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Audit Objective

Determine whether the Board and District officials effectively managed fund balance and reserves.

Key Findings

• The Board’s budgeting practices included annually appropriating fund balance that was not used to finance operations and overestimating appropriations by $4.8 million (8 percent annual average) over a three-year period.
• As of June 30, 2017, unrestricted fund balance totaled more than $2.2 million and was 10 percent of the 2017- 18 budgeted appropriations, exceeding the statutory limit by approximately $1.3 million or 6 percentage points.
• Reserve funds are generally not being used¹ and the retirement, repair and unemployment reserves are overfunded.

Key Recommendations

• Adopt budgets that include reasonable estimates for appropriations and the amount of fund balance that will be used to fund operations.
• Reduce unrestricted fund balance to within the statutory limit and use the excess funds in a manner more beneficial to taxpayers.
• Review and fund reserve balances to reasonable levels in accordance with applicable statutes.

1 With the exception of the debt and capital reserves