by state aid, operating grant increases and payments in lieu of taxes. Revenues from New York State funding increased 46%, to $48,209,555 from the prior year’s $33,074,274, according to the audit.
Allocated under the Coronavirus Response and Relief Supplemental Appropriations Act, the district received more than $6 million in funding, plus another $12.8 million from the American Rescue Plan.
The district allocated over $3.8 million to reserves and appropriated less than $4.2 million for expenses during the fiscal year. Officials also refinanced around $22 million in bonds which allowed for a net gain of about $1.29 million.
The districts total net position was at a deficit of more than $52 million in June. The deficit has since decreased by approximately $15 million, according to the report. Net position calculates decreased values of capital assets due to depreciation alongside increases in staffing costs and post-employment healthcare benefits.
The auditors also wrote a letter to the district, commenting on its internal controls. Although no “significant deficiencies,” were found, the firm proposed “a significant number of audit adjustments to correct misstatements.”
According to the letter, “management has accepted and recorded these audit adjustments.”
“We note that the individual responsible for this function had separated from the District, prior to the timing of when this process takes place, and the district outsourced these duties to a third party,” the letter states.
The letter was referring to administrative changes within the business department last year. In October 2021, the board placed then-deputy superintendent Sam Schneider on administrative leave after an unspecified allegation was raised to superintendent Augustine Tornatore.
In October 2021, the board had placed Mr. Schneider on administrative leave after an unspecified allegation was raised to superintendent Augustine Tornatore. An audit of the previous five years found no evidence of “fraud, embezzlement of malfeasance,” but determined that Mr. Schneider carried “too many responsibilities.” The district entered into a settlement agreement with him and agreed to pay full his compensation through the end of his contract on June 30, 2022 and he agreed to resign. Mr. Schneider was hired by East Hampton Union Free School District in March 2022.
In May 2022, the board hired Mr. Asse as the district’s new business official. He noted in an email to the Riverhead News Review that the remaining balance in the General Fund from the 2021-2022 school year is $5.9 million.
According to Mr. Asse, 81% of district funds are spent on instruction and academic programs, 9% goes to administrative support for the schools, 7% for pupil transportation, 1% on food service and another 1% on servicing the district’s debt.