South Country Central School District says it exceeded 2024-25 budget by $3.49M

The South Country Central School District on Wednesday acknowledged spending $3.49 million more than was budgeted in last school year's fiscal plan.

Treasurer's reports submitted to the school board two to three months late are among the culprits that lead to the board having to cover "unanticipated expenses," said John Belmonte, the district’s newly appointed acting assistant superintendent for finance and management services, at a board meeting.

The monthly reports were given to the board "on repeated occasions" with negative balances that should have been covered "beforehand" through balance transfers, trustee Cheryl Felice said.

"The signs were there" on May 21, when the board finally received a March report, Felice said. 

"But it was already after the voters approved the budget for the next school year," she added. "And by then it was too late.”

Last school year, the delays and negative balances resulted in unexpected expenses, including transportation and special education costs, Belmonte said.

"Those are some of the challenges that lead to the overspending," he added. "Suffice to say, maybe the approach and the management of those situations should have happened earlier in the school year so they could have been addressed. I'm saying that because you can't sugarcoat that. What should have been done is now being put in place."

Belmonte said he did not believe "that there was any fraud or there was any theft." The overspending was due to business matters, he said, "that may not have been handled in a timely fashion."

At the start of last school year, Belmonte said, the district had about $31 million in its fund balance and reserves. The district withdrew more than half "to cover our programs, instructional and support programs," he said.

"The good news is that the district still has money in reserves, to the tune of $15.3 million," the acting assistant superintendent said. "The problem is, you cannot continue on this particular strategy. You need to closely align your revenues and expenses. We cannot withstand another year as this, removing so much from fund balance and reserves. That's going to entail a very enhanced management of the district budget and things that have to be put in place to control expenses and to manage things very closely."

Going forward, Belmonte said the district must issue financial and treasurer's reports to the school board "in a timely fashion" and "immediately" process budget transfers to cover any negative balances.

"If you're monitoring your budget, and you're doing it appropriately, you eliminate the element of surprise," he added.

South Country officials announced last month that the district had "incurred expenses over budget for the 2024-2025 school year," according to a previous Newsday story, but could not provide an exact amount, citing a pending audit from external auditors.

On Oct. 8, the district hired Manhattan-based Investigative Management Group for forensic financial auditing and investigation services. The district estimated the firm’s services would cost between $15,000 and $20,000.

The following day, the district appointed Belmonte, of Belfor Long Island, as the district’s acting assistant superintendent for finance and management services. He replaced Jennifer Segui, who resigned the same day as Belmonte's appointment, but will stay on until the end of the month.

Segui could not be reached for comment Thursday.

Belmonte, who has more than three decades of experience as a business official in public education, will be paid on a per-diem rate of $1,200 per full workday, officials said. Belmonte said he is collaborating with auditors.

"We're hopeful that very shortly we'll have a preliminary report to the board or an interim report to the board as to their activities," he said at the meeting. "This is something that we're going to stay on top of." 

The district was in financial peril last spring when officials proposed cutting dozens of positions, including teachers, librarians and other support staff, to help shore up a $3 million budget hole for this school year.

Voters approved a $147 million spending plan that included a 3.48% tax levy increase, which was equal to the tax cap.

At the time, officials said declining enrollment and rising costs were main factors driving the shortfall.

An online open letter calling for New York State Comptroller Thomas DiNapoli's Office to open an independent investigation into the district’s finances contained the names of 161 members of the school community as of Wednesday evening.

Newsday's Maura McDermott contributed to this story.