A routine annual review of the Bridgehampton School District’s 2020-21 finances by an outside auditor was sparkling, save for a handful of small issues, one of which was the district’s accidental allocation of more scholarship money for students than it had available from donors for that purpose.
The firm Cullen and Danowski, which handles audits for numerous East End school districts, gave Bridgehampton an “unmodified opinion,” which is “the highest rating a district can get,” Mary Kelly, the district superintendent, said Tuesday. “The audit process is designed to make sure that we are in compliance with all regulatory requirements, and it also allows us the opportunity to fine-tune and improve our processes as necessary . . . and provide assurances that the district is managing its financial responsibilities in a transparent and appropriate way.”
Cullen and Danowski’s analysis showed that the scholarship account, which is funded by many individual donors and managed by the school district, has a deficit of about $1,800 because the district awarded $4,846 last year when it had only $3,038 available.
Ms. Kelly said the district will now implement an additional layer of oversight by requiring a second administrator to sign off on the scholarship awards. Asked how the negative balance will be addressed, she said, “The district has to look at how to make that whole moving forward. We’re speaking with our attorneys on how to address that.”
The audit identified a few occasions when a monthly bank balance sheet did not match up with expenditures and some instances of missing paperwork or student officer signatures on extracurricular activity spending. The audit also showed that some employees have access to the district’s accounting program despite not needing it to perform their regular duties.
Additionally, the audit showed that Bridgehampton ended the 2020-21 school year in compliance with a state law that caps the amount of surplus money — called an “unassigned fund balance” — at 4 percent of the prior year’s budget.
Bridgehampton’s adherence to the state law comes at a time when other districts in the region are holding onto balances above the 4-percent limit because of financial uncertainty brought on by the Covid-19 pandemic. In October, audits showed that East Hampton’s balance was 4.75 percent and Amagansett’s was just under 14 percent.