Determine whether the Board and District officials properly managed fund balance.
- The Board overestimated appropriations by a total of $2.3 million from 2015-16 through 2017-18 and annually appropriated an average of $495,000 of fund balance that was not used to finance operations.
- As of June 30, 2018, surplus fund balance totaled $1.7 million and was 12 percent of 2018-19 appropriations, exceeding the statutory limit by approximately $1.2 million or 8 percentage points.
- The Board has not adopted a comprehensive written fund balance policy.
- 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 fund balance policy.
District officials generally agreed with our recommendations and indicated that they have initiated or planned to initiate corrective action. Appendix B includes our comment on an issue raised in the District’s response.