City school bigs flunk economics

Lost 330G in invest bungle

It’s Investing 101. The city’s School Construction Authority stashed $104 million in a low-interest checking account for two years — losing out on hundreds of thousands of dollars by not investing the money elsewhere, as required by law, according to an audit released Thursday.

“By maintaining a significant amount of cash in a checking account, not only did the SCA fail to comply with the investment requirements of the Public Authorities Law, but also lost the opportunity to generate additional investment income on these funds,” said a report by Comptroller Scott Stringer.

The SCA, responsible for the design, construction and repair of the city’s public schools, kept the $104 million in a checking account during fiscal years 2016 and 2017.

The interest rate during those years was an abysmal .05 percent and .13 percent, respectively, according to a Comptroller’s Office source.

If the SCA had invested just $60 million of the $104 million in one-year treasury bills, the fund would have made at least $334,542 more, the source said.

Better yet, if $60 million had been invested in the city’s special treasury fund, the authority would have been at least $580,000 richer.

The $104 million is part of the authority’s Other Funds Account, a miscellaneous cash stash that includes money received from sources other than the city’s capital budget appropriations.

According to the audit, the Other Funds Account grew from $20 million to $133 million between 2007 and 2014. It reached $104 million on June 30, 2016.

The SCA claimed this was a special situation because it received unanticipated Superstorm Sandy funds between 2013 and 2014.

“The growth of the OFA from fiscal year 2007 through 2013 was attributable to reimbursements for projects that the SCA performed for the Port Authority and Developer Agreements,” the Authority said.

The agency said it finally got around to moving the cash to a higher-interest investment account in June 2017.