Audit Results Will Likely Have Impact on Sag Harbor School Budget

Dr. Philip Kenter, the school business administrator, gives a budget presentation. Christine Sampson photo

An auditor’s 2018 report calling for the Sag Harbor School District to ramp up oversight in its business department will likely have an impact on the district’s bottom line.

The audit, by the firm Cullen and Danowski, found the district needed to “segregate duties,” meaning divide certain responsibilities, among a greater number of employees in the areas of health insurance, personnel and payroll.

In response, the district told the New York State Education Department it would hire a new internal auditing firm and fill an existing but vacant business office staff position. Those steps are among several outlined in the district’s “corrective action plan,” which was approved by the state on December 27.

During the first workshop of the 2019-2020 school budget cycle on Monday, business administrator Dr. Philip Kenter told the board that hiring an internal auditing firm would likely cost about $35,000, depending on the responses after the district solicits proposals from auditing firms. He also proposed increasing the annual salary of the open business office job from $40,000 to $65,000 to attract better candidates for the position. He also proposed increasing the salary of an existing claims auditor position by $10,000.

“We either need her to do more analysis with payroll or I need the board to bring in another auditor for payroll or human resources,” Dr. Kenter said.

In addition, Cullen and Danowski is raising its rate by about $1,000, and the district is anticipating a $2,000 increase in other accounting and financial reporting expenses.

Dr. Kenter said the bulk of those expenses are related to the district’s corrective action plan — particularly the addition of the internal auditing firm.

He said going into the 2019-2020 school year, “We’re going to have every one of those issues addressed.”

Those proposed changes in auditing and business department expenses contribute to an overall 8.1-percent increase in spending in that department for the 2019-2020 school year, up to $501,932.

Also during the budget presentation, Dr. Kenter said legal expenses may increase by as much as 6.5 percent, up to $252,000. Budget lines for the “public information” and “board of education” areas of the budget are flat, and the central administration budget may increase by about 1.9 percent, largely due to a possible salary increase for the superintendent, which would have to be approved by the school board.

According to its budget calendar, the next workshop will be January 28 at 6:30 p.m. and will cover capital projects, technology, insurance and the district’s buildings and grounds.

Note: This article has been updated to say the superintendent’s salary increase is not a definite increase in school spending at this time.