Canastota Central School District - Financial Condition Management (2019M-174)

Issued Date
November 08, 2019

[read complete report - pdf]

Audit Objective

Determine whether the District officials effectively managed the District’s financial condition.

Key Findings

District officials could improve their management of the District’s financial condition. We found:

  • Officials overestimated appropriations by a total of $7.1 million from 2015-16 through 2017-18, which resulted in most of the appropriated fund balance not being needed to fund operations.
  • The tax certiorari reserve was overfunded by $963,200 (615 percent) as of June 30, 2018.
  • Encumbrances were overstated by a combined total of $264,000 from 2015-16 through 2017-18.
  • Although surplus fund balance was reported at or below the statutory limit from 2015-16 through 2017-18, recalculated surplus fund balance exceeded the statutory limit ranging from 7.2 percent to 10.9 percent.

Key Recommendations

  • Adopt annual budgets that contain realistic estimates and develop a plan to reduce the amount of surplus fund balance.
  • Account for and report year-end encumbrances that are valid and supported.
  • Return excess funds in the tax certiorari reserve to the unrestricted fund balance in the general fund in accordance with the law.

District officials agreed with our recommendations and have initiated or indicated they planned to initiate corrective action.