[read complete report - pdf]

Audit Objective

Determine whether the Board and District officials adopted realistic budgets.

Key Findings

• Appropriations were overestimated resulting in an operating surplus of $6.2 million in 2016-17.
• District officials made excessive year-end budget transfers in 2016-17 and 2017-18 without Board Approval.
• The District had unrestricted funds totaling $10.6 million and $12 million at the end of 2016-17 and 2017-18, respectively, which exceeded the statutory limits of $3.9 million and $4 million.

Key Recommendations

• Adopt budgets with reasonable revenue and appropriation estimates based on historical or other known trends.
• Ensure that transfers with approvals are made to avoid overexpended line items.
• Reduce the amount of unrestricted fund balance to comply with the statutory limit. Surplus funds can be used as a financing source for funding one-time expenditures, funding needed reserves, paying off debt and reducing District property taxes.

District officials generally agreed with our recommendations and indicated they planned to initiate corrective action.