Determine whether the Board and District officials properly managed fund balance and reserves.
- The Board overestimated appropriations by a total of $3.5 million over three years and annually appropriated an average of $357,000 of fund balance that was not used to finance operations.
- As of June 30, 2018, surplus fund balance totaled $365,000 and was 5 percent of 2018-19 appropriations, exceeding the 4 percent statutory limit by approximately $74,000 or 1 percentage point.
- The District has not adopted a comprehensive written reserve fund policy and could not demonstrate a plan for the need for certain reserves that have not been used for three years.
- Adopt budgets that include reasonable estimates for appropriations and the amount of fund balance that will be used to fund operations.
- Reduce surplus fund balance to comply with the statutory limit and use the excess funds in a manner more beneficial to taxpayers.
- Adopt a comprehensive written reserve policy, including a plan for the use of reserves.
District officials generally agreed with our recommendations and indicated they planned to take corrective action.