Budget report shows E.B.
has extra funds for ’03-’04
By vincent todaro
Staff Writer
EAST BRUNSWICK — The Board of Education will be able to increase its fund balance, which auditors have previously said is dangerously low.
School Business Administrator Bernardo Giuliana told the board at its June 26 meeting that its fiscal care has resulted in the ability to add about $465,000 to the school district’s fund balance, or surplus account. That will bring the fund balance up to about $1.3 million, which is still considerably less than that which is recommended by the state.
Last year, school auditors told the board that a district like East Brunswick, with an annual budget of around $100 million, should have about $3 million in the fund balance. As a rule of thumb, the state recommends that a balance be equal to 3 percent of a district’s budget. The funding is important because it can be used for emergency expenses not covered in the budget.
With the fiscal year 2002-03 having just come to an end, Giuliana gave the board a rundown on its current financial position.
He said the board anticipated receiving about $410,000 in interest on its investments for the 2002-03 school year, but will see only about $208,000. The lower return is due to lower interest rates, as well as the fact that the board did not receive state aid construction funds quickly enough. As a result of the lag, the board had to use its own money to start the projects, meaning there was less money available for investment.
The board estimated it would see about $180,000 from facility use fees and tuition payments, but that number wound up being closer to $236,000, he said.
As for refunds, the board did not estimate how much it would get, but is receiving about $483,000, he said. That money comes by way of accounts that were consolidated.
School districts are no longer permitted to anticipate extraordinary aid from the state, so none was included in the budget, Giuliana said. However, the district received about $245,000 in that aid, which can now be applied.
All told, the board has $572,000 more than was anticipated when it adopted last year’s budget, he said.
"The bottom line is we’ve had a favorable outcome," he said.
The district also had about $2.5 million left to pay its fiscal year-end expenses, he said.
"These funds must be applied to purchases we’re finalizing," Giuliana said.
He credited the budget freeze instituted in 2002 on both essential and non-essential items for instruction and support services as the reason the district is ahead of the game. The freeze came about because the board anticipated upcoming issues and expenses.
As part of that freeze, the district curtailed the use of overtime and class coverage costs, Giuliana said.
On the expense side, the school district has $2.7 million worth of costs that came in addition to what was estimated in the budget, he said. The largest part of that is health benefits, which will cause the district to spend about $2.1 million more than was projected, he said.
Custodial costs also came in higher than projected due to the fact that custodians were needed to help with snow removal. The item accounts for about $275,000 in additional costs.
Special education costs account for another $200,000, Giuliana said, because of additional costs for nurses and home instruction.
Notwithstanding additional costs the district will see as it closes its accounts on 2002-03, the board has $465,000 leftover for next year’s fund balance, he said.

