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Audit Objective

Determine whether the Board and District officials effectively managed the District’s reserve funds.

Key Findings

• District officials have not performed an analysis of the reserves, as the District’s reserve policy requires. As a result, they could not demonstrate the need to retain approximately $2.1 million in four reserves.
• While not adopted in the Board’s meeting minutes, District officials have developed a plan to use $5.4 million from four general fund reserves for a purpose for which they were not established.

Key Recommendations

• Review reserve funds to determine whether they are necessary and reasonably funded.
• Ensure reserve funds are properly used.

District officials generally agreed with the findings and recommendations and indicated they would take corrective action. Appendix B includes our comments on issues raised in the District’s response.