ALBANY - Auditors for the state Comptroller’s Office conducted an internal audit of financial matters in the Kiryas Joel Union Free School District and found the district’s board president and vice president also are officers of the board of directors of a not-for-profit corporation that entered into a lease agreement with the district for a school building.

The auditors said that while district taxpayers approved the lease alternative and the payments are based on an independent appraisal of the fair rental value, if the district continues to make payments over the 30-year lease period, district taxpayers will be burdened with rent payments totaling approximately $38 million, assuming a three percent annual inflation rate, and would not own the building at the end of the lease period.

If the district had obtained voter approval and financed the construction with serial bonds at an annual interest of six percent, the total cost of the building to district taxpayers would have been approximately $35 million – resulting in a savings of about $3 million over 30 years – and the district would own the building, the state officials said.