Determine whether the Board and District officials properly used and managed fund balance and reserves.
- While the Board and District officials used $3.1 million in excess reserve funds as a financing source for a capital project, they did not do so in accordance with applicable statutes.
- Appropriations were overestimated by a total of $7 million from 2015-16 through 2018-19.
- An average of $500,000 of fund balance was appropriated each year, but was not used to finance operations. When unused appropriated fund balance is added back, surplus fund balance exceeded the limit each year by $345,000 to $611,000, or 2 to 3 percentage points.
- Adopt budgets that include reasonable estimates for appropriations and the amount of fund balance that will be used to fund operations.
- Use reserves in accordance with legal requirements.
District officials generally agreed with our findings and recommendations and indicated they have initiated or planned to initiate corrective action. Appendix B includes our comment on an issue raised in the District’s response letter.