BY JEFF CHUDZINSKI
North Country This Week

MASSENA – The school district fared well during a recently completed independent audit conducted by Carl Seyfarth.

During the board of education meeting held Oct. 21, officials and Seyfarth announced the findings of the report to the public.

All documentation and financial statements presented to the auditors were provided from the district’s documentation.

One major finding was the district’s substantial deficit, due in large part to the number of retirees who are receiving health benefits.

“You’ve got a very large deficit, it’s $171 million. And most of that is from your other post employment benefits, which are the future health insurance benefits that you’re going to pay. You’ll hire an actuary to come in and look at those things and they come up with an estimate for what that liability should be,” Seyfarth said.

Though the deficit is substantial, the future health insurance benefits are not unexpected.

“You’ve got layers and layers of retirees sometimes. People are living to, some retirees are out there living to 100 years old. So you’ve had a couple other people filling that job position. So it gets rather large,” he said.

Future health insurance benefits and the expense come from an estimate of liability. The only way to affect the liability is through future contract negotiations, Seyfarth said.

With the layers of employees and retirees, it can sometimes be hard to even fathom the expense, he said.

During the course of his presentation, Seyfarth also noted that fraud can be difficult to detect, though he did not say he suspected any documentation to be fraudulent. In many cases, collusion makes it nearly impossible to find, he said.

A single audit, or an audit within an audit, was also conducted on two federal grants the district received.

Large grants must be audited every three years, according to Seyfarth.

A grant provided for food service had hit the three year mark, requiring a standard audit.

The grant passed the audit without issue.

A second grant, the Education Stabilization grant recently received, required a single audit due to being deemed high risk, according to Seyfarth.

Like the food service grant, there were no issues reported with single line items or internal controls, he said.

Few corrections were necessary, all of which were not material to the financials of the district, Seyfarth concluded.

Independent audits of district finances occur on a regular basis, with yearly reviews being conducted.