New York State’s (NYS) Office of State Comptroller (OSC) developed a Fiscal Stress Monitoring System to objectively identify issues with local government financial operations. There are four key drivers that are used in calculating a School Districts score – Year-End Fund Balance, Operating Deficits/Surpluses, Cash Position and Reliance on Short-Term Cash-Flow Debt. Each calculation is linked to a point-based scoring system that determines their fiscal stress category: No Designation (0-24.9 - best), Susceptible (25-44.9), Moderate (45-64.9) and Significant (65-100 – worst). 

This year, the Fishers Island School District received a score of 38.3, a Susceptible category. The previous two years, the district received a score of 20, a No Designation category. The following key drivers were responsible for this year’s increase: 

  1. Year-End Fund Balance: Unusual circumstances required using Restricted funds from the Employee Benefits ($45k) and Repair ($115k) accounts. To determine the Gross Expenditure amount for the fiscal stress calculation, restricted funds must be added to the district’s overall expenditures. Use of restricted funds adversely affect the district’s Unassigned Fund Balance and Gross Expenditures resulting in a fiscal stress score of 8.33 points.
  2. Operating Deficits: Restricted funds used must be added to the district’s overall expenditures, which cause Gross Expenditures to exceed Gross Revenues resulting in a fiscal stress score of 6.67 points.
  3. Reliance on Short-term Cash-Flow Debt: A short-term TAN loan was required to bridge the gap until funds were received from Southold resulting in a fiscal stress of 10.00 points.

Due to these unusual circumstances, we understand that the OSC has designated the Fishers Island School District as Susceptible the lowest level of Fiscal Stress. After speaking with the OSC, we agreed that some of the calculations used in determining fiscal stress points can affect smaller districts differently than larger districts. We thank the OSC for their latest review and look forward to working together to implement best practices to help improve and maintain the district’s sound financial conditions.