Milford Central School District – Fund Balance Management (2022M-94)

Background

The District serves the Towns of Hartwick, Laurens, Maryland, Middlefield, Milford and Westford in Otsego County.

The District is governed by a seven-member elected Board that is responsible for the general management and control of the District’s financial and educational affairs.

The Superintendent of Schools (Superintendent) is the chief executive officer and is responsible, along with other administrative staff, for the District’s day-to-day management under the Board’s direction. There was an interim Superintendent from July 2021 through June 2022.

The School Business Manager runs the District’s day-to-day financial operations and provides financial reports to the Board.

Audit Period

July 1, 2018 – May 18, 2022

We extended the audit period to review the District’s operating results as of June 30, 2022.

Issued Date
August 26, 2022

[read complete report - pdf]

Audit Objective

Determine whether the Milford Central School District (District) Board of Education (Board) and District officials properly managed fund balance in accordance with statute.

Key Findings

The Board and District officials did not properly manage fund balance in accordance with statute.

  • As of June 30, 2021, surplus fund balance exceeded the 4 percent statutory limit by approximately $600,000, or 5.4 percentage points. When the projected unused appropriated fund balance of $720,000 is added back, the recalculated surplus fund balance exceeded the statutory limit by $1.3 million, or 11.9 percentage points.
  • The Board and District officials did not develop and adopt a written multiyear financial plan or fund balance policy.

Key Recommendations

  • Reduce surplus fund balance to comply with the statutory limit and use the excess funds in a manner beneficial to taxpayers.
  • Develop and adopt a comprehensive written multiyear financial plan and fund balance policy.

District officials generally agreed with our recommendations and plan to initiate corrective action.