Purpose of Audit

The purpose of our audit was to evaluate the District’s reservation of fund balance for the period July 1, 2013 through September 12, 2016.

Background

The Fillmore Central School District is located in the Towns of Allen, Birdsall, Caneadea, Centerville, Granger and Hume in Allegany County and the Towns of Genesee Falls and Pike in Wyoming County. The District, which operates one school with approximately 675 students, is governed by an elected five-member Board of Education. Budgeted appropriations for the 2016-17 fiscal year total approximately $14.8 million.

Key Findings

• District officials were unable to provide evidence showing that they documented the financial need or purpose for four of the reserve funds or periodically assessed the reasonableness of reserve balances.
• No evidence was provided to show that the funds retained in the debt reserve were ever used toward debt service payments.
• The District’s 2015-16 report on reserves did not include the dates the reserves were established, amounts transferred into the reserves and interest earned, dates and amounts of withdrawals, an analysis of the projected needs for the upcoming year or a recommendation regarding those projected needs.

Key Recommendations

• Review all reserves at least annually to determine if the amounts reserved are necessary and reasonably funded and transfer excess funds to unrestricted fund balance or to other reserves.
• Use debt reserve money to pay related debt service expenditures in compliance with statutory requirements. If all associated debt has been repaid, the balance should be used to repay other debt or transferred to the general fund.
• Prepare and provide an annual report to the Board for reserves that includes all the required elements of the Board’s reserve policy.