Audit Objective
Determine whether the Genesee Valley Board of Cooperative Educational Services (BOCES) Board of Education (Board) and officials properly established and used reserve funds and maintained them at reasonable levels.
Key Findings
While the Board and BOCES officials properly established reserve funds, they did not transparently fund the reserves or use or maintain reserve funds at reasonable levels. The Board and officials:
- Unnecessarily restricted funds that could have been refunded to school districts.
- Overfunded two reserves totaling $1.9 million, and officials could not demonstrate the balances in the four remaining reserves, totaling approximately $800,000, were needed or reasonable.
- Did not adopt a written reserve fund policy. Adopting a reserve policy provides transparency and defines the purpose for each reserve, optimal funding levels, and conditions under which the funds will be used and replenished.
BOCES’ reserve funding and use practices withholds funds from school districts that may have been used in a more beneficial way for respective taxpayers.
Key Recommendations
- Adopt a comprehensive written reserve fund policy.
- Review all reserve balances to determine whether the amounts reserved are necessary and reasonable.
BOCES officials agreed with our recommendations and indicated they have initiated or plan to initiate corrective action. Appendix B includes our comments on certain issues in BOCES’ response.