Purpose of Audit

The purpose of our audit was to review the District’s financial management and budgeting practices for the period July 1, 2012 through June 7, 2016.

Background

The Olean City School District is located in the City of Olean and the Towns of Olean and Portville in Cattaraugus County. The District, which operates four schools with approximately 2,200 students, is governed by an elected nine-member Board of Education. Budgeted appropriations for the 2015-16 fiscal year totaled approximately $38.9 million.

Key Findings

• Appropriated fund balance was not needed in the annual budgets for the past three years because District officials overestimated appropriations each year by an average of $2.3 million.
• With unused appropriated fund balance added back, unrestricted fund balance exceeded the statutory limit of 4 percent by approximately $1.1 million each year.
• The reserve plan not formally approved by the Board, did not include the Board’s financial objectives and optimal funding levels for each reserve and did not define specific circumstances under which the reserves would be used or replenished.

Key Recommendations

• Ensure that budgets include realistic estimates of appropriations based on actual needs to avoid levying more taxes than needed.
• Maintain unrestricted fund balance within the statutory limit.
• Develop and formally adopt a comprehensive written policy or plan for establishing, funding and using reserve funds.