New York State's Comptroller reports 31 school districts designated as being in "fiscal stress"

On January 22, 2026, New York State Comptroller Thomas P. DiNapoli’s Fiscal Stress Monitoring System reported that tirty-one school districts were designated in some level of fiscal stress under the New York State Comptroller's Fiscal Stress Monitoring System for the school fiscal year (SY) ending June 30, 2025, up from 22 districts in fiscal stress so designated in the previous school fiscal year.

“In recent years, pandemic-related federal funding as well as increases in state aid have provided districts with significant financial support,” DiNapoli said. “With much of the relief funding having been spent, the number of school districts in fiscal stress has returned to pre-pandemic levels this year. As districts continue to adjust to these conditions, officials should make every effort to ensure budgets are structurally balanced to avoid fiscal problems going forward.”

From SY 2019-20 to 2024-25, school districts spent $4 billion of the nearly $4.6 billion in available federal pandemic relief funding. With this funding dwindling, in SY 2024-25, districts reported spending only $317 million in combined federal pandemic relief funding, a decrease of over 70% from SY 2023-24.

Of the 669 school districts that filed their financial reports in time to be scored in SY 2025, 4.6% have been designated as being in a level of fiscal stress, compared to 3.3% in SY 2024.

DiNapoli’s Fiscal Stress Monitoring System was designed to identify school districts, counties, cities, towns and villages that are having difficulties with budgetary solvency, or the ability to generate enough revenue to meet expenses. School districts receive a fiscal stress score that is based on several factors: year-end fund balance, operating deficits, cash position, and reliance on short-term debt for cashflow. The higher the score, the more severe the level of stress.

This release of scores, which excludes New York City and the “Big Four” City School Districts of Buffalo, Rochester, Syracuse and Yonkers, designated two school districts in “significant fiscal stress,” the highest category – Harrisville Central School District in Lewis County and Mount Vernon School District in Westchester County. Four districts were designated as being in “moderate fiscal stress” and 25 districts were designated as “susceptible to fiscal stress.”

Regionally, the Mohawk Valley had the highest percentage of school districts with a stress designation (10.9%), followed by Central New York (10.4%) and the North County (7%).

In addition, DiNapoli’s report identified 24 chronically stressed school districts which have been designated in a category of stress for five or more years since SY 2012-13, although they may not currently be designated in a level of stress.

DiNapoli urges district officials to take advantage of the resources available to them to monitor factors affecting fiscal stress. These include the Comptroller’s self-assessment tool and financial toolkit, which offer guidance, resources, training and reports, to help officials manage through complex fiscal circumstances.

Lists
School Districts in Stress for Fiscal Year Ending 2025
Complete List of School District Fiscal Stress Scores

Report
Fiscal Stress Monitoring System: School Districts Fiscal Year 2024-25 Results

Judicial review of a determination made by an administrative agency without the agency holding a quasi-judicial hearing is limited

In reviewing a determination of an administrative agency not made after a quasi-judicial hearing, the Appellate Division noted that the reviewing court's inquiry is limited to determining whether the administrative decision:

1. Is arbitrary and capricious; 

2. Without a rational basis in the record; and 

3. Has a reasonable basis in law.

The Appellate Division observed that "An agency's interpretation of the statutes and regulations that it administers is entitled to deference, and must be upheld if reasonable".

Further, the court opined that "The agency's determination need only be supported by a rational basis", noting that "An administrative determination is arbitrary and capricious when it exceeds the agency's statutory authority or is made in violation of the Constitution or laws of this State".

In the words of the Appellate Division: "If the agency's determination is rationally based, a reviewing court may not substitute its judgment for that of the agency even if the court might have decided the matter differently" as it is not "for a reviewing court to weigh the evidence or reject the choice made by the agency where the evidence conflicts and room for choice exists ."

Click HERE access the Appellate Division's decision posted on the Internet.

2026 Paid Family Leave webinar series for employers and HR professionals

The New York State Workers’ Compensation Board is hosting a Paid Family Leave (PFL) webinar specifically for "employers and HR professionals" to share What’s New for 2026", including:

• the higher maximum weekly benefit amount, and
• the updated employee contribution rate.

Each one-hour, online session, will also provide an overview of New York State’s landmark PFL benefits, including:

• who is eligible,
• how employees take it, and
• employers’ role in the process.

The sessions are free and there will be time at the end for questions. Each session covers the same content, and interested individuals are invited to choose the date that works best for them. 

PFL for employers and HR professionals are schedule to be held on:

 

Thursday, January 29, 2026 12:00 p.m. - 1:00 p.m.

Register here 

Wednesday, March 18, 2026 12:00 p.m. - 1:00 p.m.

Register here 

A party's request that the administrative tribunal reconsider its decision does not extend the statute of limits to appeal the administrative decision

In this appeal to the Commissioner of Education the Respondent [School District] contended that the appeal must be dismissed as untimely, among other reasons. 

The Commissioner agreed, explaining that an appeal to the Commissioner of Education must be commenced within 30 days from the administrative decision or act complained of, "unless any delay is excused by the Commissioner for good cause shown" and it is the actual knowledge of the facts underlying a claim that begins the running of the 30-day period in which the aggrieved party may bring the proceeding.

In this instance the Commissioner noted that the Petitioners had received actual notice of the School District's decision on June 27, 2025 but did not commence their appeal until August 25, 2025, more than 30 days after had knowledge of the School District's ruling.  

Although Petitioners had requested the School District reconsider its decision, the Commissioner noted that such a request does not extend the time limits within which a petitioner may file an appeal to the Commissioner.

As Petitioners did not offer any explanation for the delay in their submitting their appeal to the Commissioner, the Commissioner held that Petitioner's appeal must be dismissed as untimely.

Click HERE to access the Commissioner's decision posted on the Internet.

New York State local government and school audits posted on the Internet on January 20, 2026

On January 20, 2026, New York State Comptroller Thomas P. DiNapoli announced that a number of local government and school audits and certain follow-up reports were posted on the Internet.

Click of the text in color to access the audits and follow-up reports

Mattituck Fire District – Claims Audit (Suffolk County) The board did not ensure that all nonpayroll disbursements were appropriate, adequately supported, audited and approved before claims were paid. Auditors determined that the board did not always perform a thorough and deliberate audit of claims before approving payments, and the treasurer paid claims that were never audited by the board. Auditors reviewed 135 claims totaling $194,478 and determined that the board should not have approved 90 claims totaling $125,562.The board did not ensure that all nonpayroll disbursements were appropriate, adequately supported, audited and approved before claims were paid. Auditors determined that the board did not always perform a thorough and deliberate audit of claims before approving payments, and the treasurer paid claims that were never audited by the board. Auditors reviewed 135 claims totaling $194,478 and determined that the board should not have approved 90 claims totaling $125,562.

Town of Horseheads – Claims Auditing (Chemung County) The board did not conduct a thorough audit of claims to ensure that individual claims contained supporting documentation to demonstrate compliance with statutory requirements and town policies. Auditors reviewed 274 claims totaling $897,321 and 206 claim payments totaling $414,075 and determined that 61 claims totaling $473,309 were paid prior to the board’s audit.

North Creek Fire District – Board Oversight (Warren County) The board did not provide adequate oversight of district financial activities related to budgeting, monthly financial reporting, bank reconciliations, annual financial reporting, annual audits and policy reviews. The board did not develop and adopt realistic budgets taking into consideration multiyear financial planning or ensure that the treasurer provided sufficient financial reports. The board also did not conduct an annual audit to provide oversight and ensure accuracy of records or ensure the treasurer filed required annual reports and failed to periodically review required policies including the district’s code of ethics, purchasing and investment policies.

Center Moriches Fire District – Fiscal Transparency (Suffolk County) The board did not obtain annual audits in a timely manner or ensure the treasurer filed all annual financial reports (AFRs) with the State Comptroller’s office. Additionally, district officials had no record of the board ever using an RFP process to contract the CPA firm’s services for the annual audit or an engagement letter with the CPA firm detailing the services to be provided. As of Nov. 15, 2025, the treasurer has not filed the 2020 through 2024 fiscal year AFRs and the last filed AFR, for fiscal year 2019, was filed 122 days late.

Steuben County – Financial Management County officials did not effectively manage the county’s fund balance. As a result, as of Dec. 31, 2024, the county maintained unrestricted fund balance in the general fund totaling $103.4 million (48% of the upcoming year’s budget) and in the road fund totaling $15.5 million (53% of the upcoming year’s budget). The legislature did not adopt an adequate fund balance policy or develop a comprehensive, written multiyear financial or capital plan. After initial audit discussions with county officials, the legislature updated its administrative code to add a maximum general fund balance goal to its fund balance policy and adopt a reserve fund policy. The legislature also created and funded new reserves in July 2025 to significantly reduce its unrestricted fund balance.

Colesville-Windsor Fire District – Board Oversight (Broome County) The board did not provide adequate financial oversight. Specifically, the board did not review periodic financial reports to assess the district’s operations or conduct an annual audit of the secretary-treasurer’s records to verify that they properly recorded collections and disbursements and maintained current and accurate records and reports.

Cincinnatus Fire District – Board Oversight (Cortland County)  The board did not always properly safeguard assets. Although the board received sufficient monthly financial reports, monitored financial  operations throughout the year and ensured that annual financial reports were filed in a timely manner, the board did not ensure that district assets were properly accounted for and safeguarded, including 19 assets totaling $33,009 that were not onsite. These assets included items such as computers, cameras and night vision goggles. Also, one board member did not complete the required fiscal oversight training within 270 days of taking office which, as of March 11, 2025, was 165 days past the deadline.

Ashville Fire District – Procurement and Board Oversight (Chautauqua County) The board did not demonstrate that the purchase of equipment was done in accordance with state law, as well as provide proper oversight of equipment purchases. In addition, the board should have periodically reviewed and updated the district’s purchasing policy, but the board has not updated the policy since 2014. As a result, the board could have been more fiscally responsible by increasing competition and avoiding vendor overpayments that would have totaled $6,500 by ensuring vendor invoices agreed with contract terms. The board also could not demonstrate that it complied with competitive bidding requirements when purchasing two fire trucks, totaling $796,200, as required by law.

Morristown Fire District – Board Oversight (St. Lawrence County) The board did not provide adequate oversight of district financial operations, and it did not always conduct a proper audit of claims prior to payment. Furthermore, the board did not ensure the secretary-treasurer filed required annual financial reports. The board also did not ensure the secretary-treasurer deposited district collections in a timely manner, performed monthly bank reconciliations and maintained accurate financial records and reports, or conducted an annual audit of the secretary-treasurer’s records. In addition, the board did not develop and adopt a procurement policy or investment policy or ensure claims were properly supported and audited and approved prior to payment.

Rotterdam Fire District Number 7 Schonowe – Claims Auditing (Schenectady County) The board did not conduct a thorough and deliberate audit of all claims paid during the audit period. Auditors reviewed 79 claims totaling $941,015 and determined that none of the claims were audited and approved by the entire board, as required. In addition, the lack of a claims audit increased the risk that claims for improper purposes could be paid.

Follow Up Reports

Chenango Valley Central School District – Audit Follow-Up (Broome County) This review assessed the Chenango Valley Central School District’s progress in implementing recommendations in Chenango Valley Central School District – Network User Accounts and Information Technology Contingency Planning, released in June 2023. The audit determined that district officials did not adequately manage network user accounts or develop and adopt an information technology (IT) contingency plan. To help district officials improve managing network user accounts and assist in adopting an IT contingency plan, the audit included a public report that contained three recommendations. The district’s IT Director, board and officials fully implemented one recommendation and partially implemented two recommendations.

City of Fulton – Audit Follow-Up (Oswego County) This review was to assess the City of Fulton’s progress in implementing recommendations in City of Fulton – Capital Projects, released in February 2022. The audit determined that city officials did not appropriately maintain capital projects fund records, monitor project financial results against budgets and close out records for completed projects. The audit included 12 recommendations to help officials improve their controls over capital projects. The city has made minimal progress implementing corrective action. Of the 12 audit recommendations, one recommendation was fully implemented, two recommendations were partially implemented, and eight recommendations were not implemented. Auditors could not determine the implementation status for the remaining recommendation because certain capital projects records were unavailable or inadequate. 

Gates Fire District – Audit Follow-Up (Monroe County) This review was to assess the Gates Fire District’s progress in implementing recommendations in Gates Fire District – Board Oversight of Long-Term Planning, released in June 2024. The audit determined that the board and district officials did not properly plan for the district’s long-term financial and capital needs, which inhibited the board and officials from effectively managing finances and addressing future operating and capital needs. The audit included eight recommendations to help officials effectively manage finances and address future operating and capital needs. The district has implemented corrective action for all eight audit recommendations.

City of Mount Vernon – Audit Follow-Up (Westchester County)  This review was to assess the City of Mount Vernon’s progress, as of July/August 2025, in implementing recommendations in City of Mount Vernon – Financial Reporting and Oversight, released in September 2020. The audit determined that the city council and officials did not have adequate financial information for the effective management of operations and, as a result, the city lost its credit rating. The audit included 11 recommendations to help the board improve its oversight of the district’s financial activities. The city has implemented three recommendations, partially implemented four recommendations and not implemented four recommendations.

Monsey Fire District – Audit Follow-Up (Rockland County) The purpose of the review was to assess the Monsey Fire District’s progress in implementing recommendations in Monsey Fire District – Board Oversight released in July 2020. The audit determined that district officials did not provide adequate oversight to ensure district financial records and reports were prepared, filed and/or audited. The audit report contained three recommendations to help officials improve their controls over financial records and reports. The board implemented one recommendation, partially implemented one recommendation and did not implement one recommendation.

Montauk Fire District – Audit Follow-Up (Suffolk County)  The purpose of the review was to assess the Montauk Fire District’s progress in implementing  recommendations in Montauk Fire District – Board Oversight, released in December 2024. The audit determined that the board did not adequately monitor financial activities or ensure that appropriate records and reports were maintained and audited to comply with statutory requirements. To help the board monitor financial activities and ensure appropriate records and reports were maintained or audited to comply with statutory requirements, the audit contained four recommendations. The district has partially implemented all four recommendations.

Ridge Fire District – Audit Follow-Up (Suffolk County) This review was to assess the Ridge Fire District’s progress in implementing recommendations in Ridge Fire District – Board Oversight of Treasurer’s Fiscal Duties, released in January 2022. The audit determined that district officials did not provide adequate oversight of the treasurer’s fiscal duties and could not explain why the bank balances presented on the treasurer’s reports for three consecutive months contained discrepancies totaling $2.96 million. The audit included three recommendations to help officials monitor and improve the district’s financial operations. The board partially implemented one recommendation and did not implement two recommendations.

Ticonderoga Joint Town/Village Fire District – Audit Follow-Up (Essex County) The purpose of the review was to assess the Ticonderoga Joint Town/Village Fire District’s progress in implementing recommendations in Ticonderoga Joint Town/Village Fire District – Board Oversight, released in April 2024. The audit determined that the board did not ensure required annual audits were completed and annual update documents were filed in a timely manner. To help the board improve its controls over monitored financial activity and ensure appropriate records and reports were maintained and filed in a timely manner, the audit report contained two recommendations. The district has partially implemented the audit’s two recommendations.

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