[read complete report - pdf]

Audit Objective

Determine whether the Board appropriately managed the District’s fund balance.

Key Findings

• Surplus fund balance levels exceeded the statutory limit by at least 5.4 percentage points from fiscal years 2015-16 through 2018-19.
• Annual budgets overestimated appropriations by an average of $685,822 (6 percent) from 2015-16 through 2018-19. As a result, $1.7 million in appropriated fund balance was not used to fund operations during this time.
• The unemployment insurance reserve was overfunded and the employee benefit accrued liability reserve was not established by Board resolution.
• District officials have not appropriately prepared or implemented corrective action plans (CAPs) to previous audits.

Key Recommendations

• Reduce surplus fund balance to comply with the statutory limit and District policy.
• Adopt budgets that include reasonable estimates for appropriations. Discontinue appropriating fund balance that is not needed or used to fund operations.
• Review the unemployment insurance reserve and determine whether the balance is necessary and reasonable. Adopt a resolution that establishes the employee benefit accrued liability reserve.
• Create CAPs in response to external audit reports that indicate who will implement the recommendations and identify when each is expected to be implemented by.

¹ The Business Leader position is again vacant as of November 8, 2019.